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Federal-Provincial Fiscal Arrangements Act, 1972 (S.C. 1972, c. 8)

Act current to 2024-05-01

PART IIProvincial Revenue Stabilization Payments

Marginal note:Provincial revenue stabilization payments

 Subject to this Act, the Minister may pay to a province, for each fiscal year in the period commencing with the 1st day of April, 1972 and ending with the 31st day of March, 1977, a provincial revenue stabilization payment not exceeding the amount computed in accordance with section 6.

Marginal note:Calculation of payments

  •  (1) The provincial revenue stabilization payment that may be paid to a province for a fiscal year is the amount, as determined by the Minister, by which

    • (a) the revenue subject to stabilization of the province for the immediately preceding fiscal year

    exceeds

    • (b) the revenue subject to stabilization of the province for the fiscal year, adjusted in prescribed manner to reflect the amount, as determined by the Minister, of any change in the revenue subject to stabilization of the province for the fiscal year resulting from changes either in the rates or in the structure of provincial taxes or other revenues from those or from that in effect in the immediately preceding fiscal year.

  • Marginal note:Revenue subject to stabilization defined

    (2) In this section, revenue subject to stabilization of a province for a fiscal year means the aggregate of

    • (a) the total revenues, as determined by the Minister, derived by the province for the fiscal year from the revenue sources referred to in the definition revenue source in subsection 4(3), and

    • (b) each amount payable to the province for the fiscal year, as determined in accordance with this Act not later than 24 months after the end of the fiscal year, as a provincial revenue equalization payment under Part I or a provincial tax revenue guarantee payment under Part IV.

  • Marginal note:Idem

    (3) For the purpose of determining pursuant to subsection (2) the revenue subject to stabilization of a province for a fiscal year,

    • (a) paragraphs (a), (b) and (c) of the definition total revenues to be equalized in subsection 4(3) apply mutatis mutandis; and

    • (b) where a tax collection agreement is in force between the Government of Canada and the province with respect to personal income taxes or corporation income taxes, or both, the revenue of the province for the fiscal year therefrom shall be deemed to be the amount payable by the Government of Canada to the province, as determined in accordance with the agreement not later than 24 months after the end of the fiscal year, pursuant to the agreement for the fiscal year.

  • Marginal note:Application by province for payment

    (4) A provincial revenue stabilization payment may be paid to a province for a fiscal year only upon receipt by the Minister, not later than 18 months after the end of the fiscal year, of an application by the province therefor containing such information as may be prescribed.

Marginal note:Application of former Act

 Part I of the former Act is not applicable in respect of any fiscal year commencing after the 31st day of March, 1972.

PART IIITax Collection Agreements

Marginal note:Personal income and corporation income tax collection agreements

  •  (1) Where a province imposes taxes on the incomes 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 a tax collection 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 taxes on incomes 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 any 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.

  • Marginal note:Agreement entered into under former Act

    (4) Where an agreement was entered into pursuant to subsection 20(1) or (2) of the former Act or was deemed by section 21 of that Act to have been entered into pursuant to subsection 20(1) of that Act, the agreement shall be deemed to have been entered into pursuant to subsection (1) of this section.

Marginal note:Succession duty and gift tax collection agreements

  •  (1) Where a province imposes duties or taxes on any legacy, succession, inheritance or gift, the Minister, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into a tax collection agreement with the government of the province pursuant to which the Government of Canada will collect the provincial duties or taxes on behalf of the province and will make payments to the province in respect of the duties or 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:Terms of agreements

    (3) No agreement relating to duties imposed by a province on any legacy, succession or inheritance may be entered into by the Minister, pursuant to this section, that applies to any such duties imposed in the case of the death of any person whose death occurred after 1974.

Marginal note:Advance payments under agreements

 Where a province has entered into a tax collection agreement, the Minister, in accordance with the regulations, may make advance payments to the province out of the Consolidated Revenue Fund on account of any amount that may become payable to the province pursuant to the agreement.

PART IVProvincial Tax Revenue Guarantee Payments

Marginal note:Provincial tax revenue guarantee payments

 Subject to this Act, the Minister may pay to a province, for each fiscal year in the period commencing with the 1st day of April, 1972 and ending with the 31st day of March, 1977, a provincial tax revenue guarantee payment not exceeding the amount computed in accordance with section 12.

Marginal note:Calculation of provincial tax revenue guarantee payment

  •  (1) The provincial tax revenue guarantee payment that may be paid to a province for a fiscal year is the amount by which the aggregate of

    • (a) the total revenue, as determined by the Minister in accordance with the formula prescribed by the regulations, that would be derived by the province from a personal income tax on every individual

      • (i) who was resident in the province on the last day of the calendar year ending in the fiscal year, or

      • (ii) who, not being resident in the province on the last day of that calendar year, had income earned in that year in the province as determined under the provincial Act,

      computed in accordance with,

      • (iii) in the case of the Province of Ontario, the provincial Act, as it applied to the 1971 taxation year of individuals, at the rate of 28%,

      • (iv) in the case of the Province of Prince Edward Island, the provincial Act, as it applied to the 1971 taxation year of individuals, at the rate of 33%,

      • (v) in the case of the Province of Quebec, the federal Act, as it applied to the 1971 taxation year of individuals, at the rate of 31%, and

      • (vi) in the case of any other province, the provincial Act, as it applied to the 1971 taxation year of individuals, at the actual rate applicable thereunder to that taxation year;

    • (b) the total revenue, as determined by the Minister, that would be derived by the province from a corporation income tax on every corporation that maintained a permanent establishment in the province at any time in its taxation year ending in the calendar year that ends in the fiscal year, on its taxable income earned in that taxation year in the province computed in accordance with the federal Act, as it applied to the 1971 taxation year of such corporations, at the rate applicable under the provincial Act to the 1971 taxation year of corporations that maintained a permanent establishment in the province at any time in that taxation year, and

    • (c) the portion, determined in prescribed manner, of the provincial revenue equalization payment that would be payable to the province for the fiscal year under Part I in respect of the aggregate of the total revenue determined under paragraph (a) and the total revenue determined under paragraph (b), if for each of the provinces such revenues were the actual revenues derived by those provinces for the taxation years and from the revenue sources referred to in those paragraphs,

    exceeds the aggregate of

    • (d) the total revenue, as determined by the Minister, that would be derived by the province from a personal income tax on every individual

      • (i) who was resident in the province on the last day of the calendar year ending in the fiscal year, or

      • (ii) who, not being resident in the province on the last day of that calendar year, had income earned in that year in the province as determined under the provincial Act,

      computed in accordance with Part I of the federal Act, as it applied to the taxation year coinciding with that calendar year at the specified converted rate applicable to the province or in the case of the Province of Quebec at the rate of 34%,

      • (iii) in the case of the Province of Quebec, the federal Act, as it applied to the taxation year coinciding with that calendar year, at the rate of 34%, and

      • (iv) in the case of any other province, the provincial Act, as it applied to the taxation year coinciding with that calendar year, at the actual rate applicable thereunder to that taxation year,

    • (e) the total revenue, as determined by the Minister, derived by the province from a corporation income tax on every corporation that maintained a permanent establishment in the province at any time in its taxation year ending in the calendar year that ends in the fiscal year, on its taxable income earned in that taxation year in the province computed in accordance with the federal Act, as it applied to that taxation year of such corporations, at the rate referred to in paragraph (b), and

    • (f) the portion, determined in prescribed manner, of the provincial revenue equalization payment payable to the province for the fiscal year under Part I in respect of the aggregate of the total revenue determined under paragraph (d) and the total revenue determined under paragraph (e) derived from the revenue sources referred to in those paragraphs.

  • Marginal note:Idem

    (2) In the event that the actual rate of personal income tax applicable under a provincial Act for a taxation year described in paragraph (1)(d) is not the same as the specified converted rate applicable to the province, for the purpose of determining the provincial tax revenue guarantee payment that may be paid to the province for the fiscal year in which the calendar year coinciding with the taxation year ends, the total revenue determined under paragraph (1)(d) shall be deemed to be that proportion of the amount that, but for this subsection, would be the total revenue determined under that paragraph that

    • (a) the specified converted rate applicable to the province

    is of

    • (b) the actual rate of personal income tax applicable under the provincial Act for that taxation year.

  • Marginal note:Current year personal income tax revenue adjusted

    (3) For the purpose of paragraph (1)(d), the Minister, in determining the total revenue that would be derived by a province from a personal income tax in accordance with that paragraph, shall, in making the computation required thereby,

    • (a) interpret the federal Act as if section 120 thereof were not applicable and a taxpayer were not entitled to any deduction under section 126 or 127 of that Act;

    • (b) interpret the federal Act as if section 15 of An Act to Amend the Statute Law Relating to Income Tax (No. 3) (being chapter 30 of the Statutes of Canada, 1973-74) had not been enacted;

    • (c) add to the revenue, as otherwise determined, such amount as is allocated to the province for the taxation year by the Minister in respect of personal income tax revenues that have been collected by Canada for which no tax return has been filed under the federal Act and allocated among the provinces as unapplied moneys; and

    • (d) subtract from the revenue, as otherwise determined, any amount that under a provincial Act a taxpayer, in computing his tax thereunder, would be entitled to deduct in respect of foreign tax credit or logging tax credit.

  • Marginal note:Current year corporation tax revenue adjusted

    (4) The total revenue, as determined by the Minister under paragraph (1)(e), derived by the province from a corporation income tax shall, for the purpose of that paragraph, be deemed to be the amount otherwise determined thereunder less the portion of that amount that, in the opinion of the Minister, would not have been derived by the province had paragraph 12(1)(o), paragraph 18(1)(m) and subsections 69(6) and (7) of the federal Act not been enacted, to the extent that such amount is remitted or refunded by the province pursuant to provincial law to those taxpayers in the province that made payments in respect of that amount under the provincial Act.

  • 1972, c. 8, s. 12
  • 1974-75-76, c. 65, s. 2

Marginal note:Eligibility for payment

  •  (1) No payment under this Part may be made to a province for a fiscal year unless,

    • (a) pursuant to a tax collection agreement entered into or deemed to have been entered into under section 8, Canada, on behalf of the province, has undertaken to collect taxes imposed by the province under the provincial Act on the incomes of individuals for the taxation year ending in the fiscal year, or on the incomes of individuals for that taxation year and the incomes of corporations for taxation years ending in the calendar year that ends in the fiscal year, or

    • (b) the provisions of the provincial Act pursuant to which a tax is imposed on the incomes of individuals for the taxation year ending in the fiscal year, and the provisions of the federal Act pursuant to which a tax is imposed on the incomes of individuals for that taxation year, are, in the opinion of the Minister, similar as to weight and structure except for differences between the Acts with respect to personal deductions, which differences are not greater than those that existed between the Acts as they read in their application to the 1971 taxation year.

  • Marginal note:Reduction of provincial tax revenue guarantee payment

    (2) When the provisions of any amendment, modification or revision made in the federal Act, as it applies to a taxation year coinciding with a calendar year ending in a fiscal year, that would result in reducing the revenue derived pursuant to the federal Act for that taxation year are not implemented by a province under its provincial Act as it applies to that taxation year, the provincial tax revenue guarantee payment that may be paid to the province for the fiscal year may, notwithstanding any other provisions of this Part, be reduced by the additional amount that, in the opinion of the Minister, would not have been so derived pursuant thereto had the provincial Act as it applied to that taxation year been amended so as to comply with the provisions of the federal Act as it applied to that taxation year.

  • 1972, c. 8, s. 13
  • 1974-75-76, c. 65, s. 4

Marginal note:Eligibility for payment

 A province is not eligible for a tax revenue guarantee payment under this Part for the fiscal year commencing with the 1st day of April, 1972 and ending with the 31st day of March, 1973, unless,

  • (a) it had given notification in prescribed manner, on or before a prescribed date, to the effect that the rate of personal income tax applicable under the provincial Act to the 1972 taxation year will not exceed the specified converted rate applicable to that province, but the subsequent alteration of any rate of personal income tax applicable under the provincial Act, in the manner provided in a tax collection agreement relating to personal income taxes entered or deemed to have been entered into under section 8 between the Government of Canada and the province, does not render the province ineligible for a tax revenue guarantee payment under this Part, or

  • (b) in the opinion of the Minister, the revenue that would be derived by the province from a personal income tax on every individual

    • (i) who was resident in the province on the last day of 1972, or

    • (ii) who, not being resident in the province on the last day of 1972, had income earned in 1972 in the province as determined under the provincial Act,

    computed in accordance with the provincial Act, as it applied to the 1972 taxation year of individuals, at the rate that was in effect thereunder at the commencement of 1972 as being applicable to the 1972 taxation year of individuals, is not greater than the revenue derived by the province from a personal income tax on every individual described in subparagraph (i) or (ii), computed in accordance with the provincial Act, as it is applied to the 1971 taxation year of individuals, at the actual rate applicable thereunder to the 1971 taxation year.

  • 1972, c. 8, s. 14
  • 1973-74, c. 45, s. 2
 

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