EXPLANATORY NOTE

This enactment amends Parts I and IV of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act.

Part I of the Act provides for equalization payments to the provinces. This enactment amends Part I by extending the period during which payments may be made. The period begins on April 1, 1994 and ends on March 31, 1999.

This enactment provides for relief to provinces that receive equalization payments and that would otherwise experience excessive tax backs (the expression ``excessive tax backs'' refers to large, nearly dollar for dollar, losses in equalization payments resulting from an increase in a province's revenue in respect of a particular source) in respect of certain revenue sources.

The maximum payment level (ceiling) of equalization is being increased in order to take into account the relief provided to provinces in respect of the excessive tax back problem and to take into account technical modifications to certain revenue bases.

This enactment also amends Part IV of the Act by extending, by five years, the period during which provincial tax revenue guarantee payments may be made.