Federal-Provincial Fiscal Arrangements Act

Marginal note:Computation of payments

• 6 (1) Subject to subsections (8) to (10), the fiscal stabilization payment that may be paid to a province for a fiscal year is the amount determined by the formula

  (0.95 × A) – B + (C × D) – (E × F)

  where

  A

  is the non-natural resource revenue of the province for the preceding fiscal year;

  B

  is the non-natural resource revenue of the province for the fiscal year;

  C

  is equal to

  • (a) 95%, if the natural resource revenue of the province for the fiscal year is greater than the natural resource revenue of the province for the preceding fiscal year,

  • (b) 50%, if the natural resource revenue of the province for the fiscal year is less than one half of the natural resource revenue of the province for the preceding fiscal year, or

  • (c) zero, in any other case;

  D

  is the natural resource revenue of the province for the preceding fiscal year;

  E

  is equal to

  • (a) one, if the natural resource revenue of the province for the fiscal year is either greater than the natural resource revenue of the province for the preceding fiscal year or less than one half of the natural resource revenue of the province for the preceding fiscal year, or

  • (b) zero, in any other case; and

  F

  is the natural resource revenue of the province for the fiscal year.

• (1.1) [Repealed, 2010, c. 25, s. 173]

• Marginal note:Adjustment

  (2) For the purposes of determining the amount under subsection (1), the Minister may adjust, in the prescribed manner, the natural resource revenue and the non-natural resource revenue of a province for the fiscal year to offset the amount, as determined by the Minister, of any change in either of those revenues for the fiscal year resulting from changes made by the province in the rates or structure of provincial taxes or of other means of raising the revenue of the province from the rates or structures in effect in the preceding fiscal year.

• Marginal note:Interpretation

  (2.1) If a province has entered into a tax collection agreement respecting personal income tax or corporation income tax, a change to the Income Tax Act affecting the province’s Common Tax Base as defined in Chapter 2 or 3, as the case may be, of the tax collection agreement is deemed to be a change in the rates or in the structures of provincial taxes for the purposes of subsection (2).

• (2.2) [Repealed, 2010, c. 25, s. 173]

• Marginal note:Natural resource revenue

  (3) For the purposes of determining the amount under subsection (1), the natural resource revenue of a province for a fiscal year is the aggregate of the total revenue, as determined by the Minister, derived by the province for the fiscal year from the revenue sources described in paragraphs (l) to (w) of the definition revenue source in subsection 3.9(1) and from the revenue sources described in paragraph (z.5) of that definition that relate to natural resources.

• Marginal note:Non-natural resource revenue

  (4) For the purposes of determining the amount under subsection (1), the non-natural resource revenue of a province for a fiscal year is equal to

  • (a) the aggregate of

    • (i) the total revenue, as determined by the Minister, derived by the province for the fiscal year from the revenue sources described in paragraphs (a) to (k), (x), (y) and (z.1) to (z.3) of the definition revenue source in subsection 3.9(1),

    • (ii) the total revenue, as determined by the Minister, derived by the province for the fiscal year from the revenue sources described in paragraph (z.5) of that definition that do not relate to natural resources,

    • (iii) the fiscal equalization payment made to the province for the fiscal year under Part I, and

    • (iv) the additional cash payment made to the province for the fiscal year under section 24.703,

  minus

  • (b) despite subsection (5), the aggregate of

    • (i) the total equalized tax transfer applicable to the province as if, for that fiscal year, the transfer were determined in the manner described in subsection 24.7(1.22), and

    • (ii) the value of the additional tax abatement units as determined in accordance with subsection 27(2).

• Marginal note:Non-natural resource revenue

  (5) For the purposes of determining the non-natural resource revenue of a province for a fiscal year,

  • (a) subsection 3.9(2) applies, with any modifications that the circumstances require, in determining the revenue derived by the province for the fiscal year from personal income taxes, described in paragraph (a) of the definition revenue source in subsection 3.9(1), except that no deduction may be made in respect of the tax abatement units referred to in subsection 27(2);

  • (b) the province’s revenue for the fiscal year derived from personal income taxes, described in paragraph (a) of the definition revenue source in subsection 3.9(1), is deemed to be

    • (i) the total amount, determined in the prescribed manner, of the provincial personal income taxes assessed or reassessed, not later than 24 months after the end of the fiscal year, in respect of the taxation year ending in the fiscal year,

    minus

    • (ii) the total amount, determined in the prescribed manner, of the tax credits and rebates claimed by taxpayers in the province against provincial personal income taxes for that taxation year that have been deducted from those assessed or reassessed provincial personal income taxes; and

  • (c) the province’s revenue for the fiscal year derived from that part of the revenue source described in paragraph (b) of the definition revenue source in subsection 3.9(1) that consists of corporation income taxes is deemed to be

    • (i) the total amount, determined in the prescribed manner, of the provincial corporation income taxes assessed or reassessed, not later than 24 months after the end of the fiscal year, in respect of the taxation year of corporations ending in the calendar year that ends in the fiscal year,

    minus

    • (ii) the total amount, determined in the prescribed manner, of the tax credits and rebates claimed by taxpayers in the province against provincial corporation income taxes for that taxation year that have been deducted from those assessed or reassessed provincial corporation income taxes.

• Marginal note:Fiscal year 2011–2012

  (6) Despite subsection (4), for the purposes of determining the amount under subsection (1) for the fiscal year that begins on April 1, 2011, the payment under section 3.12 and the additional cash payment under section 24.703 are not included in the province’s non-natural resource revenue.

• Marginal note:Application by province for payment

  (7) A fiscal stabilization payment may be paid to a province for a fiscal year only on receipt by the Minister, not later than eighteen months after the end of the fiscal year, of an application by the province therefor containing such information as may be prescribed.

• Marginal note:Limit of $60 per capita

  (8) Subject to subsection (9), for each fiscal year that begins after March 31, 1987, the fiscal stabilization payment that may be paid to a province shall not exceed the amount obtained by multiplying $60 by the population of that province on June 1 of that year, based on the most recent information that has been prepared by Statistics Canada for that year in accordance with the regulations.

• Marginal note:Loan

  (9) If the amount of the fiscal stabilization payment of a province calculated pursuant to subsections (1) to (7) exceeds the amount calculated in respect of the province pursuant to subsection (8) any amount of the difference between those amounts may, at the discretion of the Minister, be lent to the province on the prescribed terms and conditions and in prescribed manner.

• Marginal note:Repayment

  (10) Any amount lent pursuant to subsection (9) does not bear interest and shall be repaid, in prescribed manner, by the province before the expiration of the period of five years following the date the amount is lent or shall be recovered, in prescribed manner, from any amount that may become payable to the province pursuant to this Act within that period.

• (11) [Repealed, 2010, c. 25, s. 173]