Federal-Provincial Fiscal Arrangements Regulations, 2007

10 (1) The following definitions apply in this section.

personal taxes

personal taxes means

• (a) taxes imposed by a province on the income of individuals, not including trusts, net of

  • (i) tax credits that can be simulated for individuals in all provinces on the basis of information available within, or imputable to, the micro-simulation model, and

  • (ii) in respect of income taxes imposed by Quebec, the refundable Quebec abatement described in paragraph 2500(3)(e) of the Income Tax Regulations; and

• (b) if this definition is being applied for the purpose of

  • (i) clause 5(a)(i)(A), levies or premiums imposed by a province on individuals specifically for the purpose of financing hospital insurance, medical care insurance or drug insurance, other than contributions to the Nova Scotia Seniors’ Pharmacare Program or the Alberta supplementary health benefits plans, or

  • (ii) clause 8(1)(a)(i)(A), the Ontario Health Premium and the Quebec Health Contribution. (impôts des particuliers)

provincial system

provincial system means the set of rules relating to the imposition of personal taxes in a province. (régime provincial)

(2) For the purpose of clauses 5(a)(i)(A) and 8(1)(a)(i)(A), the simulated average revenue yield relating to personal income for the province for a taxation year ending in a fiscal year shall be determined by means of the micro-simulation model by

• (a) simulating, in respect of each provincial system in turn, the total amount of personal taxes that would be derived from all individuals in the province in the taxation year if that provincial system applied to those individuals;

• (b) simulating, in respect of each provincial system in turn, the total amount of personal taxes that would be derived from all individuals in all provinces in the taxation year if that provincial system applied to those individuals;

• (c) dividing the amount simulated in respect of each provincial system under paragraph (a) by the amount simulated in respect of the same provincial system under paragraph (b);

• (d) calculating the weight of each province’s provincial system, which shall be equal to a fraction

  • (i) whose numerator is the revenues referred to in subparagraphs 4(1)(a)(i) and (iii) or paragraph 7(1)(a), as the case may be, for the province, as set out in the certificate for the fiscal year, and

  • (ii) whose denominator is the aggregate, over all provinces, of the revenues referred to in subparagraph (i);

• (e) multiplying each amount calculated under paragraph (c) by the respective weight calculated under paragraph (d); and

• (f) calculating the sum of the 10 products calculated under paragraph (e).