Bill C-65

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	1st Session, 36th Parliament, 46-47-48 Elizabeth II, 1997-98-99
	The House of Commons of Canada
	BILL C-65
	An Act to amend the Federal-Provincial Fiscal Arrangements Act
R.S., c. F-8; R.S., cc. 22, 39, 44 (1st Supp.), cc. 7, 15, 26, 28 (2nd Supp.), cc. 9, 11, 31 (3rd Supp.), cc. 7, 33, 35, 46 (4th Supp.); 1990, c. 39; 1991, cc. 9, 10, 38, 51; 1992, cc. 1, 10; 1993, cc. 28, 34; 1994, c. 2; 1995, cc. 17, 24, 28, 29; 1996, cc. 8, 11, 18; 1997, c. 10; 1998, cc. 10, 19, 21	Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
1994, c. 2, s. 1	*1. Section 3 of the Federal-Provincial Fiscal Arrangements Act* is replaced by the following:**
Fiscal equalization payments	3. Subject to this Act, the Minister may pay to a province for each fiscal year in the period beginning on April 1, 1999 and ending on March 31, 2004 a fiscal equalization payment not exceeding the amount computed in accordance with section 4.
	2. (1) Section 4 of the Act is amended by adding the following after subsection (1):
Payment for fiscal year 1999-2000	(1.1) The fiscal equalization payment that may be paid to a province for the fiscal year beginning on April 1, 1999 is the amount, as determined by the Minister, equal to the greater of
	(a) the aggregate of
	(i) 20 per cent of the product obtained under paragraph (1)(a), and
	(ii) 80 per cent of the amount that would have been that product had this Act and the Federal Provincial Fiscal Arrangements Regulations, as this Act and those Regulations read on March 31, 1999, applied, with such modifications as the circumstances required, in respect of the fiscal year beginning on April 1, 1999, and
	(b) zero.
Payment for fiscal year 2000-2001	(1.2) The fiscal equalization payment that may be paid to a province for the fiscal year beginning on April 1, 2000 is the amount, as determined by the Minister, equal to the greater of
	(a) the aggregate of
	(i) 40 per cent of the product obtained under paragraph (1)(a), and
	(ii) 60 per cent of the amount that would have been that product had this Act and the Federal Provincial Fiscal Arrangements Regulations, as this Act and those Regulations read on March 31, 1999, applied, with such modifications as the circumstances required, in respect of the fiscal year beginning on April 1, 2000, and
	(b) zero.
Payment for fiscal year 2001-2002	(1.3) The fiscal equalization payment that may be paid to a province for the fiscal year beginning on April 1, 2001 is the amount, as determined by the Minister, equal to the greater of
	(a) the aggregate of
	(i) 60 per cent of the product obtained under paragraph (1)(a), and
	(ii) 40 per cent of the amount that would have been that product had this Act and the Federal Provincial Fiscal Arrangements Regulations, as this Act and those Regulations read on March 31, 1999, applied, with such modifications as the circumstances required, in respect of the fiscal year beginning on April 1, 2001, and
	(b) zero.
Payment for fiscal year 2002-2003	(1.4) The fiscal equalization payment that may be paid to a province for the fiscal year beginning on April 1, 2002 is the amount, as determined by the Minister, equal to the greater of
	(a) the aggregate of
	(i) 80 per cent of the product obtained under paragraph (1)(a), and
	(ii) 20 per cent of the amount that would have been that product had this Act and the Federal Provincial Fiscal Arrangements Regulations, as this Act and those Regulations read on March 31, 1999, applied, with such modifications as the circumstances required, in respect of the fiscal year beginning on April 1, 2002, and
	(b) zero.
1992, c. 10, s. 3(2)	(2) The definitions ``revenue source'' and ``revenue to be equalized'' in subsection 4(2) of the Act are replaced by the following:
``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,
	(r) heavy third tier oil,
	(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;
``revenue to be equalized'' « revenu sujet à péréqua- tion »	``revenue to be equalized'' from a revenue source for a province for a fiscal year means the revenue, as determined by the Minister, derived by the province for the fiscal year from that revenue source.
	(3) Subsection 4(3) of the Act is replaced by the following:
Variation of definition ``revenue source''	(3) A description of a revenue source as set out in the definition ``revenue source'' in subsection (2) may, by regulation, be revised or altered in one or more of the following ways:
	(a) so as to constitute two or more separate revenue sources;
	(b) in a manner that results in the inclusion of all or any part of it in another description of a revenue source set out in that definition; and
	(c) in a manner that results in the exclusion of any part of it from that definition.
R.S., c. 11 (3rd Supp.), s. 3(3); 1994, c. 2, s. 2(1)	(4) Subsections 4(5) to (7) of the Act are replaced by the following:
Municipal property taxes and miscellane- ous revenues and taxes	(5) For the purpose of determining the revenue to be equalized derived by a province for a fiscal year,
	(a) in the case of the part of the revenue source described in paragraph (z) of the definition ``revenue source'' 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 the province that has power to levy property taxes, for the financial year of each such local authority ending in the fiscal year, and
	(b) in the case of the part of the revenue source described in paragraph (z.4) of the definition ``revenue source'' 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 the province that has power to derive those revenues for the financial year of each such local authority ending in the fiscal year
	is deemed to be revenue derived by the prov ince from those revenue sources for that fiscal year.
Minimum payment to province in certain cases	(6) Notwithstanding subsections (1) to (5) but subject to subsection (9), the fiscal equalization payment that may be paid to a province in respect of each fiscal year in the period beginning on April 1, 1999 and ending on March 31, 2004, if the province received a fiscal equalization payment in respect of the immediately preceding fiscal year, shall not be less than the greater of
	(a) an amount equal to what the fiscal equalization payment in respect of the immediately preceding fiscal year would be if this subsection were disregarded, minus the threshold amount for the current fiscal year, and
	(b) zero.
Interpreta- tion	(7) The definitions in this subsection apply in this subsection and in subsection (6).
``national per capita equalization standard'' « norme de péréquation nationale par tête »	``national per capita equalization standard'' means the average per capita yield of the provinces of Ontario, Quebec, British Columbia, Manitoba and Saskatchewan for all revenue sources.
``threshold amount'' « montant déterminant »	``threshold amount'' for a fiscal year, in relation to a province, is the product obtained by multiplying
	(a) 1.6 per cent of the national per capita equalization standard for that fiscal year
	by
	(b) the population of the province for either that fiscal year or the immediately preceding fiscal year, whichever is less.
1992, c. 10, s. 3(4); 1994, c. 2, s. 2(2)	(5) Paragraphs 4(9)(a) and (b) of the Act and the portion of subsection 4(9) of the Act between those paragraphs are replaced by the following:
	(a) the total amount of the fiscal equalization payments to all provinces as determined under this Part for a fiscal year commencing with the fiscal year that begins on April 1, 1999
	exceeds
	(b) either
	(i) in the case of the fiscal year that begins on April 1, 1999, ten billion dollars, or
	(ii) in the case of a subsequent fiscal year, the amount that would result if the amount of ten billion dollars were changed by the percentage change in Canada's gross domestic product, as determined by the Chief Statistician of Canada in the prescribed manner, from the calendar year ending on December 31, 1999 to the calendar year ending in the fiscal year,


1994, c. 2, s. 2(3)	(6) Subsection 4(11) of the Act is replaced by the following:
Election	(11) In order for subsection (10) to apply in respect of the offshore minerals revenue included in the description set out in paragraph (z.5) of the definition ``revenue source'' in subsection (2) as revised or altered in accordance with subsection (3), a province that is eligible for a fiscal equalization offset payment in the fiscal year under the Canada - Nova Scotia Offshore Petroleum Resources Accord Implementation Act, or the Canada - Newfoundland Atlantic Accord Implementation Act, in respect of a fiscal year beginning on or after April 1, 1993 shall make an election, in the prescribed manner, before the end of the calendar year ending in the fiscal year.
1994, c. 2, s. 2(3)	(7) Subsection 4(13) of the Act is repealed.
R.S., c. 11 (3rd Supp.), s. 5(2)	3. (1) Paragraph 6(1)(b) of the Act is replaced by the following:
	(b) the revenue subject to stabilization of the province for the fiscal year, adjusted in prescribed manner to offset the amount, as determined by the Minister, of any change in the revenue subject to stabilization of the province for the fiscal year resulting from changes made by the province in the rates or in the structures of provincial taxes or other modes of raising the revenue of the province referred to in paragraphs (a) to (y) and (z.1) to (z.3) of the definition ``revenue source'' in subsection 4(2) from the rates or structures in effect in the immediately preceding fiscal year.
R.S., c. 11 (3rd Supp.), s. 5(4)	(2) Paragraph 6(2)(a) of the Act is replaced by the following:

Bill C-65

BILL C-65