Federal-Provincial Fiscal Arrangements Act (R.S.C. 1970, c. F-6)

Marginal note:Post-secondary education adjustment payments

12 Subject to this Act, the Secretary of State of Canada may, for each fiscal year in the period commencing on the 1st day of April 1967 and ending on the 31st day of March 1972, authorize the payment to a province of a post-secondary education adjustment payment not exceeding the amount computed in accordance with section 13.

Marginal note:Adjustment payments for 1967

• 13 (1) The adjustment payment that may be paid to a province for the fiscal year commencing on the 1st day of April 1967 is an amount equal to

  • (a) the greater of

    • (i) an amount, as determined by the Secretary of State of Canada, equal to fifty per cent of the operating expenditures for post-secondary education in the province in the fiscal year, and

    • (ii) the product obtained by multiplying $15 by the population of the province for the 1967 calendar year,

  minus

  • (b) the aggregate of

    • (i) the federal revenue abatement relating to post-secondary education applicable to the province for the fiscal year,

    • (ii) in the case of a province described in paragraph 7(b) or (c), the lesser of

      • (A) the portion, as determined in prescribed manner, of the provincial revenue equalization payment payable to the province for the fiscal year that is attributable to the federal revenue abatement relating to post-secondary education applicable to the province for the fiscal year, and

      • (B) the amount, if any, by which the general equalization applicable to the province for the fiscal year, computed in accordance with section 8, exceeds the guaranteed equalization applicable to the province for the fiscal year, computed in accordance with subsection 9(1) or (2), as the case may be, and

    • (iii) in the case of any other province, the portion, as determined in prescribed manner, of the provincial revenue equalization payment payable to the province for the fiscal year that is attributable to the federal revenue abatement relating to post-secondary education applicable to the province for the fiscal year.

• Marginal note:Adjustment payments after 1967

  (2) Subject to subsection (3), the adjustment payment that may be paid to a province for a fiscal year commencing after the 1st day of April 1967 is an amount equal to

  • (a) in the case of a province in respect of which the amount determined under subparagraph (1)(a)(i) is greater than the amount determined under subparagraph (1)(a)(ii), the amount, as determined by the Secretary of State of Canada, that is equal to fifty per cent of the operating expenditures for post-secondary education in the province in the fiscal year;

  • (b) in the case of any other province, the product obtained by multiplying

    • (i) the amount determined for the immediately preceding fiscal year under paragraph (1)(a) if such year commenced on the 1st day of April 1967, or under this paragraph if such year commenced after the 1st day of April 1967,

    by

    • (ii) the quotient derived by dividing

      • (A) the aggregate of the amounts, as determined by the Secretary of State of Canada, of the operating expenditures for post-secondary education in all of the provinces in the fiscal year,

      by

      • (B) the aggregate of the amounts, as determined by the Secretary of State of Canada, of the operating expenditures for post-secondary education in all of the provinces in the immediately preceding fiscal year,

  minus

  • (c) the aggregate of

    • (i) the federal revenue abatement relating to post-secondary education applicable to the province for the fiscal year,

    • (ii) in the case of a province described in paragraph 7(b) or (c), the lesser of

      • (A) the portion determined in the manner described in clause (1)(b)(ii)(A) for the fiscal year, and

      • (B) the amount, if any, determined in the manner described in clause (1)(b)(ii)(B) for the fiscal year, and

    • (iii) in the case of any other province, the amount determined in the manner described in subparagraph (1)(b)(iii) for the fiscal year.

• Marginal note:Alteration of adjustment payments

  (3) Where the adjustment payment that may be paid to a province, other than a province described in paragraph (2)(a), for a fiscal year commencing after the 1st day of April 1967 is less than

  • (a) the amount, as determined by the Secretary of State of Canada, equal to fifty per cent of the operating expenditures for post-secondary education in the province in the fiscal year

  minus

  • (b) the aggregate determined in the manner described in paragraph (2)(c) for the fiscal year,

  the adjustment payment that may be paid to the province for the fiscal year shall be an amount equal to the amount referred to in paragraph (a) minus the aggregate referred to in paragraph (b), and in computing the adjustment payment that may be paid to the province for any subsequent fiscal year the province shall be deemed to be a province described in paragraph (2)(a).

Marginal note:Operating expenditures

• 14 (1) Subject to subsections (2) and (3), the operating expenditures for post-secondary education in a province in a fiscal year are the aggregate of the operating expenditures incurred for post-secondary education by or in respect of each educational institution in the province during the financial year of the institution related to the fiscal year, but do not include

  • (a) any amount expended in respect of student financial aid;

  • (b) any amount expended as or on account of the capital cost of land, buildings, physical plant, facilities or equipment, except as otherwise proviced by regulation;

  • (c) any amount expended as or on account of interest;

  • (d) any amount expended in payment of a capital debt;

  • (e) any provision for depreciation on buildings, physical plant, facilities or equipment;

  • (f) any amount expended in respect of a prescribed ancillary enterprise undertaken or operated by an educational institution; and

  • (g) such portion of any amount expended as or on account of rent on land, buildings, physical plant, facilities or equipment as may be prescribed.

• Marginal note:Idem

  (2) In determining the operating expenditures incurred for post-secondary education by or in respect of an educational institution during a financial year of the institution, there shall be deducted from the amount thereof otherwise determined

  • (a) any amount received by the institution in the year for assisted, sponsored or contract research; and

  • (b) any amount received by the institution in the year from Her Majesty in right of Canada or any agent thereof or from the Canada Council;

  except as otherwise provided by regulation.

• Marginal note:Idem

  (3) In determining the operating expenditures for post-secondary education in a province in a fiscal year, there shall be deducted from the amount thereof otherwise determined any amount paid to the province in the year by Her Majesty in right of Canada or any agent thereof, otherwise than pursuant to this Act, that is prescribed for purposes of this subsection to be an amount paid in respect of post-secondary education.

Marginal note:Federal revenue abatement

15 The federal revenue abatement relating to post-secondary education applicable to a province for a fiscal year is the amount of the revenue loss sustained by Canada in respect of the fiscal year, by virtue of certain deductions permitted by Part I of the Income Tax Act in computing income taxes payable for a taxation year ending in the fiscal year, calculated as the aggregate of

• (a) the amount, as determined by the Minister, that would be derived from a tax

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

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

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

  equal to four one-hundredths of the tax otherwise payable, within the meaning of section 33 of the Income Tax Act, on those incomes; and

• (b) the amount, as determined by the Minister, that would be derived from a tax on the income earned in the province by each corporation (other than a non-resident owned investment corporation as defined in the Income Tax Act or a corporation specified in Schedule D to the Financial Administration Act 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, for the purposes of the Income Tax Act, 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, such tax to be computed as if imposed under the Income Tax Act and regulations thereunder.

Marginal note:Determination of operating expenditures

• 16 (1) In determining the operating expenditures for post-secondary education in a province in a fiscal year, the Secretary of State of Canada shall have recourse to and be guided by

  • (a) any provincial return of operating expenditures submitted to him for the fiscal year;

  • (b) any information contained in a report made to him by the Minister of Supply and Services in connection with such operating expenditures; and

  • (c) such additional information as he may consider appropriate.

• Marginal note:Provincial return

  (2) For the purposes of this section a provincial return of operating expenditures for a fiscal year is a statistical return, in prescribed form, relating to the operating expenditures for post-secondary education in the province in the fiscal year,

  • (a) that has been signed by the Deputy Minister of Education of the province or such other provincial officer as may be designated by the Lieutenant Governor in Council for the purpose; and

  • (b) that has been certified by the provincial auditor as having been examined by him, and, to the best of his knowledge and belief,

    • (i) as accurately setting forth the operating expenditures for post-secondary education in the province in the fiscal year, calculated in accordance with the requirements of this Act and the regulations, and

    • (ii) as being based on

      • (A) financial returns for the fiscal year in respect of each educational institution in the province that is not a secondary institution, and

      • (B) a financial report for the fiscal year in respect of all secondary institutions in the province.

• Marginal note:Financial returns and report

  (3) For the purposes of subsection (2)

  • (a) a financial return for a fiscal year in respect of an educational institution that is not a secondary institution is a statement relating to the operating expenditures incurred for post-secondary education by that institution during its financial year related to the fiscal year, that has been certified by an independent auditor as having been examined by him, and, to the best of his knowledge and belief, as accurately setting forth the operating expenditures incurred for post-secondary education by that institution during its financial year, calculated in accordance with the requirements of this Act and the regulations; and

  • (b) a financial report for a fiscal year in respect of all secondary institutions in a province is a statement setting forth the operating expenditures incurred for post-secondary education by or in respect of all such institutions during their financial years related to the fiscal year, that has been signed by the Deputy Minister of Education of the province or such other provincial officer as may be designated by the Lieutenant Governor in Council for the purpose.

• Marginal note:Definitions

  (4) In this section

  independent auditor

  independent auditor means an auditor who is a member in good standing of an institution or association of accountants incorporated by or under the authority of the legislature of a province but who is not, except as otherwise provided by regulation, the same person or a member of the same firm or office of auditors as, or employed by the same employer as, the provincial auditor; (vérificateur indépendant)

  provincial auditor

  provincial auditor means such person as is charged by law with the audit of the accounts of a province; (vérificateur provincial)

  secondary institution

  secondary institution, in respect of a province, means an institution in that province that offers at a post-secondary level only prescribed programs of study. (établissement secondaire)

Marginal note:Failure to file return

17 Where a provincial return of operating expenditures for a fiscal year as described in subsection 16(2) has not been submitted to the Secretary of State of Canada,

• (a) in the case of the fiscal year commencing on the 1st day of April 1967, within twelve months after the end of the fiscal year, and

• (b) in the case of any subsequent fiscal year, within nine months after the end of the fiscal year,

the Secretary of State of Canada, in determining the operating expenditures for post-secondary education in the province in the fiscal year, shall have recourse to and be guided by such information available to him as he considers appropriate, but in no such case shall the amount determined by the Secretary of State of Canada to be equal to fifty per cent of the operating expenditures for post-secondary education in the province in the fiscal year be less than the product obtained by multiplying $15 by the population of the province for the calendar year ending in the fiscal year.

Marginal note:Report of Minister of Supply and Services

18 The Minister of Supply and Services may, after consultation with the appropriate provincial authority,

• (a) examine any financial return for a fiscal year in respect of an educational institution, as described in subsection 16(3), and

• (b) request and receive from the independent auditor who certified any financial return for a fiscal year in respect of an educational institution, as described in subsection 16(3), such information, reports and explanations as he deems necessary in order to satisfy himself as to the method and procedure employed by such auditor in determining the operating expenditures incurred for post-secondary education by that institution during its financial year related to the fiscal year,

and shall make such report to the Secretary of State of Canada in respect thereof as he considers appropriate.

Marginal note:C.R.F.

19 The amounts authorized to be paid by section 12 shall be paid out of the Consolidated Revenue Fund at such times and in such manner as may be prescribed.

PART IIIGeneral

Tax Collection Agreements

Marginal note:Tax collection agreements

• 20 (1) Where a province imposes taxes on the income of individuals or corporations or both, the Minister, with the approval of the Governor in Council, may, on behalf of the Government of Canada, enter into an agreement with the government of the province pursuant to which the Government of Canada will collect the provincial taxes on behalf of the province and will make payments to the province in respect of the taxes so collected, in accordance with such terms and conditions as the agreement prescribes.

• Marginal note:Amendments to agreements

  (2) The Minister, with the approval of the Governor in Council, may, on behalf of the Government of Canada, enter into an agreement amending the terms and conditions of an agreement entered into pursuant to subsection (1).

• Marginal note:Application of requirements of provincial law to certain persons

  (3) Where the law of a province that imposes a tax on income as described in subsection (1) contains provisions requiring every person making a payment of a specified kind to another person to deduct or withhold therefrom an amount and to remit that amount on account of such tax, effect may be given to those provisions, in accordance with the regulations, in relation to persons to whom such payments are made out of the Consolidated Revenue Fund or by an agent of Her Majesty in right of Canada.