Federal-Provincial Fiscal Arrangements Act (R.S.C., 1985, c. F-8)

Short Title

Marginal note:Short title

1 This Act may be cited as the Federal-Provincial Fiscal Arrangements Act.

Interpretation

Marginal note:Definitions

• 2 (1) In this Act,

  aboriginal government

  aboriginal government means an Indian, an Inuit or a Métis government or the council of the band, as defined in subsection 2(1) of the Indian Act; (gouvernement autochtone)

  administration agreement

  administration agreement means

  • (a) an agreement between the Government of Canada and the government of a province or an aboriginal government under which

    • (i) the Government of Canada will administer and enforce an Act of the legislature of the province, or legislation made by an aboriginal government, that imposes a tax and will make payments to the province or the aboriginal government in respect of the taxes collected, in accordance with the terms and conditions of the agreement, or

    • (ii) the government of the province will administer and enforce an Act of Parliament that imposes a tax and will make payments to the Government of Canada in respect of the taxes collected, in accordance with the terms and conditions of the agreement, or

  • (b) an agreement between the Government of Canada and the government of a province under which the government of the province will administer and enforce a First Nation law that imposes a tax and will make payments to the Government of Canada in respect of the taxes collected, in accordance with the terms and conditions of the agreement; (accord d’application)

  coordinated cannabis taxation agreement

  coordinated cannabis taxation agreement means an agreement or arrangement entered into by the Minister on behalf of the Government of Canada under Part III.2, including any amendments or variations to the agreement or arrangement made in accordance with that Part; (accord de coordination de la taxation du cannabis)

  coordinated vaping product taxation agreement

  coordinated vaping product taxation agreement means an agreement or arrangement entered into by the Minister on behalf of the Government of Canada under Part III.3, including any amendments or variations to the agreement or arrangement made in accordance with that Part; (accord de coordination de la taxation des produits de vapotage)

  First Nation law

  First Nation law has the meaning assigned by subsection 11(1) or 12(1) of the First Nations Goods and Services Tax Act; (texte législatif autochtone)

  fiscal year

  fiscal year means the period beginning on April 1 in one year and ending on March 31 in the next year; (exercice)

  former Act

  former Act means the Federal-Provincial Fiscal Arrangements Act, 1972, chapter 8 of the Statutes of Canada, 1972; (ancienne loi)

  Minister

  Minister, other than in sections 25 to 25.5, means the Minister of Finance; (ministre)

  prescribed

  prescribed means prescribed by regulations made by the Governor in Council pursuant to section 40; (prescrit)

  sales tax harmonization agreement

  sales tax harmonization agreement means an agreement or arrangement entered into by the Minister on behalf of the Government of Canada and authorized, or ratified and confirmed, under Part III.1 including any amendments or variations to the agreement or arrangement that are authorized, or ratified and confirmed, under that Part; (accord d’harmonisation de la taxe de vente)

  tax collection agreement

  tax collection agreement means an agreement between the Government of Canada and the government of a province pursuant to which the Government of Canada will collect, on behalf of the province, taxes that the province imposes on the incomes of individuals or corporations, or both, and will make payments to the province in respect of the taxes so collected in accordance with the terms and conditions of the agreement. (accord de perception fiscale)

• Marginal note:Definition of province

  (2) In Parts I, I.1 and II, province does not include Yukon, the Northwest Territories or Nunavut.

• Marginal note:Determination of population

  (3) For the purposes of this Act, the population of a province, or, before April 1, 1999, of the part of the Northwest Territories that became Nunavut or the part that remained as the Northwest Territories, for a fiscal year is the population of the province or the part for that fiscal year as determined by the Chief Statistician of Canada in the prescribed manner.

• Marginal note:Determination of gross domestic product

  (3.1) For the purposes of this Act, the gross domestic product of Canada for a calendar year is the gross domestic product of Canada for the year as determined by the Chief Statistician of Canada in prescribed manner.

• Marginal note:References to “Act”

  (4) In the definition administration agreement in subsection (1) and in Part III, a reference to an Act shall be read as a reference to an Act or a part thereof.

PART IFiscal Equalization Payments

Fiscal Equalization Payments to Provinces

Marginal note:Fiscal equalization payment

3 Subject to the other provisions of this Act, there may be paid to a province a fiscal equalization payment not exceeding the amounts determined under this Part for each fiscal year in the period beginning on April 1, 2007 and ending on March 31, 2029.

3.1 [Repealed, 2013, c. 33, s. 110]

3.11 [Repealed, 2013, c. 33, s. 110]

Marginal note:Additional fiscal equalization payment

• 3.12 (1) An additional fiscal equalization payment may be paid for the fiscal year beginning on April 1, 2010 equal to,

  • (a) for Nova Scotia, $250,405,000;

  • (b) for New Brunswick, $80,300,000;

  • (c) for Manitoba, $175,494,000; and

  • (d) for Prince Edward Island, $3,304,000.

• Marginal note:Additional fiscal equalization payment — 2011-2012 fiscal year

  (2) An additional fiscal equalization payment may be paid for the fiscal year beginning on April 1, 2011 equal to,

  • (a) for Quebec, $368,932,000;

  • (b) for Nova Scotia, $157,591,000;

  • (c) for New Brunswick, $149,776,000; and

  • (d) for Manitoba, $275,808,000.

• Marginal note:Additional fiscal equalization payment — 2012-2013 fiscal year

  (3) An additional fiscal equalization payment may be paid for the fiscal year beginning on April 1, 2012 equal to,

  • (a) for Quebec, $362,127,000;

  • (b) for Nova Scotia, $13,471,000;

  • (c) for New Brunswick, $102,767,000; and

  • (d) for Manitoba, $201,295,000.

• Marginal note:Additional fiscal equalization payment — 2013-2014 fiscal year

  (4) An additional fiscal equalization payment may be paid for the fiscal year beginning on April 1, 2013 equal to,

  • (a) for New Brunswick, $48,891,000; and

  • (b) for Manitoba, $6,915,000.

Marginal note:General rule

• 3.2 (1) Subject to the other provisions of this Part, the fiscal equalization payment that may be paid to a province for a fiscal year is the amount, as determined by the Minister, equal to the greater of

  • (a) the amount determined by the formula

    (A + B) × C

    where

    A

    is the aggregate of the amounts obtained by subtracting, for each revenue source except the one referred to in paragraph (e) of the definition revenue source in subsection 3.5(1), the average annual per capita yield in that province for the revenue source for that fiscal year from the average annual per capita national yield for the revenue source for that fiscal year,

    B

    is 50% of the amount obtained by subtracting, for the revenue source referred to in paragraph (e) of the definition revenue source in subsection 3.5(1), the average annual per capita revenue to be equalized for that province for that fiscal year from the average annual per capita national revenue to be equalized for that fiscal year, and

    C

    is the average annual population of that province for that fiscal year, and

  • (b) the amount determined by the formula

    A × C

    where

    A and C

    have the same meaning as in paragraph (a).

• Marginal note:Province may elect otherwise

  (2) Despite subsection (1), a province may elect, at the prescribed time and in the prescribed manner, that the fiscal equalization payment that may be paid to that province for a fiscal year be equal to the amount determined by the formula set out in paragraph (1)(a).

• Marginal note:Negative amount

  (3) For the purposes of this Part, if the amount of a fiscal equalization payment computed in accordance with subsection (1) or (2) is negative, that amount is considered to be zero.

• (4) [Repealed, 2013, c. 33, s. 112]

3.3 [Repealed, 2013, c. 33, s. 113]

Marginal note:Less than 50% of population

• 3.4 (1) If the aggregate of the average annual population of all provinces for a fiscal year to which a fiscal equalization payment would be paid for that fiscal year, if the amount of that payment were determined under paragraph 3.2(1)(a), is less than 50% of the aggregate of the average annual population of all provinces for that fiscal year and if the amount that may be paid to a province for that fiscal year under section 3.2 would, if paid, result in that province having, in that fiscal year, a total per capita fiscal capacity that is greater than the per capita equalized fiscal capacity of any province that would not receive a fiscal equalization payment for that fiscal year if the amount of that payment were determined under paragraph 3.2(1)(a), the fiscal equalization payment that may be paid to that province for that fiscal year determined under section 3.2 shall be reduced by the amount determined by the formula

  (A – B) × C

  where

  A

  is the total per capita fiscal capacity of that province for that fiscal year;

  B

  is the per capita equalized fiscal capacity for that fiscal year of the province that has the lowest per capita equalized fiscal capacity for that fiscal year and that would not receive a fiscal equalization payment for that fiscal year if the amount of that payment were determined under paragraph 3.2(1)(a); and

  C

  is the average annual population of that province for that fiscal year.

• Marginal note:50% or more of population

  (2) If the aggregate of the average annual population of all provinces for a fiscal year to which a fiscal equalization payment would be paid for that fiscal year, if the amount of that payment were determined under paragraph 3.2(1)(a), is 50% or more of the aggregate of the average annual population of all provinces for that fiscal year, the fiscal equalization payment that may be paid to a province for that fiscal year determined under section 3.2 shall be reduced by the greater of the following amounts:

  • (a) zero, and

  • (b) the amount determined by the formula

    (A – B) × C

    where

    A

    is the total per capita fiscal capacity of that province for that fiscal year,

    B

    is the quotient obtained by dividing the aggregate of the equalized fiscal capacity of all provinces to which a fiscal equalization payment would be paid for that fiscal year, if the amount of that payment were determined under paragraph 3.2(1)(a), by the aggregate of the average annual population of all of those provinces for that fiscal year, and

    C

    is the average annual population of that province for that fiscal year.

• Marginal note:Re-calculation

  (3) If, as a result of the application of subsection (2), the amount of the fiscal equalization payment that may be paid to any province for a fiscal year is reduced to zero, that subsection applies again, but the description of B in that subsection does not include, for that fiscal year, the equalized fiscal capacity and the average annual population of any province to which the amount of the fiscal equalization payment is reduced to zero.

• Marginal note:Multiple applications

  (4) For greater certainty, subsection (3) applies after each application of subsection (2).

• Marginal note:Aggregate payment

  (5) The aggregate of the fiscal equalization payments that would be paid for a fiscal year beginning after March 31, 2010, if the amounts of those payments were determined under subsections (1) to (4) and section 3.2 as if no province had made an election under subsection 3.2(2), shall be equal to the amount determined by the formula

  A × (1 + B)

  where

  A

  is, for the fiscal year beginning on April 1, 2010, $14,185,000,000 and, for a fiscal year beginning after March 31, 2011, the amount determined under this subsection for the previous fiscal year; and

  B

  is the average of the annual rates of growth of the nominal gross domestic product of Canada, as determined by the Minister, for the calendar year that ends during the fiscal year in question and for the two previous calendar years.

• Marginal note:Calculation

  (6) If the aggregate of the fiscal equalization payments that would be paid for a fiscal year, if the amounts of those payments were determined under subsections (1) to (4) and section 3.2 as if no province had made an election under subsection 3.2(2), exceeds the amount determined under subsection (5), the fiscal equalization payment that may be paid to a province for that fiscal year determined under subsections (1) to (4) and section 3.2 shall be reduced by the amount determined by the formula

  A × B

  where

  A

  is the lesser of the per capita equalization payment for that province for that fiscal year and the per capita reduction; and

  B

  is the average annual population of that province for that fiscal year.

• Marginal note:Per capita calculation

  (7) For the purposes of subsection (6), the Minister shall determine the per capita reduction for a fiscal year and shall, in making that determination, ensure that the aggregate of the reductions referred to in that subsection is equal to the amount determined by the formula

  A – B

  where

  A

  is the aggregate of the fiscal equalization payments that would be paid for that fiscal year, if the amounts of those payments were determined under subsections (1) to (4) and section 3.2 as if no province had made an election under subsection 3.2(2); and

  B

  is the amount determined under subsection (5).

• Marginal note:Adjustment payment

  (8) If the aggregate of the fiscal equalization payments that would be paid for a fiscal year, if the amounts of those payments were determined under subsections (1) to (4) and section 3.2 as if no province had made an election under subsection 3.2(2), is less than the amount determined under subsection (5), there may be paid to a province for that fiscal year an adjustment payment that is,

  • (a) in the case of a province to which a fiscal equalization payment would be paid for that fiscal year, if the amount of that payment were determined under subsections (1) to (4) and section 3.2, the amount determined by the formula

    A × B

    where

    A

    is the per capita adjustment for that fiscal year, and

    B

    is the average annual population of that province for that fiscal year; and

  • (b) in any other case, the greater of zero and the amount determined by the formula

    (C + D – E) × F

    where

    C

    is the per capita pre-adjustment equalized fiscal capacity for that fiscal year of the province that has the greatest per capita pre-adjustment equalized fiscal capacity for that fiscal year of the provinces referred to in paragraph (a),

    D

    is the per capita adjustment for that fiscal year,

    E

    is the per capita pre-adjustment equalized fiscal capacity of the province in question for that fiscal year, and

    F

    is the average annual population of the province in question for that fiscal year.

• Marginal note:Per capita adjustment

  (9) For the purposes of subsection (8), the Minister shall determine the per capita adjustment for a fiscal year and shall, in making that determination, ensure that the aggregate of the adjustment payments referred to in that subsection is equal to the amount determined by the formula

  A – B

  where

  A

  is the amount determined under subsection (5); and

  B

  is the aggregate of the fiscal equalization payments that would be paid for that fiscal year, if the amounts of those payments were determined under subsections (1) to (4) and section 3.2 as if no province had made an election under subsection 3.2(2).

• (10) [Repealed, 2013, c. 33, s. 114]