Federal-Provincial Fiscal Arrangements Regulations, 2007

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

personal taxes

personal taxes means

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

  • (i) tax credits that can be simulated for individuals in all provinces and territories 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) levies or premiums imposed by a province or territory 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. (impôts des particuliers)

provincial or territorial system

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

(2) For the purpose of clause 19(1)(a)(i)(A), the simulated average revenue yield relating to provincial or territorial personal income for the province or territory 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 or territorial system in turn, the total amount of personal taxes that would be derived from all individuals in the province or territory in the taxation year if that provincial or territorial system applied to those individuals;

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

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

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

  • (i) whose numerator is the revenues referred to in paragraph 18(1)(a) for the province or territory, as set out in the certificate for the fiscal year, and

  • (ii) whose denominator is the aggregate, over all provinces and territories, 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 13 products calculated under paragraph (e).