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

Act current to 2024-05-01

PART IVProvincial Tax Revenue Guarantee Payments (continued)

Marginal note:Specified converted rate

 For the purposes of this Part, the specified converted rate applicable to a province is

  • (a) in the case of Newfoundland, 36%;

  • (b) in the case of Prince Edward Island, 36%;

  • (c) in the case of Nova Scotia, 30.5%;

  • (d) in the case of New Brunswick, 41.5%;

  • (e) in the case of Ontario, 30.5%;

  • (f) in the case of Manitoba, 42.5%;

  • (g) in the case of Saskatchewan, 37%;

  • (h) in the case of Alberta, 36%; and

  • (i) in the case of British Columbia, 30.5%.

Marginal note:Definitions

 In this Part,

federal Act

federal Act means the Income Tax Act; (loi fédérale)

provincial Act

provincial Act in relation to any province means the Act of the legislature of the province that imposes taxes on the incomes of individuals or corporations, or both, as the case may be. (loi provinciale)

Marginal note:Subsection 12(2) not applicable

 Subsection 12(2) does not apply to a province that did not enter or was not deemed to have entered into a tax collection agreement under subsection 20(1) of the former Act.

PART VTransfer Payments with Respect to Tax on 1971 Undistributed Income on Hand

Marginal note:Transfer payments in respect of tax under Part IX of Income Tax Act

 Subject to this Act, the Minister may pay to a province, in respect of any tax paid under Part IX of the Income Tax Act by a corporation described therein, an amount computed in accordance with section 19.

Marginal note:Calculation of payments

 The amount that may be paid to a province under section 18 in respect of any tax paid under Part IX of the Income Tax Act by a corporation described therein is an amount, as determined by the Minister of National Revenue, equal to 20% of that proportion of the tax so paid that

  • (a) the corporation’s taxable income earned in its 1971 taxation year in the province

is of

  • (b) the corporation’s taxable income earned in its 1971 taxation year in Canada,

except that where the taxable income of a corporation earned in its 1971 taxation year in Canada would, but for this subsection, be nil, the corporation shall be deemed to have a taxable income earned in its 1971 taxation year in Canada equal to the tax paid by it under Part IX of the Income Tax Act.

Marginal note:Recovery of refunds made under Part IX of Income Tax Act

 Where, in respect of any dividend paid by a corporation controlled (within the meaning assigned by section 28 of the Income Tax Act as it read in its application to the 1971 taxation year) by a Canadian corporation, the Minister of National Revenue has, under subsection 196(2) of the Income Tax Act, made a payment to the controlling corporation, an amount equal to 20% of that proportion of the payment so made to the controlling corporation that the controlled corporation’s taxable income earned in its 1971 taxation year in a province is of the controlled corporation’s taxable income earned in its 1971 taxation year in Canada, as determined under section 19, may be recovered in accordance with the regulations as an overpayment made to the province under this Act.

Marginal note:Meaning of certain words and expressions

 For the purpose of this Part,

  • (a) the “taxable income” of a corporation earned in a year in a province has the meaning given to that expression by section 40 of the Income Tax Act as it read in its application to the 1971 taxation year;

  • (b) the “taxable income” of a corporation earned in a year in Canada means the aggregate of the taxable incomes of the corporation earned in the year in each of the provinces including the Northwest Territories and Yukon Territory; and

  • (c) other words and expressions, except “province”, have the same meaning as in the Income Tax Act.

PART VIPost-Secondary Education Adjustment Payments

Marginal note:Post-secondary education adjustment payments

 Subject to this Act, the Secretary of State may, for each fiscal year in the period commencing with the 1st day of April, 1972 and ending with the 31st day of March, 1977, authorize the payment to a province of a post-secondary education adjustment payment not exceeding the amount computed in accordance with this Part.

  • 1972, c. 8, s. 22
  • 1973-74, c. 45, s. 3

Marginal note:Adjustment payments

  •  (1) Subject to subsection (2) and section 24, the adjustment payment that may be paid to a province for a fiscal year is the amount by which,

    • (a) in the case of the Provinces of New Brunswick, Prince Edward Island and Newfoundland, the product obtained by multiplying

      • (i) the amount for the immediately preceding fiscal year determined under paragraph 13(2)(b) of the former Act if that year commenced with the 1st day of April, 1971, or determined under this paragraph if that year commenced with or after the 1st day of April, 1972,

      by

      • (ii) the quotient obtained by dividing

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

        by

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

    • (b) in the case of any other province, the amount, as determined by the Secretary of State, that is equal to 50% of the operating expenditures for post-secondary education in the province in the fiscal year,

    exceeds the aggregate of

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

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

    • (e) the portion, determined in prescribed manner, of the provincial tax revenue guarantee payment payable to the province for the fiscal year under Part IV that is attributable to the federal revenue reduction relating to post-secondary education applicable to the province for the fiscal year.

  • Marginal note:Alteration of adjustment payments

    (2) Subject to section 24, where the adjustment payment that may be paid to a province described in paragraph (1)(a) for a fiscal year is less than the amount by which

    • (a) the amount, as determined by the Secretary of State, equal to 50% of the operating expenditures for post-secondary education in the province in the fiscal year

    exceeds

    • (b) the aggregate for the fiscal year of the amounts determined under paragraphs (1)(c), (d) and (e) in the case of the province,

    the adjustment payment that may be paid to the province for the fiscal year is the amount by which the amount referred to in paragraph (a) exceeds 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 (1)(b).

  • 1972, c. 8, s. 23
  • 1973-74, c. 45, s. 4

Marginal note:Limitation on amount of federal contribution

  •  (1) Where, for any fiscal year commencing with or after the 1st day of April, 1972,

    • (a) the aggregate of the federal contributions to each of the provinces is greater than 115% of the aggregate of the federal contributions to each of the provinces for the immediately preceding fiscal year, and

    • (b) the federal contribution to a particular province is greater than 115% of the federal contribution to that particular province for the immediately preceding fiscal year,

    the adjustment payment that may be paid to any one particular province described in paragraph (b) for the fiscal year is an amount determined by the following rules:

    • (c) determine the amount by which

      • (i) the aggregate of the federal contributions to each of the provinces for the fiscal year

      exceeds

      • (ii) 115% of the aggregate of the federal contributions to each of the provinces for the immediately preceding fiscal year;

    • (d) determine, for each particular province described in paragraph (b), the amount by which

      • (i) the federal contribution to that particular province for the fiscal year

      exceeds

      • (ii) 115% of the federal contribution to that particular province for the immediately preceding fiscal year;

    • (e) determine the aggregate of the amounts determined under paragraph (d) for each of the provinces to which that paragraph applies;

    • (f) determine, for each particular province described in paragraph (b), the proportion, as a percentage, that the amount determined under paragraph (d) in the case of that province is of the aggregate determined under paragraph (e);

    • (g) determine, for each particular province described in paragraph (b), the product obtained by multiplying the percentage determined under paragraph (f) in the case of that province by the amount determined under paragraph (c);

    and the adjustment payment that may be paid to any one particular province described in paragraph (b) for the fiscal year is the amount that, but for this section, would be the adjustment payment payable to that province for the fiscal year minus the amount determined under paragraph (g) in the case of that province.

  • Marginal note:Determination of amount of federal contribution to province for fiscal year

    (2) For the purpose of applying subsection (1) to determine the adjustment payment that may be paid to a province for the fiscal year commencing with the 1st day of April, 1972, the amount of the federal contribution to a province for any fiscal year is,

    • (a) in the case of the fiscal year commencing with the 1st day of April, 1971, an amount, as determined by the Secretary of State, equal to the aggregate of

      • (i) the adjustment payment that may be paid to the province for that fiscal year, computed under section 13 of the former Act, and

      • (ii) the aggregate for that fiscal year determined under paragraph 13(2)(c) of the former Act in the case of the province, and

    • (b) in the case of the fiscal year commencing with the 1st day of April, 1972, an amount, as determined by the Secretary of State, equal to the aggregate of

      • (i) the adjustment payment that, but for this section, would be payable to the province for that fiscal year, and

      • (ii) the aggregate for that fiscal year of the amounts determined under paragraphs 23(1)(c), (d) and (e) in the case of the province;

    and for the purpose of applying subsection (1) to determine the adjustment payment that may be paid to a province for the fiscal year commencing with the 1st day of April, 1973, the amount of the federal contribution to a province for any fiscal year is,

    • (c) in the case of the fiscal year commencing with the 1st day of April, 1972, an amount, as determined by the Secretary of State, equal to the aggregate of

      • (i) the adjustment payment that may be paid to the province for that fiscal year, and

      • (ii) the aggregate for that fiscal year of the amounts determined under paragraphs 23(1)(c), (d) and (e) in the case of the province, and

    • (d) in the case of the fiscal year commencing with the 1st day of April, 1973, an amount, as determined by the Secretary of State, equal to the aggregate of

      • (i) the adjustment payment that, but for this section, would be payable to the province for that fiscal year, and

      • (ii) the aggregate for that fiscal year of the amounts determined under paragraphs 23(1)(c), (d) and (e) in the case of the province.

  • Marginal note:Determination of amount of contribution

    (3) For the purpose of applying subsection (1) to determine the adjustment payment that may be paid to a province for each fiscal year in the period commencing with the 1st day of April, 1974 and ending with the 31st day of March, 1977, the amount of the federal contribution to a province for any such fiscal year is

    • (a) in the case of that fiscal year, an amount, as determined by the Secretary of State, equal to the aggregate of

      • (i) the adjustment payment that, but for this section, would be payable to the province for that fiscal year, and

      • (ii) the aggregate for that fiscal year of the amounts determined under paragraphs 23(1)(c), (d) and (e) in the case of the province; and

    • (b) in the case of the immediately preceding fiscal year, an amount, as determined by the Secretary of State, equal to the aggregate of

      • (i) the adjustment payment that may be paid to the province for that immediately preceding fiscal year, and

      • (ii) the aggregate for that immediately preceding fiscal year of the amounts determined under paragraphs 23(1)(c), (d) and (e) in the case of the province.

  • 1972, c. 8, s. 24
  • 1973-74, c. 45, s. 5

Marginal note:Operating expenditures

  •  (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, as determined by the Secretary of State, incurred for post-secondary education by or in respect of each of the educational institutions in the province during the financial years of such institutions 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 provided by the regulations;

    • (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; or

    • (g) such portion of any account 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 the regulations.

  • 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 the purposes of this subsection to be an amount paid in respect of post-secondary education.

 

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