Bill C-76

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Royal Assent

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	PART V
	CANADA HEALTH AND SOCIAL TRANSFER
	Contributions
To province for fiscal year	13. (1) Subject to this Part, a Canada Health and Social Transfer may be provided to a province for a fiscal year for the purposes of
	(a) establishing interim arrangements to finance social programs in a manner that will increase provincial flexibility;
	(b) maintaining the national criteria and conditions in the Canada Health Act, including those respecting public administration, comprehensiveness, universality, portability and accessibility, and the provisions relating to extra-billing and user charges;
	(c) maintaining the national standard, set out in section 19, that no period of minimum residency be required or allowed with respect to social assistance; and
	(d) promoting any shared principles and objectives that are developed, pursuant to subsection (3), with respect to the operation of social programs, other than a program for the purpose referred to in paragraph (b).
What the Canada Health and Social Transfer consists of	(2) The Canada Health and Social Transfer shall consist of
	(a) a federal income tax reduction in favour of the provinces that would enable the provinces to impose their own tax measures without a net increase in taxation; and
	(b) a cash contribution not exceeding the amount computed in accordance with section 14.
Discussion with provinces	(3) The Minister of Human Resources Development shall invite representatives of all the provinces to consult and work together to develop, through mutual consent, a set of shared principles and objectives for the other social programs referred to in paragraph (1)(d) that could underlie the Canada Health and Social Transfer.
Cash contribution	14. The cash contribution in respect of the Canada Health and Social Transfer that may be provided to a province for a fiscal year is an amount equal to the amount, if any, by which the total entitlement in respect of the Canada Health and Social Transfer applicable to the province for that fiscal year exceeds the total equalized tax transfer applicable to the province for that fiscal year.
Total entitlement	15. The total entitlement in respect of the Canada Health and Social Transfer applicable to a province for the fiscal year beginning on April 1, 1996 is the amount, as determined by the Minister, equal to the product obtained by multiplying
	(a) 26.9 billion dollars
	by
	(b) the quotient obtained by dividing
	(i) that province's total entitlements in respect of the sum of the amounts established under subsections 15(1) and (2) and sections 23 and 23.1, as they read on March 31, 1996, in respect of the fiscal year beginning on April 1, 1995 and the contributions payable under the Canada Assistance Plan in respect of the fiscal year beginning on April 1, 1994
	by
	(ii) the aggregate of the total entitlements referred to in subparagraph (i) of all the provinces.
	49. (1) The portion of subsection 16(1) of the Act before paragraph (b) is replaced by the following:
Total equalized tax transfer	16. (1) The total equalized tax transfer applicable to a province for a fiscal year is the aggregate of
	(a) the total amount, as determined by the Minister, for the fiscal year represented by the federal income tax reduction in the province in respect of the Canada Health and Social Transfer for the fiscal year, and
1992, c. 10, s. 6	(2) The portion of subparagraph 16(1)(b)(ii) of the Act before clause (A) is replaced by the following:
	(ii) the amount of equalization that would be paid to the province in respect of the federal income tax reduction in all the provinces in respect of the Canada Health and Social Transfer for the fiscal year, if the method of calculation of fiscal equalization payments as set out in Part I, excluding subsections 4(6) and (9), were to be applied to the value of the income tax reduction in all the provinces in respect of the Canada Health and Social Transfer for the fiscal year, except that
	(3) The portion of subsection 16(2) of the Act before paragraph (a) is replaced by the following:
Federal income tax reduction	(2) For the purposes of subsection (1), the amount represented by the federal income tax reduction in a province in respect of the Canada Health and Social Transfer for a fiscal year is an amount equal to the aggregate of
	(4) Subsections 16(3) and (4) of the Act are repealed.
R.S., c. 26 (2nd Supp.), ss. 2, 3, 4; R.S., c. 11 (3rd Supp.), ss. 8, 9; 1991, c. 9, s. 5, c. 51, ss. 2, 3	50. Sections 18 to 23.1 of the Act are replaced by the following:
Payments by Minister	17. (1) Any amount payable under this Part shall be paid by the Minister out of the Consolidated Revenue Fund at such times and in such manner as may be prescribed.
Reduction or withholding	(2) The cash contribution that may be provided to a province under this Part shall be reduced or withheld for the purposes of giving effect to
	(a) any order made by the Governor in Council in respect of the province under section 15 or 16 of the Canada Health Act or section 21 or 22 of this Act; or
	(b) any deduction from the cash contribution pursuant to section 20 of the Canada Health Act.
Definitions	18. In sections 19 to 23,
``Minister'' « ministre »	``Minister'' means the Minister of Human Resources Development;
``social assistance'' « assistance sociale »	``social assistance'' means aid in any form to or in respect of a person in need.
Criteria for eligibility	19. (1) In order that a province may qualify for a full cash contribution referred to in section 14 for a fiscal year, the laws of the province must not
	(a) require or allow a period of residence in the province or Canada to be set as a condition of eligibility for social assistance or for the receipt or continued receipt thereof; or
	(b) make or allow the amount, form or manner of social assistance to be contingent upon a period of such residence.
Exception	(2) The criteria in subsection (1) are not contravened by a requirement of a health insurance plan of a province of a minimum period of residence in the province or waiting period that does not contravene paragraph 11(1)(a) of the Canada Health Act.
Referral to Governor in Council	20. (1) Subject to subsection (3), where the Minister, after consultation in accordance with subsection (2) with the minister responsible for social assistance in a province, is of the opinion that the province does not or has ceased to comply with section 19 and the province has not given an undertaking satisfactory to the Minister to remedy the non-compliance within a period that the Minister considers reasonable, the Minister shall refer the matter to the Governor in Council.
Consultation process	(2) Before referring a matter to the Governor in Council under subsection (1) in respect of a province, the Minister shall
	(a) send by registered mail to the minister responsible for social assistance in the province a notice of concern with respect to any problem foreseen;
	(b) seek any additional information available from the province with respect to the problem through bilateral discussions, and make a report to the province within ninety days after sending the notice of concern; and
	(c) if requested by the province, meet within a reasonable time to discuss the report.
Where no consultation can be achieved	(3) The Minister may act under subsection (1) without consultation if the Minister is of the opinion that a sufficient time has expired after reasonable efforts to achieve consultation were made and that consultation will not be achieved.
Order reducing or withholding contribution	21. (1) Where, on the referral of a matter under section 20, the Governor in Council is of the opinion that the province does not or has ceased to comply with section 19, the Governor in Council may, by order,
	(a) direct that any cash contribution to that province for a fiscal year be reduced, in respect of each non-compliance, by an amount that the Governor in Council considers to be appropriate, having regard to the gravity of the non-compliance; or
	(b) where the Governor in Council considers it appropriate, direct that the whole of any cash contribution to that province for a fiscal year be withheld.
Amending orders	(2) The Governor in Council may, by order, repeal or amend any order made under subsection (1) where the Governor in Council is of the opinion that the repeal or amendment is warranted in the circumstances.
Copy of order	(3) A copy of each order made under this section together with a statement of any findings on which the order was based shall be sent forthwith by registered mail to the government of the province concerned and the Minister shall have the order and statement laid before each House of Parliament on any of the first fifteen days on which that House is sitting after the order is made.
Commenceme nt of order	(4) An order made under subsection (1) shall not come into force earlier than thirty days after a copy of the order has been sent to the government of the province concerned under subsection (3).
Reimposition of reductions or withholdings	22. In the case of a continuing failure to comply with section 19, any reduction or withholding under section 21 of a cash contribution to a province for a fiscal year shall be reimposed for each succeeding fiscal year as long as the Minister is satisfied, after consultation with the minister responsible for social assistance in the province, that the non-compliance is continuing.
When reduction or withholding imposed	23. Any reduction or withholding under section 21 or 22 of a cash contribution may be imposed in the fiscal year in which the non-compliance that gave rise to the reduction or withholding occurred or in the following fiscal year.
Reports by Ministers	23.1 The Minister of Finance, the Minister of Health and the Minister of Human Resources Development may, together or individually, prepare a report on the administration and operation of this Part and have the report laid before each House of Parliament.
1991, c. 51, s. 4	51. Subsection 23.2(2) of the Act is replaced by the following:
Additional withholding or reduction	(2) Where the Governor in Council makes an order under subsection 15(1) of the Canada Health Act or subsection 21(1) of this Act directing, in respect of a fiscal year, the withholding of an amount that, but for this section, would exceed the amount that could be withheld under that subsection, the Governor in Council may, in that order, deem any federal payment to the province to be, notwithstanding any provision of the Act, arrangement or agreement under which the federal payment is made, a cash contribution to that province for that fiscal year for the purpose of a reduction by, or a withholding of, the excess amount under either of those subsections, under section 16 or 17 of the Canada Health Act or under section 22 or 23 of this Act.
	52. Section 24 of the Act and the heading before it are repealed.
	53. Section 25 of the Act is replaced by the following:
Social programs	25. For the purposes of this Part, references to social programs include programs in respect of health, post-secondary education, social assistance and social services.
R.S., c. 11 (3rd Supp.), s. 10	54. The definitions ``authorizing instrument'', ``established programs'', ``special welfare program'' and ``standing program'' in section 26 of the Act are repealed.
	55. Sections 27 to 29 of the Act are replaced by the following:
Increase of individual deduction under Income Tax Act	27. (1) Where an agreement has, at any time before January 1, 1977, been entered into with a province under section 3 of the Established Programs (Interim Arrangements) Act, chapter E-8 of the Revised Statutes of Canada, 1970, the tax abatement applicable for the 1977 and subsequent taxation years shall be increased with respect to the income of an individual earned in any such taxation year in that province by adding to the percentage figure of the tax abatement both of the unit numbers set out in subsections (2) and (3).
Tax abatement units	(2) There shall be added 8.5 units where, in a province for a fiscal year, the Minister determines the increase under subsection (1) on the basis of the aggregate of
	(a) seventy-five per cent of the additional tax abatement applicable in respect of the province for the calendar year ending in the fiscal year, and
	(b) twenty-five per cent of the additional tax abatement applicable in respect of the province for the calendar year beginning in the fiscal year.
Tax abatement units	(3) There shall be added 5 units where, in a province for a fiscal year, the Minister determines the increase under subsection (1) on the basis of the calendar year ending in the fiscal year.
Adjustments	28. Where the amount of the additional tax abatement applicable in respect of a province in a fiscal year, as determined by the Minister pursuant to section 27,
	(a) is less than the amount, as determined by the Minister, that would have been paid by the Government of Canada under Part V to the province for the fiscal year, the Minister may cause to be paid to the province an amount equal to the amount of the difference; or
	(b) is greater than the amount, as determined by the Minister, that would have been paid by the Government of Canada under Part V to the province for a fiscal year, an amount equal to the amount of the difference shall be recovered out of any moneys payable to the province under this Act or may otherwise be recovered as a debt due to the Government of Canada by the province.
Responsibility of Government of Canada	29. The Government of Canada, in respect of each fiscal year beginning on or after April 1, 1977, by virtue of this Act ceases to be under any obligation, except as provided in this Part, to make any contribution or payment to a province for financing social programs as provided under Part V.
Coming into force	56. (1) Subject to subsection (2), sections 44 to 55 come into force on April 1, 1996.
Deemed coming into force	(2) Subsections 47(1) and (3) are deemed to have come into force on April 1, 1995.

Bill C-76

PART V

CANADA HEALTH AND SOCIAL TRANSFER

Contributions