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Federal-Provincial Fiscal Arrangements Act

Version of section 16 from 2005-03-10 to 2012-06-28:


Marginal note:Total equalized tax transfer

  •  (1) The total equalized tax transfer applicable to a province for a fiscal year is the aggregate of

    • (a) the total amount, as determined by the Minister, for the fiscal year represented by the federal income tax reduction in the province in respect of the Canada Health and Social Transfer for the fiscal year, and

    • (b) the amount equal to the lesser of

      • (i) the equalization payment referred to in subsection (1.1) that would be payable to the province for the fiscal year, and

      • (ii) the amount of equalization that would be paid to the province in respect of the federal income tax reduction in all the provinces in respect of the Canada Health and Social Transfer for the fiscal year, if the method of calculation of fiscal equalization payments as set out in Part I, excluding subsections 4(6) and (9) of this Act as it read on May 13, 2004, were to be applied to the value of the income tax reduction in all the provinces in respect of the Canada Health and Social Transfer for the fiscal year, except that

        • (A) for the purposes of the calculation under this subparagraph the relevant revenue bases are to be determined in the prescribed manner, and

        • (B) where subsection 4(6) or (9) of this Act as it read on May 13, 2004 applies in the determination of the fiscal equalization payment to the province for the fiscal year, the amount determined under this subparagraph is to be adjusted in the prescribed manner.

  • Marginal note:Equalization payment payable

    (1.1) For the purposes of subparagraph (1)(b)(i), for each fiscal year in the period beginning on April 1, 2001 and ending on March 31, 2004, the equalization payment shall be

    • (a) in the case of a province that receives an additional fiscal equalization payment under subsection 4(3), the estimate that was made by the Minister on February 23, 2004 in respect of the fiscal year in accordance with section 8 of the Federal-Provincial Fiscal Arrangements Regulations, 1999; and

    • (b) in the case of a province that does not receive an additional fiscal equalization payment under subsection 4(3), the final computation in respect of the fiscal year.

  • Marginal note:Amount recoverable

    (1.2) Where the cash contribution in respect of the Canada Health and Social Transfer to a province for the fiscal year beginning on April 1, 2001 that was determined in accordance with the final computation made in September 2004 exceeds the cash contribution payable to the province under this Part for that fiscal year and calculated in accordance with subsection (1.1), the Minister may recover the amount of the excess from the province from any amount payable under this Act.

  • Marginal note:Amount payable

    (1.3) Where the cash contribution in respect of the Canada Health and Social Transfer to a province for the fiscal year beginning on April 1, 2001 that was determined under this Part and calculated in accordance with subsection (1.1) exceeds the cash contribution payable to the province for that fiscal year that was determined in accordance with the final computation made in September 2004, the Minister may pay the excess amount to the province out of the Consolidated Revenue Fund at the time and in the manner that the Minister considers appropriate.

  • Marginal note:Federal income tax reduction

    (2) For the purposes of subsection (1), the amount represented by the federal income tax reduction in a province in respect of the Canada Health and Social Transfer for a fiscal year is an amount equal to the aggregate of

    • (a) seventy-five per cent of the amount, as determined by the Minister, that would be derived from a tax, computed in accordance with the Income Tax Act,

      • (i) on the incomes, other than incomes from businesses, of individuals resident in the province on the last day of the taxation year ending in the fiscal year, within the meaning of the Income Tax Act,

      • (ii) on the incomes, other than incomes from businesses, earned in the province in the taxation year ending in the fiscal year by individuals not resident in Canada at any time during the taxation year, within the meaning of the Income Tax Act, and

      • (iii) on the incomes from businesses earned in the province in the taxation year ending in the fiscal year by individuals, within the meaning of the Income Tax Act,

      equal to the product obtained by multiplying 13.5/(100-9.143) by the “tax otherwise payable under this Part”, within the meaning assigned by subsection 120(4) of the Income Tax Act, on those incomes,

    • (b) twenty-five per cent of the amount, as determined by the Minister, that would be derived from a tax, computed in accordance with the Income Tax Act,

      • (i) on the incomes, other than incomes from businesses, of individuals resident in the province on the last day of the taxation year beginning in the fiscal year, within the meaning of the Income Tax Act,

      • (ii) on the incomes, other than incomes from businesses, earned in the province in the taxation year beginning in the fiscal year by individuals not resident in Canada at any time during the taxation year, within the meaning of the Income Tax Act, and

      • (iii) on the incomes from businesses earned in the province in the taxation year beginning in the fiscal year by individuals, within the meaning of the Income Tax Act,

      equal to the product obtained by multiplying 13.5/(100-9.143) by the “tax otherwise payable under this Part”, within the meaning assigned by subsection 120(4) of the Income Tax Act, on those incomes,

    • (c) seventy-five per cent of the amount, as determined by the Minister, that would be derived from a tax, computed in accordance with the Income Tax Act, on the income earned in the province by each corporation, other than a non-resident-owned investment corporation within the meaning of that Act or a corporation named in Schedule III to the Financial Administration Act, or a wholly-owned subsidiary within the meaning of that Act of a corporation so named, that is an agent of Her Majesty in right of Canada, that maintained a permanent establishment in the province at any time during its taxation year ending in the calendar year that ends in the fiscal year, at the rate of one per cent of its taxable income earned in the province in that taxation year, and

    • (d) twenty-five per cent of the amount, as determined by the Minister, that would be derived from a tax, computed in accordance with the Income Tax Act, on the income earned in the province by each corporation, other than a non-resident-owned investment corporation within the meaning of that Act or a corporation named in Schedule III to the Financial Administration Act, or a wholly-owned subsidiary within the meaning of that Act of a corporation so named, that is an agent of Her Majesty in right of Canada, that maintained a permanent establishment in the province at any time during its taxation year ending in the calendar year that begins in the fiscal year, at the rate of one per cent of its taxable income earned in the province in that taxation year.

  • (3) and (4) [Repealed, 1995, c. 17, s. 49]

  • R.S., 1985, c. F-8, s. 16
  • 1992, c. 10, s. 6
  • 1995, c. 17, s. 49
  • 1999, c. 31, s. 238
  • 2003, c. 15, s. 6(F)
  • 2005, c. 7, s. 3
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