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

3.8 [Repealed, 2013, c. 33, s. 118]

Marginal note:Interpretation

• 3.9 (1) The following definitions apply in this section and in sections 3.71 and 3.72.

  average annual per capita yield

  average annual per capita yield means, in respect of a province for a revenue source for a fiscal year, the amount determined by the formula

  (A + B + C) / (D + E + F)

  where

  A

  is the yield for that revenue source for the fiscal year that is one year prior to that fiscal year;

  B

  is the yield for that revenue source for the fiscal year that is two years prior to that fiscal year;

  C

  is the yield for that revenue source for the fiscal year that is three years prior to that fiscal year;

  D

  is the population of that province for the fiscal year that is one year prior to that fiscal year;

  E

  is the population of that province for the fiscal year that is two years prior to that fiscal year; and

  F

  is the population of that province for the fiscal year that is three years prior to that fiscal year. (rendement annual moyen par habitant)

  average annual population

  average annual population means, in respect of a province for a fiscal year, the amount determined by the formula

  (A + B + C) / 3

  where

  A

  is the population of that province for the fiscal year that is one year prior to that fiscal year;

  B

  is the population of that province for the fiscal year that is two years prior to that fiscal year; and

  C

  is the population of that province for the fiscal year that is three years prior to that fiscal year. (population annuelle moyenne)

  average annual revenue base

  average annual revenue base means, in respect of a province for a revenue source for a fiscal year, the amount determined by the formula

  (A + B + C) / 3

  where

  A

  is the revenue base for the fiscal year that is one year prior to that fiscal year;

  B

  is the revenue base for the fiscal year that is two years prior to that fiscal year; and

  C

  is the revenue base for the fiscal year that is three years prior to that fiscal year. (assiette annuelle moyenne)

  national average rate of tax

  national average rate of tax means, in respect of a revenue source, the rate equal to the quotient obtained by dividing the aggregate of the revenue to be equalized for a revenue source for a fiscal year for all provinces by the revenue base in respect of that revenue source for that fiscal year for all provinces. (taux d’imposition national moyen)

  revenue base

  revenue base means, in respect of a revenue source for a province for a fiscal year, the measure of the relative capacity of that province to derive revenue from that revenue source for that fiscal year and may be defined more particularly by the regulations. (assiette)

  revenue source

  revenue source means any of the following sources from which provincial revenues are or may be derived:

  • (a) personal income taxes;

  • (b) corporation income taxes, and revenues derived from government business enterprises that are not included in any other paragraph of this definition;

  • (c) taxes on capital of corporations;

  • (d) general and miscellaneous sales taxes, harmonized sales taxes and amusement taxes;

  • (e) tobacco taxes;

  • (f) motive fuel taxes derived from the sale of gasoline;

  • (g) motive fuel taxes derived from the sale of diesel fuel;

  • (h) non-commercial motor vehicle licensing revenues;

  • (i) commercial motor vehicle licensing revenues;

  • (j) alcoholic beverage revenues;

  • (k) hospital and medical care insurance premiums;

  • (l) forestry revenues from

    • (i) crown lands, and

    • (ii) private lands;

  • (m) conventional new oil revenues;

  • (n) conventional old oil revenues;

  • (o) heavy oil revenues;

  • (p) mined oil revenues;

  • (q) light and medium third tier oil revenues;

  • (r) heavy third tier oil revenues;

  • (s) revenues from domestically sold natural gas and exported natural gas;

  • (t) sales of Crown leases and reservations on oil and natural gas lands;

  • (u) oil and gas revenues other than those described in paragraphs (m) to (t);

  • (v) mining revenues;

  • (w) water power rentals;

  • (x) insurance premium taxes;

  • (y) payroll taxes;

  • (z) provincial and local government property taxes;

  • (z.1) race track taxes;

  • (z.2) revenues from lottery ticket sales;

  • (z.3) revenues, other than those described in paragraphs (z.1) and (z.2), from games of chance;

  • (z.4) miscellaneous provincial taxes and revenues, provincial revenues from sales of goods and services, local government revenues from sales of goods and services, and miscellaneous local government taxes and revenues; and

  • (z.5) revenues of the Government of Canada from any of the following sources that are shared by Canada with a province:

    • (i) Newfoundland and Labrador offshore revenues,

    • (ii) Nova Scotia offshore revenues, and

    • (iii) revenues from any other source referred to in this definition. (source de revenu)

  revenue to be equalized

  revenue to be equalized means, in respect of a revenue source for a province for a fiscal year, the revenue, as determined by the Minister, derived by that province for that fiscal year from that revenue source and may be defined more particularly by the regulations. (revenu sujet à péréquation)

  yield

  yield means, in respect of a province for a revenue source for a fiscal year, an amount equal to the product obtained by multiplying the national average rate of tax for that revenue source for that fiscal year by that province’s revenue base in respect of that revenue source for that fiscal year. (rendement)

• Marginal note:Deduction in computing revenue to be equalized

  (2) In computing the revenue to be equalized from personal incomes taxes — referred to in paragraph (a) of the definition revenue source in subsection (1) — for all the provinces for a fiscal year, the Minister may deduct from the amount that, but for this subsection, would be the revenue to be equalized from that revenue source for all the provinces for that fiscal year, the amount, as estimated by the Minister, by which the revenues derived by Canada under the Income Tax Act from personal income taxes for the taxation year ending in that fiscal year are less than the revenues that would have been derived by Canada under that Act from those taxes if no special abatement of those taxes had been provided under subsection 120(2) of that Act or Part VI of this Act.

• Marginal note:Municipal property taxes and miscellaneous revenues and taxes

  (3) For the purpose of determining the revenue to be equalized derived by a province for a fiscal year from the revenue sources referred to in paragraphs (a) and (b), the following are deemed to be revenues derived by that province for that fiscal year from those revenue sources:

  • (a) in the case of the part of the revenue source referred to in paragraph (z) of the definition revenue source in subsection (1) that consists of local government property taxes, the aggregate of the revenue derived from that part of the revenue source by each municipality, board, commission or other local authority in that province that has power to levy property taxes for the financial year of each such local authority ending in that fiscal year; and

  • (b) in the case of the part of the revenue source referred to in paragraph (z.4) of the definition revenue source in subsection (1) that consists of local government revenues from sales of goods and services and miscellaneous local government taxes and revenues, the aggregate of the revenue derived from that part of the revenue source by each municipality, board, commission or other local authority in that province that has power to derive those revenues for the financial year of each such local authority ending in that fiscal year.

• (4) to (7) [Repealed, 2013, c. 33, s. 119]

General

Marginal note:Time of calculation — ss. 3.2 to 3.4

• 3.91 (1) At a time determined by the Minister, no later than three months before the beginning of a fiscal year, the Minister shall calculate

  • (a) the fiscal equalization payment that may be paid to a province under sections 3.2 and 3.4 for that fiscal year on the basis that the province makes an election under subsection 3.2(2) for that fiscal year; and

  • (b) the fiscal equalization payment that may be paid to the province under those sections for that fiscal year on the basis that the province does not make an election under that subsection for that fiscal year.

• Marginal note:Time of calculation — section 3.72

  (2) The fiscal equalization amounts referred to in section 3.72 for a fiscal year shall be calculated no later than three months before the end of the fiscal year.

• (3) to (5) [Repealed, 2013, c. 33, s. 120]

Marginal note:Underpayment

3.92 If the Minister determines that the Minister has underpaid any amounts payable to a province under this Part, the Minister may, within the prescribed time and in the prescribed manner, pay that province an amount equal to the underpayment.

Marginal note:Overpayment

3.93 If the Minister determines that the Minister has overpaid any amounts paid to a province under this Part, the Minister may recover the amount of that overpayment

• (a) within the prescribed time and in the prescribed manner, from any amount payable under this Act to that province; or

• (b) from that province as a debt due to Her Majesty in right of Canada.

Marginal note:Time and manner of payments

3.94 There may be paid out of the Consolidated Revenue Fund, on the requisition of the Minister, any amounts authorized to be paid by this Part at the times and in the manner that the Minister considers appropriate.

Marginal note:Recovery

3.95 If the Minister has made a payment to a province under subsection 4.2(1) of this Act as it read on the day before the day on which this section comes into force, the Minister shall, in the prescribed amounts, reduce the fiscal equalization payments to that province for the fiscal years in the period beginning on April 1, 2007 and ending on March 31, 2016. If, on March 31, 2016, the total amount of that payment has not been recovered, the Minister may recover the amount remaining as a debt due to Her Majesty in right of Canada out of any sum of money that may be due or payable by Her Majesty in right of Canada to that province pursuant to this Act or any other Act of Parliament.

Marginal note:Day of election

3.96 An election under this Part is deemed to have been made on the day on which the election is received by the Minister.

Marginal note:Deeming — final computation

3.97 For the purpose of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act, the final computation of the amount of the fiscal equalization payment for a fiscal year is deemed to have been made on March 1 of that fiscal year.

PART I.01Other Payments

Marginal note:Payments — Ontario and Prince Edward Island

• 3.98 (1) There may be paid out of the Consolidated Revenue Fund, on the requisition of the Minister, the following sums for the fiscal year beginning April 1, 2011:

  • (a) to Ontario, $150,365,000; and

  • (b) to Prince Edward Island, $1,089,000.

• Marginal note:Recovery

  (2) If the Minister has made a payment to a province under subsection (1), he or she shall reduce, by an amount equal to 1/10 of that payment, the fiscal equalization payments to that province for each of the fiscal years in the period beginning on April 1, 2012 and ending on March 31, 2022. If, for one of those fiscal years, it is not possible to reduce the fiscal equalization payment by that entire amount, he or she may recover the amount remaining as a debt due to Her Majesty in right of Canada out of any sum of money that may be due or payable by Her Majesty in right of Canada to that province under this Act for that fiscal year.

PART I.1Territorial Financing

Interpretation

Marginal note:Definitions

• 4 (1) The following definitions apply in this Part.

  eligible revenues

  eligible revenues means, in respect of a territory for a fiscal year, the amount equal to the product obtained by multiplying the fiscal capacity of that territory for that fiscal year by 0.70. (revenus admissibles)

  fiscal capacity

  fiscal capacity means, in respect of a territory for a fiscal year, the amount determined by the formula

  (A + B + C) / 3

  where

  A

  is the aggregate of the yields in that territory for each revenue source for the fiscal year that is two years prior to that fiscal year;

  B

  is the aggregate of the yields in that territory for each revenue source for the fiscal year that is three years prior to that fiscal year;

  C

  is the aggregate of the yields in that territory for each revenue source for the fiscal year that is four years prior to that fiscal year. (capacité fiscale)

  gross expenditure base

  gross expenditure base means,

  • (a) for the fiscal year beginning on April 1, 2015, an amount equal to

    • (i) $1,065,524,388 in respect of Yukon,

    • (ii) $1,551,787,629 in respect of the Northwest Territories, and

    • (iii) $1,579,969,113 in respect of Nunavut; and

  • (b) in respect of a territory, for each subsequent fiscal year, an amount determined by the formula

    (A × B) + C

    where

    A

    is the amount determined to be the gross expenditure base for that territory for the fiscal year preceding that fiscal year,

    B

    is the population adjusted gross expenditure escalator for that territory for that fiscal year, and

    C

    is the gross expenditure base adjustment determined under paragraph 4.2(a) for that territory for that fiscal year. (base des dépenses brutes)

  national average rate of tax

  national average rate of tax means, in respect of a revenue source, the rate equal to the quotient obtained by dividing the aggregate of the revenue to be equalized for a revenue source for a fiscal year for all provinces and territories by the revenue base in respect of that revenue source for that fiscal year for all provinces and territories. (taux d’imposition national moyen)

  population adjusted gross expenditure escalator

  population adjusted gross expenditure escalator means, in respect of a territory for a fiscal year, a factor equal to the product obtained by multiplying

  • (a) the population adjustment factor for that territory for the fiscal year

  by

  • (b) the provincial local government expenditure index for the fiscal year. (facteur de majoration des dépenses brutes rajustées en fonction de la population)

  population adjustment factor

  population adjustment factor means, in respect of a territory for a fiscal year, the measure of the population growth of that territory relative to the population growth of Canada and may be defined more particularly by the regulations. (facteur de rajustement en fonction de la population)

  provincial local government expenditure index

  provincial local government expenditure index means, for a fiscal year, the measure of changes in provincial and territorial government spending on programs and services and may be defined more particularly by the regulations. (indice provincial des dépenses des administrations locales)

  revenue base

  revenue base means, in respect of a revenue source for a territory for a fiscal year, the measure of the relative capacity of that territory to derive revenue from that revenue source for that fiscal year and may be defined more particularly by the regulations. (assiette)

  revenue block

  revenue block[Repealed, 2013, c. 33, s. 122]

  revenue source

  revenue source means any of the following sources from which territorial revenues are or may be derived:

  • (a) revenues relating to personal income;

  • (b) revenues relating to corporate income and government business enterprises;

  • (c) revenues derived from tobacco;

  • (d) revenues derived from motive fuel taxes from the sale of gasoline;

  • (e) revenues derived from motive fuel taxes from the sale of diesel fuel;

  • (f) revenues derived from the sale of alcoholic beverages;

  • (g) revenues derived from payroll taxes;

  • (h) revenues derived from property taxes; and

  • (i) revenues relating to consumption taxes excluding revenues derived from excise taxes. (source de revenu)

  revenue to be equalized

  revenue to be equalized, in respect of a revenue source for a territory for a fiscal year, means

  • (a) the revenue, as determined by the Minister, derived by that territory for that fiscal year from that revenue source; and

  • (b) in the case of a revenue source referred to in paragraphs (a), (b), (h) and (i) of the definition revenue source, the product obtained by multiplying the sum of miscellaneous revenues derived by that territory for the fiscal year by the quotient obtained by dividing the sum of revenues from that revenue source derived by all territories for that fiscal year by the sum of all revenues derived by all territories from the revenue sources referred to in paragraphs (a), (b), (h) and (i) of the definition revenue source for the fiscal year.

  It may be defined more particularly by the regulations. (revenu sujet à péréquation)

  superannuation adjustment

  superannuation adjustment means, in respect of a territory, for each fiscal year, the amount determined by the Minister of Public Works and Government Services to be equal to, with respect to the fiscal year that is two years prior to that fiscal year, the difference between the amount of the superannuation contribution that is payable by that territory under the Public Service Superannuation Act and the amount that would be payable by that territory under that Act as it read on June 16, 1999. (montant de l’indexation des pensions)

  yield

  yield means, in respect of a territory for a revenue source for a fiscal year, an amount equal to the aggregate of

  • (a) the product obtained by multiplying the national average rate of tax for that revenue source for that fiscal year by that territory’s revenue base in respect of that revenue source for that fiscal year, and

  • (b) the yield adjustment determined under paragraph 4.2(b) for that fiscal year. (rendement)

• Marginal note:Redetermination — gross expenditure base for 2016-2017

  (2) For the purposes of the definition gross expenditure base in subsection (1), the Minister may, at any time during the fiscal year beginning on April 1, 2016, recalculate the amount determined to be the gross expenditure base in respect of a territory for that fiscal year using the following population adjusted gross expenditure escalator:

  • (a) 1.02497 in respect of Yukon;

  • (b) 1.01377 in respect of the Northwest Territories; and

  • (c) 1.02833 in respect of Nunavut.