Budget and Economic Statement Implementation Act, 2007 (S.C. 2007, c. 35)
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Assented to 2007-12-14
PART 11FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS
R.S., c. F-8; 1995, c. 17, s. 45(1)Amendments to the Federal-Provincial Fiscal Arrangements Act
164. (1) Subsection 3.9(1) of the Act is amended by adding the following in alphabetical order:
“average annual revenue base”
« assiette annuelle moyenne »
“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.
“national average rate of tax”
« taux d’imposition national moyen »
“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.
“revenue base”
« assiette »
“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.
“revenue source”
« source de revenu »
“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;
(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 rev-enues 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 sources referred to in this definition that are shared by Canada with the provinces.
“revenue to be equalized”
« revenu sujet à péréquation »
“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.
Marginal note:2007, c. 29, s. 62
(2) Subsections 3.9(2) to (7) of the Act are replaced by the following:
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.
Marginal note:Adjustment of revenue to be equalized
(4) Subject to subsection (5), if, for a fiscal year, a province would be entitled to receive a fiscal equalization payment under section 3.6, computed as if that section applied to that province, and if that province has seventy per cent or more of the average annual revenue base for all of the provinces in that fiscal year in respect of a revenue source, the revenue to be equalized from that revenue source for all of the provinces for the purpose of determining the average annual per capita yield for each province for that revenue source for that fiscal year is an amount equal to seventy per cent of the revenue to be equalized as otherwise determined from that revenue source for all of the provinces for each of the three immediately preceding fiscal years.
Marginal note:Election
(5) In order for subsection (4) to apply to Nova Scotia or to Newfoundland and Labrador in respect of the revenue source referred to in paragraph (z.5) of the definition “revenue source” in subsection (1), Nova Scotia or Newfoundland and Labrador, as the case may be, shall make an election at the prescribed time and in the prescribed manner.
Marginal note:Validity of election
(6) An election under subsection (5) by Nova Scotia or Newfoundland and Labrador in respect of a fiscal year is not valid if it has made an election under subsection 3.7(3) for that fiscal year or any previous fiscal year or if it makes an election under subsection 3.7(3) for that fiscal year.
Marginal note:Effect of election under subsection (5)
(7) Despite any provision of the Canada-Newfoundland Atlantic Accord Implementation Act, if Newfoundland and Labrador makes the election described in subsection (5) for a fiscal year, the fiscal equalization offset payment that may otherwise be payable to the province under that Act is, for that fiscal year, zero.
Marginal note:2007, c. 29, s. 62
165. Sections 3.91 to 3.93 of the Act are replaced by the following:
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 to 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:Deeming
(2) Subsection (1) applies to Nova Scotia and Newfoundland and Labrador as if sections 3.2 to 3.4 applied to each of those provinces.
Marginal note:Time of calculation — s. 3.6
(3) At a time determined by the Minister, no later than three months before the end of a fiscal year, the Minister shall calculate
(a) the fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador under section 3.6 for that fiscal year on the basis that both make an election under subsection 3.9(5) for that fiscal year;
(b) the fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador under section 3.6 for that fiscal year on the basis that only Nova Scotia makes an election under subsection 3.9(5) for that fiscal year;
(c) the fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador under section 3.6 for that fiscal year on the basis that only Newfoundland and Labrador makes an election under subsection 3.9(5) for that fiscal year; and
(d) the fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador under section 3.6 for that fiscal year on the basis that neither makes an election under subsection 3.9(5) for that fiscal year.
Marginal note:Cessation
(4) Subsection (3) ceases to apply in respect of Nova Scotia or Newfoundland and Labrador if section 3.6 ceases to apply in respect of that province.
Marginal note:Time of calculation — s. 3.72
(5) 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.
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.
166. The Act is amended by adding the following after section 3.95:
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 Canada-Newfoundland Atlantic Accord Implementation Act and 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 31 of that fiscal year.
Marginal note:2007, c. 29, s. 62
167. Sections 4.4 and 4.5 of the Act are replaced by the following:
Marginal note:Underpayment
4.4 If the Minister determines that the Minister has underpaid any amounts payable to a territory under this Part, the Minister may, within the prescribed time and in the prescribed manner, pay that territory an amount equal to the underpayment.
Marginal note:Overpayment
4.5 If the Minister determines that the Minister has overpaid any amounts paid to a territory 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 territory; or
(b) from that territory as a debt due to Her Majesty in right of Canada.
Marginal note:1997, c. 10, s. 264(1); 2007, c. 29, s. 73
168. Paragraphs 40(a.2) to (b) of the Act are replaced by the following:
(a.2) providing for the provincial or territo-rial revenues that are derived from, or are deemed to be derived from, the revenue sources referred to in each paragraph of the definition “revenue source” in subsections 3.5(1), 3.9(1) and 4(1);
(a.3) amending the definition “revenue source” in subsection 3.9(1) by dividing a revenue source set out in a paragraph of that definition into two or more separate revenue sources;
(b) respecting the calculation and payment to a province of advances on account of any amount that may become payable to the province under this Act, an administration agreement, a reciprocal taxation agreement or a sales tax harmonization agreement and the adjustment, by way of reduction or set off, of other payments to the province because of those advances;
(b.1) respecting the recovery of overpayments;
2007, c. 29Amendments to the Budget Implementation Act, 2007
169. Section 78 of the Budget Implementation Act, 2007 is repealed.
170. Section 83 of the Act and the heading before it are repealed.
171. Section 84 of the Act is replaced by the following:
Marginal note:Newfoundland and Labrador
84. (1) Sections 79 and 82 come into force, or are deemed to have come into force, on April 1 of the first fiscal year in respect of which Newfoundland and Labrador makes the election under subsection 3.7(3) of the Federal-Provincial Fiscal Arrangements Act.
Marginal note:Notice
(2) The Minister of Finance shall publish in the Canada Gazette the date on which sections 79 and 82 come into force.
Marginal note:Nova Scotia
(3) Section 81 comes into force, or is deemed to have come into force, on April 1, 2008.
1987, c. 3Consequential Amendment to the Canada-Newfoundland Atlantic Accord Implementation Act
Marginal note:2004, c. 22, s. 6
172. Section 220 of the Canada-Newfoundland Atlantic Accord Implementation Act is replaced by the following:
Marginal note:Calculation
220. The fiscal equalization offset payment that is to be paid to Her Majesty in right of the Province for a fiscal year pursuant to section 219 is the amount, as determined by the Federal Minister, equal to the aggregate of
(a) the amount, if any, by which
(i) the fiscal equalization payment that would be received by Her Majesty in right of the Province for the fiscal year if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act,
is less than
(ii) where the average of the per capita fiscal capacity of the Province for the fiscal years taken into account in the calculation of the fiscal equalization payment for that fiscal year is less than or equal to 70 per cent of the average, for those fiscal years, of the national average per capita fiscal capacity, 95 per cent,
(iii) where the average of the per capita fiscal capacity of the Province for the fiscal years taken into account in the calculation of the fiscal equalization payment for that fiscal year is less than or equal to 75 per cent but greater than 70 per cent of the average, for those fiscal years, of the national average per capita fiscal capacity, 90 per cent, or
(iv) where the average of the per capita fiscal capacity of the Province for the fiscal years taken into account in the calculation of the fiscal equalization payment for that fiscal year is greater than 75 per cent of the average, for those fiscal years, of the national average per capita fiscal capacity, 85 per cent
of the aggregate of
(v) the fiscal equalization payment that would be received by Her Majesty in right of the Province for the fiscal year immediately preceding the fiscal year if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act, as if
(A) in the case where the province makes the election under subsection 3.2(2) of that Act for the fiscal year, the province made the election under subsection 3.2(2) of that Act for the fiscal year immediately preceding the fiscal year, or
(B) in the case where the province does not make the election under subsection 3.2(2) of that Act for the fiscal year, the province did not make the election under subsection 3.2(2) of that Act for the fiscal year immediately preceding the fiscal year, and
(vi) the amount computed in accordance with this paragraph for the fiscal year immediately preceding the fiscal year as this paragraph read for that fiscal year, and
(b) the phase-out portion, in respect of the fiscal year, of the amount, as determined by the Federal Minister, by which
(i) the aggregate of the fiscal equalization payment that would be received by Her Majesty in right of the Province for the fiscal year immediately preceding the fiscal year if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act, and the amount computed in accordance with paragraph (a) for the fiscal year immediately preceding the fiscal year, as that paragraph read for that fiscal year,
is greater than
(ii) the aggregate of
(A) the fiscal equalization payment that would be received by Her Majesty in right of the Province for the fiscal year if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act, as if
(I) in the case where the province makes the election under subsection 3.2(2) of that Act for the fiscal year, the province made the election under subsection 3.2(2) of that Act for the fiscal year immediately preceding the fiscal year, or
(II) in the case where the province does not make the election under subsection 3.2(2) of that Act for the fiscal year, the province did not make the election under subsection 3.2(2) of that Act for the fiscal year immediately preceding the fiscal year, and
(B) the amount computed in accordance with paragraph (a) for the fiscal year.
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