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

Marginal note:Operating expenditures

• 25 (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.

Marginal note:Federal revenue reduction

26 For the purpose of this Part, the federal revenue reduction relating to post-secondary education applicable to a province for a fiscal year is an amount equal to the aggregate of

• (a) 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 4.357% of the tax otherwise payable, within the meaning of paragraph 120(4)(c) of the Income Tax Act, under Part I of that Act on those incomes, and

• (b) 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 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 ending in the calendar year that ends in the fiscal year, at the rate of 1% of its taxable income earned in the province in that taxation year.

Marginal note:Determination of operating expenditures

• 27 (1) In determining the operating expenditures for post-secondary education in a province in a fiscal year, the Secretary of State 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 the regulations, 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 relation to a province, means an institution in that province that offers at post-secondary level only prescribed programs of study. (établissement secondaire)

Marginal note:Failure to file return

28 Where a provincial return of operating expenditures for a fiscal year as described in subsection 27(2) has not been submitted to the Secretary of State within 12 months after the end of the fiscal year, the Secretary of State, 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 to be equal to 50% 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

29 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 27(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 27(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 in respect thereof as he considers appropriate.

Marginal note:Definitions

• 30 (1) In this Part,

  adjustment payment

  adjustment payment means a post-secondary education adjustment payment referred to in section 22; (paiement de rajustement)

  educational institution

  educational institution means an institution of learning that offers courses at a post-secondary level; (établissement d’enseignement)

  federal revenue reduction relating to post-secondary education

  federal revenue reduction relating to post-secondary education applicable to a province for a fiscal year has the meaning given to that expression by section 26; (réduction du revenu fédéral relative à l’enseignement post-secondaire)

  junior matriculation

  junior matriculation, in relation to a province, has the meaning given to that expression by the regulations; (immatriculation junior)

  operating expenditures

  operating expenditures for post-secondary education in a province in a fiscal year has the meaning given to that expression by section 25; (frais de fonctionnement)

  post-secondary education

  post-secondary education, in relation to a province, means every course of studies in the province that

  • (a) requires for admission the attainment of a level not lower than that of junior matriculation in the province,

  • (b) is of not less than 24 weeks duration, and

  • (c) has been certified as a course of studies at a post-secondary level by such person or persons as may be designated by the Lieutenant-Governor in Council of the province for such purpose; (enseignement post-secondaire)

  post-secondary level

  post-secondary level has the meaning given to that expression by the regulations. (niveau post-secondaire)

• Marginal note:Determination of population and financial year

  (2) For the purposes of this Part,

  • (a) the population of a province for a calendar year is the population on the 1st day of June in that year as estimated by the Chief Statistician of Canada; and

  • (b) a financial year of an educational institution is related to a fiscal year if more than ½ of the total number of days in the financial year fall within the fiscal year.

Marginal note:Application of former Act

31 Part II of the former Act is not applicable in respect of any fiscal year commencing with or after the 1st day of April, 1972.

PART VIIGeneral

Regulations

Marginal note:Regulations

32 The Governor in Council may make regulations

• (a) defining, for the purposes of this Act,

  • (i) the expression “revenue base” for a revenue source for a province for a fiscal year,

  • (ii) the expressions referred to in paragraphs (a) to (t) of the definition revenue source in subsection 4(3),

  • (iii) the expressions “junior matriculation and “post-secondary level”,

  • (iv) the expression “assisted, sponsored or contract research”, and

  • (v) the expression “operating expenditures incurred for post-secondary education” by or in respect of an educational institution or secondary institution;

• (b) respecting the payment to a province of advances on account of any amount that may become payable to the province pursuant to this Act or a tax collection agreement, the adjustment of other payments by reason of such advances and the recovery of overpayments;

• (c) prescribing the time and manner of making any payment under this Act or a tax collection agreement;

• (d) prescribing the accounts to be kept and their management;

• (e) respecting the determination of any matter that under this Act is to be determined by the Minister, the Minister of National Revenue or the Secretary of State;

• (f) respecting any matter that by this Act is to be defined, provided or prescribed by, or done in accordance with, the regulations; and

• (g) generally for carrying into effect the purposes and provisions of this Act.