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.

  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. (taux d’imposition national moyen)

  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. (assiette)

  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 revenues 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. (source de revenu)

  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. (revenu sujet à péréquation)

  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: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.