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

PART III.2Coordinated Cannabis Taxation Agreements

Marginal note:Coordinated Cannabis Taxation Agreement

• 8.8 (1) The Minister, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement or arrangement with the government of a province respecting cannabis taxation and, without restricting the generality of the foregoing, respecting

  • (a) the collection, administration and enforcement of cannabis taxes in respect of the province under a single Act of Parliament;

  • (b) the provision to the Government of Canada by the government of the province, or to the government of the province by the Government of Canada, of

    • (i) information acquired in the administration and enforcement of Acts imposing cannabis taxes and Acts providing for rebates, refunds or reimbursements of cannabis taxes, paid or payable, or of amounts paid or payable as or on account of cannabis taxes, and

    • (ii) other information related to cannabis legalization and distribution relevant to the system of cannabis taxation under a single Act of Parliament;

  • (c) the accounting for taxes collected in accordance with the agreement;

  • (d) the implementation of and transition to the system of cannabis taxation contemplated under the agreement;

  • (e) payments, and the eligibility for payments, by the Government of Canada to the government of the province in respect of the revenues from the system of taxation contemplated under the agreement and to which the province is entitled under the agreement, the time when such payments will be made, and the remittance by the government of the province to the Government of Canada of any overpayments by the Government of Canada or the right of the Government of Canada to set off any overpayments against other amounts payable by the Government of Canada to the government of the province, whether under the agreement or any other agreement or arrangement or any Act of Parliament;

  • (f) the payment by the Government of Canada and its agents and subservient bodies, and by the government of the province and its agents and subservient bodies, of the cannabis taxes payable under the system of cannabis taxation contemplated under the agreement and the accounting for the cannabis taxes so paid;

  • (g) the compliance by the Government of Canada and its agents and subservient bodies, and by the government of the province and its agents and subservient bodies, with the Act of Parliament under which the system of cannabis taxation is administered and regulations made under that Act; and

  • (h) other matters that relate to, and that are considered advisable for the purposes of implementing or administering, the system of cannabis taxation contemplated under the agreement.

• Marginal note:Amending agreements

  (2) The Minister, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement with the government of a province amending or varying an agreement or arrangement with the province entered into under subsection (1) or this subsection.

Marginal note:Payments

8.81 If there is a coordinated cannabis taxation agreement with the government of a province, the appropriate minister may pay to the province out of amounts received in a fiscal year under the Act of Parliament referred to in paragraph 8.8(1)(a)

• (a) amounts determined in accordance with the agreement as provided, and at such times as are specified, in the agreement; and

• (b) subject to the regulations, advances in respect of the amounts referred to in paragraph (a).

Marginal note:Statutory authority to make payments

8.82 Despite any other Act, the payments paid under a coordinated cannabis taxation agreement under the authority of section 8.81 may be made without any other or further appropriation or authority.

PART III.3Coordinated Vaping Product Taxation Agreements

Marginal note:Coordinated Vaping Product Taxation Agreement

• 8.9 (1) The Minister, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement or arrangement with the government of a province respecting the taxation of vaping products and, without restricting the generality of the foregoing, respecting

  • (a) the collection, administration and enforcement of taxes on vaping products in respect of the province under a single Act of Parliament;

  • (b) the provision to the Government of Canada by the government of the province, or to the government of the province by the Government of Canada, of

    • (i) information acquired in the administration and enforcement of Acts imposing taxes on vaping products and Acts providing for rebates, refunds or reimbursements of taxes on vaping products, paid or payable, or of amounts paid or payable as or on account of the taxation of vaping products, and

    • (ii) other information related to the regulation of vaping and the distribution of vaping products relevant to the system of taxation of vaping products under a single Act of Parliament;

  • (c) the accounting for taxes collected in accordance with the agreement;

  • (d) the implementation of and transition to the system of taxation of vaping products contemplated under the agreement;

  • (e) payments, and the eligibility for payments, by the Government of Canada to the government of the province in respect of the revenues from the system of taxation contemplated under the agreement and to which the province is entitled under the agreement, the time when such payments will be made, and the remittance by the government of the province to the Government of Canada of any overpayments by the Government of Canada or the right of the Government of Canada to set off any overpayments against other amounts payable by the Government of Canada to the government of the province, whether under the agreement or any other agreement or arrangement or any Act of Parliament;

  • (f) the payment by the Government of Canada and its agents and subservient bodies, and by the government of the province and its agents and subservient bodies, of the taxes on vaping products payable under the system of taxation of vaping products contemplated under the agreement and the accounting for the taxes on vaping products so paid;

  • (g) the compliance by the Government of Canada and its agents and subservient bodies, and by the government of the province and its agents and subservient bodies, with the Act of Parliament under which the system of taxation of vaping products is administered and regulations made under that Act; and

  • (h) other matters that relate to, and that are considered advisable for the purposes of implementing or administering, the system of taxation of vaping products contemplated under the agreement.

• Marginal note:Amending agreements

  (2) The Minister, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement with the government of a province amending or varying an agreement or arrangement with the province entered into under subsection (1) or this subsection.

Marginal note:Payments

8.91 If there is a coordinated vaping product taxation agreement with the government of a province, the appropriate minister may pay to the province out of amounts received in a fiscal year under the Act of Parliament referred to in paragraph 8.9(1)(a)

• (a) amounts determined in accordance with the agreement as provided, and at such times as are specified, in the agreement; and

• (b) subject to the regulations, advances in respect of the amounts referred to in paragraph (a).

Marginal note:Statutory authority to make payments

8.92 Despite any other Act, the payments paid under a coordinated vaping product taxation agreement under the authority of section 8.91 may be made without any other or further appropriation or authority.

PART IVTransfer Payments with Respect to the Elimination of Provincial Capital Taxes

Marginal note:Definition of capital tax

9 In this Part, capital tax means a tax that is imposed on one or more of the following:

• (a) an element of shareholders’ equity in a corporation such as share capital or retained earnings;

• (b) a form of long-term indebtedness owed by a corporation; or

• (c) any other element of capital that the Minister considers appropriate.

It does not include

• (d) a tax imposed under Part VI.1 of the Taxation Act, R.S.Q., c. I-3;

• (e) a tax imposed under section 74.1 of the Corporations Tax Act, R.S.O. 1990, c. C-40; or

• (f) any tax that the Minister does not consider to be sufficiently similar to a tax imposed under Part I.3 or VI of the Income Tax Act.

9.1 [Repealed, 2007, c. 29, s. 63]

Marginal note:Incentive to eliminate capital taxes

• 10 (1) As an incentive for a province to eliminate capital taxes imposed by the province, the province is eligible to receive a payment under this Part if

  • (a) before January 2, 2011, it eliminates a capital tax that is imposed under a law of the province that was in force on March 18, 2007; and

  • (b) any legislation that is required to give effect to the elimination is enacted after March 18, 2007 and before January 2, 2011.

• Marginal note:Meaning of elimination

  (2) For the purposes of this Part, a capital tax is considered to be eliminated if

  • (a) under the law of the province, the tax ceases before January 2, 2011 to be imposed on all corporations, except that the tax may continue to be imposed on any corporation that is exempt from tax under any of paragraphs 149(1)(d) to (d.4) of the Income Tax Act on all of its taxable income; or

  • (b) in the case where the tax is imposed only on financial institutions, the law under which the tax is imposed is amended, before January 2, 2011, to replace the tax with a new capital tax imposed only on financial institutions that meets the following criteria:

    • (i) no financial institution becomes subject to the new capital tax that was not subject to the replaced tax,

    • (ii) every financial institution on which the new capital tax is imposed must be permitted to reduce the amount of the new capital tax payable by it for a taxation year by the amount of income tax payable by it to the province for the year and, if the amount of income tax so payable exceeds the amount of the new capital tax so payable, the financial institution must be permitted to apply the amount of the excess to reduce capital tax payable by it in other taxation years in a manner satisfactory to the Minister, and

    • (iii) the Minister is satisfied that the total amount of revenue that would be raised by the new capital tax from financial institutions if there were no reduction for income tax payable is intended to be broadly commensurate with the total amount of revenue raised from those financial institutions by the province’s income tax.

• Marginal note:Separate capital tax

  (3) If a province imposes a capital tax that applies to financial institutions as well as corporations that are not financial institutions, the capital tax is deemed to be two separate capital taxes for the purposes of this Part.

Marginal note:Amount of payment

• 11 (1) The amount that a province may be eligible to receive, in respect of a period fixed by the Minister, is equal to 17% of the estimated foregone revenue for that period.

• Marginal note:Preliminary payment

  (2) A province is eligible to receive a preliminary payment for a period if the province has provided information in accordance with section 12.01 such that the Minister is able to make a preliminary determination of the estimated foregone revenue for that period. The Minister shall try to make a preliminary payment to the province on or before the last day of the period if the Minister receives the information in a timely manner.

• Marginal note:Final determination

  (3) After finalized information that is consistent with a province’s public accounts becomes available so as to enable the Minister to make a final determination of the amount under subsection (1) in respect of a period, the Minister shall do so and reconcile the final determination with any preliminary payment paid to the province. If the amount of the final determination is greater than the preliminary payment, the Minister shall, without delay, pay the difference to the province. However, if the amount of the final determination is less than the preliminary payment, the difference may be deducted from any amount payable to the province under this Act or be recovered from the province as a debt due to Her Majesty in right of Canada.

• Marginal note:Program time limit

  (4) For the purposes of determining the amount of a payment under this Part, a period shall not include a day that is before March 19, 2007 or after January 1, 2011.

• Marginal note:Consolidated Revenue Fund

  (5) The Minister may pay to a province, out of the Consolidated Revenue Fund, any amount that the province is eligible to receive under this Part.

Marginal note:Estimated foregone revenue

• 12 (1) Except where subsection (2) applies, the estimated foregone revenue for a province in respect of a period is the amount, as determined by the Minister, by which

  • (a) the estimated base revenue, determined as the estimated amount of revenue in respect of a specific capital tax that the province would have received in respect of the period from corporations that would have been subject to tax under Part I of the Income Tax Act under the laws of the province as they read on March 18, 2007, including any enactment that would be applicable to the period but that had not come into force on or before that date,

  exceeds

  • (b) the estimated actual revenue, determined as the estimated amount of revenue in respect of the capital tax that the province receives in respect of the period from corporations that are subject to tax under Part I of the Income Tax Act.

• Marginal note:Estimated foregone revenue — capital tax on financial institutions

  (2) In the case of a capital tax that has been eliminated as described in paragraph 10(2)(b), the estimated foregone revenue for a province in respect of a period is the amount determined by the Minister to be the estimated amount of revenue in respect of the capital tax that the province would have received in respect of the period from financial institutions that would have been subject to tax under Part I of the Income Tax Act under the laws of the province as they read on March 18, 2007, including any enactment that would be applicable to the period but that had not come into force on or before that date.

Marginal note:Provision of information

• 12.01 (1) No payment may be made to a province under this Part unless the province provides to the Minister all of the information that the Minister considers necessary for the determination of the amount of that payment in accordance with this Part.

• Marginal note:Certification by Minister of province

  (2) All information provided by a province shall be of the best quality that is available at the time it is provided and shall be certified as such by an appropriate minister of the provincial government.