An Act to authorize the making of certain fiscal payments to provinces, and to authorize the entry into tax collection agreements with provincesFederal-Provincial Fiscal Arrangements ActFederal-Provincial Fiscal Arrangements20196
22
F-7.8F-61970Short Title
Short titleThis Act may be cited as the Federal-Provincial Fiscal Arrangements Act.1966-67, c. 89, s. 1
Interpretation
DefinitionsIn this Actfiscal year means the period of twelve months commencing on the 1st day of April and ending on the 31st day of March next following; (année financière)former Act means the Federal-Provincial Fiscal Arrangements Act, chapter 58 of the Statutes of Canada, 1960-61; (loi antérieure)Minister means the Minister of Finance; (Ministre)prescribed means prescribed by regulation; (prescrit)province does not include the Northwest Territories or the Yukon Territory. (province)1966-67, c. 89, s. 2
Equalization, Stabilization and Succession Duty Payments
Provincial revenue equalization paymentsSubject to this Act, the Minister may pay to a province, for each fiscal year in the period commencing on the 1st day of April 1967 and ending on the 31st day of March 1972, a provincial revenue equalization payment not exceeding the amount computed in accordance with section 7.1966-67, c. 89, s. 3
Provincial revenue stabilization paymentsSubject to this Act, the Minister may pay to a province, for each fiscal year commencing on or after the 1st day of April 1967, a provincial revenue stabilization payment not exceeding the amount computed in accordance with section 10.1966-67, c. 89, s. 4
Succession duty paymentsThe Minister may, for each fiscal year commencing on or after the 1st day of April 1967, pay to a province that does not levy a succession duty as defined by regulation in respect of successions or transmissions consequent upon, or on property passing upon, any death occurring in the fiscal year, an amount equal to the basic estate tax applicable to the province for the fiscal year.IdemThe Minister may, for each fiscal year commencing on or after the 1st day of April 1967, pay to a province that levies a succession duty as defined by regulation in respect of successions or transmissions consequent upon, or on property passing upon, any death occurring in the fiscal year, if that province does not increase its succession duties in the fiscal year beyond the rates thereof in effect on the 31st day of March 1964, an amount equal to one-third of the basic estate tax applicable to the province for the fiscal year.Basic estate taxIn this section basic estate tax as applied to a province for a fiscal year means the amount, as determined by the Minister, that would be derived from a tax equal to seventy-five per cent of the total amount of estate tax payable pursuant to the Estate Tax Act in respect ofproperty situated in the province and included in the estates of persons dying in the fiscal year domiciled in the province,property situated in the province and included in the estates of persons dying in the fiscal year domiciled outside the province, andproperty (other than real property) situated outside Canada, passing to persons domiciled or resident in the province and included in the estates of persons dying in the fiscal year domiciled in the province.1966-67, c. 89, s. 5
C.R.F.The amounts authorized to be paid by sections 3, 4 and 5 shall be paid out of the Consolidated Revenue Fund at such times and in such manner as may be prescribed.1966-67, c. 89, s. 6
Provincial Revenue Equalization Payments
Provincial revenue equalization paymentsThe provincial revenue equalization payment that may be paid to a province for a fiscal year is an amount equal tothe general equalization applicable to the province for the fiscal year computed in accordance with section 8,in the case of a province to which a grant was paid under subsection 3(2) of the former Act in respect of the fiscal year commencing on the 1st day of April 1966, the guaranteed equalization applicable to the province for the fiscal year computed in accordance with subsection 9(1), orin the case of the Province of Saskatchewan and in respect of each fiscal year in the period commencing on the 1st day of April 1967 and ending on the 31st day of March 1971, the guaranteed equalization applicable to the province for the fiscal year computed in accordance with subsection 9(2),whichever is the greatest.1966-67, c. 89, s. 7
General equalizationThe general equalization applicable to a province for a fiscal year is an amount, as determined by the Minister, equal to the product obtained by multiplying the population of the province for the fiscal year by the amount, if any, that will causethe per capita amount derived by dividingthe aggregate of the products obtained by multiplying the national average provincial revenue rate for each revenue source for the fiscal year by the revenue base for that revenue source for the province for the fiscal year,bythe population of the province for the fiscal year,to equalthe per capita amount derived by dividingthe aggregate of the products obtained by multiplying the national average provincial revenue rate for each revenue source for the fiscal year by the revenue base for that revenue source for all the provinces for the fiscal year,bythe total population of all the provinces for the fiscal year.DefinitionsIn this sectionfiscal period for a revenue source means such period as may be prescribed, in the case of that revenue source, for the purpose of determining the national average provincial revenue rate for that revenue source for a fiscal year; (exercice financier)national average provincial revenue rate for a revenue source for a fiscal year is the rate derived by dividingthe total revenue, as determined by the Minister, from that revenue source for all the provinces for the fiscal period prescribed in the case of that revenue source,bythe total revenue base, as determined by the Minister, for that revenue source for all the provinces for the fiscal period prescribed in the case of that revenue source; (taux national moyen du revenu provincial)revenue base for a revenue source for a province for a fiscal year has the meaning given to that expression by regulation; (base de revenu)revenue source means any of the following sources, as more particularly defined by regulation, from which provincial revenues are or may be derived, namely:personal income tax,corporation income tax,succession duties and shares of estate tax,general sales tax,motor fuel tax,motor vehicle revenues,alcoholic beverage revenues,forestry revenues,oil royalties,natural gas royalties,sales of Crown leases and reservations on oil and natural gas lands,oil and gas revenues, other than those described in paragraphs (i), (j) and (k),metallic and non-metallic mineral revenues,water power rentals,provincial taxes, other than those described in any of paragraphs (a) to (n), andmiscellaneous provincial revenues. (source de revenu)ApplicationIn determining for the purposes of the definition national average provincial revenue rate in subsection (2) the revenue from the revenue source described in paragraph (a) of the definition revenue source in subsection (2) for a province for a fiscal year, the Minister may deduct from the amount that but for this subsection would have been the revenue therefrom the estimated amount, as determined by the Minister, by which the revenues derived by Canada from individual income taxes for the taxation year ending in that fiscal year under the Income Tax Act are less than the revenues that would have been derived from such taxes for that taxation year if no additional amounts had been deductible under section 33 of that Act, in the case of individuals resident in that province in that taxation year,in consequence of the province providing schooling allowances within the meaning of the Youth Allowances Act, andin consequence of the application to that province of the Established Programs (Interim Arrangements) Act.Determination of populationFor purposes of this sectionthe population of a provincefor a calendar year in which a census thereof was taken, is the population as ascertained by the census, andfor any other calendar year, is the population on the 1st day of June in that year as estimated by the Dominion Statistician on the assumption that the population changed by the same number of persons annually between censuses; andthe population of a province for a fiscal year is the population determined in accordance with this subsection for the calendar year in which the fiscal year begins.R.S.C. 1970, c. F-6, s. 8; 1970-71-72, c. 43, s. 3
Guaranteed equalizationThe guaranteed equalization applicable to a province referred to in paragraph 7(b) for a fiscal year is an amount equal to the aggregate ofthe amounts payable to the province under subsections 3(1) and (2) of the former Act in respect of the fiscal year commencing on the 1st day of April 1966,in the case of the Provinces of Nova Scotia, New Brunswick and Newfoundland, the amount of ten and one-half million dollars each, andin the case of the Province of Prince Edward Island, the amount of three and one-half million dollars.Saskatchewan transitional paymentsThe guaranteed equalization applicable to the Province of Saskatchewan for a fiscal year is an amount, as determined by the Minister, equal to the product obtained by multiplying the amount payable to the Province of Saskatchewan under subsection 3(1) of the former Act in respect of the fiscal year commencing on the 1st day of April 1966, by the following fraction:in respect of the fiscal year commencing on April 1, 1967, four-fifths;in respect of the fiscal year commencing on April 1, 1968, three-fifths;in respect of the fiscal year commencing on April 1, 1969, two-fifths; andin respect of the fiscal year commencing on April 1, 1970, one-fifth.1966-67, c. 89, s. 9
Provincial Revenue Stabilization Payments
Provincial revenue stabilization paymentsThe provincial revenue stabilization payment that may be paid to a province for a fiscal year is the amount, as determined by the Minister, by whichninety-five per cent of the net general revenue of the province for the immediately preceding fiscal yearexceedsthe adjusted current net general revenue of the province for the fiscal year.DefinitionsIn this sectionadjusted current net general revenue, as applied to a province for a fiscal year, means the net general revenue for the fiscal year adjusted in prescribed manner on the basis of the revenue rates and revenue structure of the province in effect for the immediately preceding year; (revenu général net courant ajusté)net general revenue, as applied to a province for a fiscal year, means the net general revenue for the fiscal year as shown in the table “Net General Revenue for Fiscal Year” in the publication of the Dominion Bureau of Statistics entitled “Provincial Government Finance, Revenue and Expenditure”, altered in prescribed manner to reflectthe average revenue of the province from the revenue source described in paragraph (c) of the definition revenue source in subsection 8(2) for that and the two immediately preceding fiscal years, andthe average revenue of the province from the revenue source described in paragraph (k) of the definition revenue source in subsection 8(2) for that and the four immediately preceding fiscal years,and minus any amount deductible under subsection 8(3) in determining the revenue of the province for the fiscal year from the revenue source referred to in that subsection. (revenu général net)Application to be madeA provincial revenue stabilization payment may be paid to a province in respect of a fiscal year only upon receipt by the Minister, not later than eighteen months after the end of the fiscal year, of an application by the province therefor containing such information as may be prescribed.1966-67, c. 89, s. 10
Post-Secondary Education Adjustment Payments
DefinitionsIn this Partadjustment payment means a post-secondary education adjustment payment referred to in section 12; (paiement de rajustement)educational institution means an institution of learning that offers courses at a post-secondary level; (établissement d’enseignement)federal revenue abatement relating to post-secondary education applicable to a province for a fiscal year has the meaning given to that expression by section 15; (abattement du revenu fédéral relatif à l’enseignement post-secondaire)junior matriculation, in respect of a province, has the meaning given to that expression by regulation; (immatriculation junior)operating expenditures for post-secondary education in a province in a fiscal year has the meaning given to that expression by section 14; (frais de fonctionnement)post-secondary education, in respect of a province, means every course of studies in the province thatrequires for admission the attainment of a level not lower than that of junior matriculation in the province,is of not less than twenty-four weeks duration, andhas been certified as a course of studies at a post-secondary level by such person or persons as may be designated by the Lieutenant Governor in Council of the province for such purpose; (enseignement post-secondaire)post-secondary level has the meaning given to that expression by regulation. (niveau post-secondaire)Determination of population and financial yearFor the purposes of this Partthe population of a province for a calendar year is the population on the 1st day of June in that year as estimated by the Dominion Statistician; anda financial year of an educational institution is related to a fiscal year if more than one-half of the total number of days in the financial year fall within the fiscal year.1966-67, c. 89, s. 11
Post-secondary education adjustment paymentsSubject to this Act, the Secretary of State of Canada may, for each fiscal year in the period commencing on the 1st day of April 1967 and ending on the 31st day of March 1972, authorize the payment to a province of a post-secondary education adjustment payment not exceeding the amount computed in accordance with section 13.1966-67, c. 89, s. 12
Adjustment payments for 1967The adjustment payment that may be paid to a province for the fiscal year commencing on the 1st day of April 1967 is an amount equal tothe greater ofan amount, as determined by the Secretary of State of Canada, equal to fifty per cent of the operating expenditures for post-secondary education in the province in the fiscal year, andthe product obtained by multiplying $15 by the population of the province for the 1967 calendar year,minusthe aggregate ofthe federal revenue abatement relating to post-secondary education applicable to the province for the fiscal year,in the case of a province described in paragraph 7(b) or (c), the lesser ofthe portion, as determined in prescribed manner, of the provincial revenue equalization payment payable to the province for the fiscal year that is attributable to the federal revenue abatement relating to post-secondary education applicable to the province for the fiscal year, andthe amount, if any, by which the general equalization applicable to the province for the fiscal year, computed in accordance with section 8, exceeds the guaranteed equalization applicable to the province for the fiscal year, computed in accordance with subsection 9(1) or (2), as the case may be, andin the case of any other province, the portion, as determined in prescribed manner, of the provincial revenue equalization payment payable to the province for the fiscal year that is attributable to the federal revenue abatement relating to post-secondary education applicable to the province for the fiscal year.Adjustment payments after 1967Subject to subsection (3), the adjustment payment that may be paid to a province for a fiscal year commencing after the 1st day of April 1967 is an amount equal toin the case of a province in respect of which the amount determined under subparagraph (1)(a)(i) is greater than the amount determined under subparagraph (1)(a)(ii), the amount, as determined by the Secretary of State of Canada, that is equal to fifty per cent of the operating expenditures for post-secondary education in the province in the fiscal year;in the case of any other province, the product obtained by multiplyingthe amount determined for the immediately preceding fiscal year under paragraph (1)(a) if such year commenced on the 1st day of April 1967, or under this paragraph if such year commenced after the 1st day of April 1967,bythe quotient derived by dividingthe aggregate of the amounts, as determined by the Secretary of State of Canada, of the operating expenditures for post-secondary education in all of the provinces in the fiscal year,bythe aggregate of the amounts, as determined by the Secretary of State of Canada, of the operating expenditures for post-secondary education in all of the provinces in the immediately preceding fiscal year,minusthe aggregate ofthe federal revenue abatement relating to post-secondary education applicable to the province for the fiscal year,in the case of a province described in paragraph 7(b) or (c), the lesser ofthe portion determined in the manner described in clause (1)(b)(ii)(A) for the fiscal year, andthe amount, if any, determined in the manner described in clause (1)(b)(ii)(B) for the fiscal year, andin the case of any other province, the amount determined in the manner described in subparagraph (1)(b)(iii) for the fiscal year.Alteration of adjustment paymentsWhere the adjustment payment that may be paid to a province, other than a province described in paragraph (2)(a), for a fiscal year commencing after the 1st day of April 1967 is less thanthe amount, as determined by the Secretary of State of Canada, equal to fifty per cent of the operating expenditures for post-secondary education in the province in the fiscal yearminusthe aggregate determined in the manner described in paragraph (2)(c) for the fiscal year,the adjustment payment that may be paid to the province for the fiscal year shall be an amount equal to the amount referred to in paragraph (a) minus the aggregate referred to in paragraph (b), and in computing the adjustment payment that may be paid to the province for any subsequent fiscal year the province shall be deemed to be a province described in paragraph (2)(a).1966-67, c. 89, s. 13
Operating expendituresSubject to subsections (2) and (3), the operating expenditures for post-secondary education in a province in a fiscal year are the aggregate of the operating expenditures incurred for post-secondary education by or in respect of each educational institution in the province during the financial year of the institution related to the fiscal year, but do not includeany amount expended in respect of student financial aid;any amount expended as or on account of the capital cost of land, buildings, physical plant, facilities or equipment, except as otherwise proviced by regulation;any amount expended as or on account of interest;any amount expended in payment of a capital debt;any provision for depreciation on buildings, physical plant, facilities or equipment;any amount expended in respect of a prescribed ancillary enterprise undertaken or operated by an educational institution; andsuch portion of any amount expended as or on account of rent on land, buildings, physical plant, facilities or equipment as may be prescribed.IdemIn determining the operating expenditures incurred for post-secondary education by or in respect of an educational institution during a financial year of the institution, there shall be deducted from the amount thereof otherwise determinedany amount received by the institution in the year for assisted, sponsored or contract research; andany amount received by the institution in the year from Her Majesty in right of Canada or any agent thereof or from the Canada Council;except as otherwise provided by regulation.IdemIn determining the operating expenditures for post-secondary education in a province in a fiscal year, there shall be deducted from the amount thereof otherwise determined any amount paid to the province in the year by Her Majesty in right of Canada or any agent thereof, otherwise than pursuant to this Act, that is prescribed for purposes of this subsection to be an amount paid in respect of post-secondary education.1966-67, c. 89, s. 14
Federal revenue abatementThe federal revenue abatement relating to post-secondary education applicable to a province for a fiscal year is the amount of the revenue loss sustained by Canada in respect of the fiscal year, by virtue of certain deductions permitted by Part I of the Income Tax Act in computing income taxes payable for a taxation year ending in the fiscal year, calculated as the aggregate ofthe amount, as determined by the Minister, that would be derived from a taxon the incomes (other than incomes from businesses) of individuals resident in the province on the last day of that taxation year, within the meaning of the Income Tax Act,on the incomes (other than incomes from businesses) earned in the province in that taxation year by individuals not resident in Canada at any time during that taxation year, within the meaning of the Income Tax Act, andon the incomes from businesses earned in the province in that taxation year by individuals, within the meaning of the Income Tax Act,equal to four one-hundredths of the tax otherwise payable, within the meaning of section 33 of the Income Tax Act, on those incomes; andthe amount, as determined by the Minister, that would be derived from a tax on the income earned in the province by each corporation (other than a non-resident owned investment corporation as defined in the Income Tax Act or a corporation specified in Schedule D to the Financial Administration Act that is an agent of Her Majesty in right of Canada) that maintained a permanent establishment in the province at any time during its taxation year, for the purposes of the Income Tax Act, ending in the calendar year that ends in the fiscal year, at the rate of one per cent of its taxable income earned in the province in that taxation year, such tax to be computed as if imposed under the Income Tax Act and regulations thereunder.R.S.C. 1970, c. F-6, s. 15; 1970-71-72, c. 43, s. 3
Determination of operating expendituresIn determining the operating expenditures for post-secondary education in a province in a fiscal year, the Secretary of State of Canada shall have recourse to and be guided byany provincial return of operating expenditures submitted to him for the fiscal year;any information contained in a report made to him by the Minister of Supply and Services in connection with such operating expenditures; andsuch additional information as he may consider appropriate.Provincial returnFor the purposes of this section a provincial return of operating expenditures for a fiscal year is a statistical return, in prescribed form, relating to the operating expenditures for post-secondary education in the province in the fiscal year,that has been signed by the Deputy Minister of Education of the province or such other provincial officer as may be designated by the Lieutenant Governor in Council for the purpose; andthat has been certified by the provincial auditor as having been examined by him, and, to the best of his knowledge and belief,as accurately setting forth the operating expenditures for post-secondary education in the province in the fiscal year, calculated in accordance with the requirements of this Act and the regulations, andas being based onfinancial returns for the fiscal year in respect of each educational institution in the province that is not a secondary institution, anda financial report for the fiscal year in respect of all secondary institutions in the province.Financial returns and reportFor the purposes of subsection (2)a financial return for a fiscal year in respect of an educational institution that is not a secondary institution is a statement relating to the operating expenditures incurred for post-secondary education by that institution during its financial year related to the fiscal year, that has been certified by an independent auditor as having been examined by him, and, to the best of his knowledge and belief, as accurately setting forth the operating expenditures incurred for post-secondary education by that institution during its financial year, calculated in accordance with the requirements of this Act and the regulations; anda financial report for a fiscal year in respect of all secondary institutions in a province is a statement setting forth the operating expenditures incurred for post-secondary education by or in respect of all such institutions during their financial years related to the fiscal year, that has been signed by the Deputy Minister of Education of the province or such other provincial officer as may be designated by the Lieutenant Governor in Council for the purpose.DefinitionsIn this sectionindependent auditor means an auditor who is a member in good standing of an institution or association of accountants incorporated by or under the authority of the legislature of a province but who is not, except as otherwise provided by regulation, the same person or a member of the same firm or office of auditors as, or employed by the same employer as, the provincial auditor; (vérificateur indépendant)provincial auditor means such person as is charged by law with the audit of the accounts of a province; (vérificateur provincial)secondary institution, in respect of a province, means an institution in that province that offers at a post-secondary level only prescribed programs of study. (établissement secondaire)1966-67, c. 89, s. 16; 1968-69, c. 28, s. 105
Failure to file returnWhere a provincial return of operating expenditures for a fiscal year as described in subsection 16(2) has not been submitted to the Secretary of State of Canada,in the case of the fiscal year commencing on the 1st day of April 1967, within twelve months after the end of the fiscal year, andin the case of any subsequent fiscal year, within nine months after the end of the fiscal year,the Secretary of State of Canada, in determining the operating expenditures for post-secondary education in the province in the fiscal year, shall have recourse to and be guided by such information available to him as he considers appropriate, but in no such case shall the amount determined by the Secretary of State of Canada to be equal to fifty per cent of the operating expenditures for post-secondary education in the province in the fiscal year be less than the product obtained by multiplying $15 by the population of the province for the calendar year ending in the fiscal year.1966-67, c. 89, s. 17
Report of Minister of Supply and ServicesThe Minister of Supply and Services may, after consultation with the appropriate provincial authority,examine any financial return for a fiscal year in respect of an educational institution, as described in subsection 16(3), andrequest and receive from the independent auditor who certified any financial return for a fiscal year in respect of an educational institution, as described in subsection 16(3), such information, reports and explanations as he deems necessary in order to satisfy himself as to the method and procedure employed by such auditor in determining the operating expenditures incurred for post-secondary education by that institution during its financial year related to the fiscal year,and shall make such report to the Secretary of State of Canada in respect thereof as he considers appropriate.1966-67, c. 89, s. 18; 1968-69, c. 28, s. 105
C.R.F.The amounts authorized to be paid by section 12 shall be paid out of the Consolidated Revenue Fund at such times and in such manner as may be prescribed.1966-67, c. 89, s. 19
GeneralTax Collection Agreements
Tax collection agreementsWhere a province imposes taxes on the income of individuals or corporations or both, 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 the province pursuant to which the Government of Canada will collect the provincial taxes on behalf of the province and will make payments to the province in respect of the taxes so collected, in accordance with such terms and conditions as the agreement prescribes.Amendments to agreementsThe Minister, with the approval of the Governor in Council, may, on behalf of the Government of Canada, enter into an agreement amending the terms and conditions of an agreement entered into pursuant to subsection (1).Application of requirements of provincial law to certain personsWhere the law of a province that imposes a tax on income as described in subsection (1) contains provisions requiring every person making a payment of a specified kind to another person to deduct or withhold therefrom an amount and to remit that amount on account of such tax, effect may be given to those provisions, in accordance with the regulations, in relation to persons to whom such payments are made out of the Consolidated Revenue Fund or by an agent of Her Majesty in right of Canada.1966-67, c. 89, s. 20
Agreements under former ActWhere an agreement was entered into pursuant to subsection 6(1) or (2) of the former Act, the agreement shall be deemed to have been entered into pursuant to subsection 20(1).1966-67, c. 89, s. 21
Advance payments under agreementsWhere a province has entered into a tax collection agreement, the Minister, in accordance with the regulations, may make advance payments to the province out of the Consolidated Revenue Fund on account of any amount that may become payable to the province pursuant to the agreement.1966-67, c. 89, s. 22
Regulations
RegulationsThe Governor in Council may make regulationsdefining, for the purposes of this Act,the expression revenue base in subsection 8(2),the expressions in paragraphs (a) to (p) of the definition revenue source in subsection 8(2),the expressions junior matriculation and post-secondary level in subsection 11(1),the expression assisted, sponsored or contract research, andthe expression operating expenditures incurred for post-secondary education by or in respect of an educational institution or secondary institution;respecting the payment to a province of advances on account of any amount that may become payable to the province pursuant to this Act or a tax collection agreement, the adjustment of other payments by reason of such advances and the recovery of overpayments;prescribing the time and manner of making any payment under this Act or a tax collection agreement;prescribing the accounts to be kept and their management;respecting the determination of any matter that under this Act is to be determined by the Minister or the Secretary of State of Canada;respecting any matter that by this Act is to be defined, provided or prescribed by, or done in accordance with, the regulations; andgenerally for carrying into effect the purposes and provisions of this Act.1966-67, c. 89, s. 23