Federal-Provincial Fiscal Arrangements Act

Marginal note:Interpretation

• 3.9 (1) The following definitions apply in this section and in sections 3.6 to 3.8.

  average annual per capita yield

  rendement annual moyen par habitant

  average annual per capita yield means, in respect of a province for a revenue source for a fiscal year, the amount determined by the formula

  (A + B + C) / (D + E + F)

  where

  A

  is the yield for that revenue source for the fiscal year that is one year prior to that fiscal year;

  B

  is the yield for that revenue source for the fiscal year that is two years prior to that fiscal year;

  C

  is the yield for that revenue source for the fiscal year that is three years prior to that fiscal year;

  D

  is the population of that province for the fiscal year that is one year prior to that fiscal year;

  E

  is the population of that province for the fiscal year that is two years prior to that fiscal year; and

  F

  is the population of that province for the fiscal year that is three years prior to that fiscal year.

  average annual population

  population annuelle moyenne

  average annual population means, in respect of a province for a fiscal year, the amount determined by the formula

  (A + B + C) / 3

  where

  A

  is the population of that province for the fiscal year that is one year prior to that fiscal year;

  B

  is the population of that province for the fiscal year that is two years prior to that fiscal year; and

  C

  is the population of that province for the fiscal year that is three years prior to that fiscal year.

  yield

  rendement

  yield means, in respect of a province for a revenue source for a fiscal year, an amount equal to the product obtained by multiplying the national average rate of tax for that revenue source for that fiscal year by that province’s revenue base in respect of that revenue source for that fiscal year. (rendement)

• Marginal note:Terminology

  (2) For the purposes of this section and sections 3.6 to 3.8, the following expressions have the same meaning as in subsection 4(2) of this Act as it read on March 13, 2004:

  • (a) national average rate of tax;

  • (b) revenue base;

  • (c) revenue source; and

  • (d) revenue to be equalized.

• Marginal note:Deduction in computing revenue to be equalized

  (3) In computing the revenue to be equalized from personal incomes taxes — referred to in paragraph (a) of the definition revenue source referred to in subsection (2) — 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

  (4) 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 referred to in subsection (2) 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 referred to in subsection (2) 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

  (5) Subject to subsection (6), 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 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 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 that fiscal year.

• Marginal note:Election

  (6) In order for subsection (5) 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 referred to in subsection (2), 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:Effect of election under subsection (6)

  (7) Despite any provision of the Canada-Newfoundland Atlantic Accord Implementation Act, if Newfoundland and Labrador makes the election described in subsection (6) 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.