Bill C-52

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AMENDMENTS IN RESPECT OF THE GOODS AND SERVICES TAX/HARMONIZED SALES TAX

R.S., c. E-15

Excise Tax Act

2000, c. 30, s. 27(1)

45. (1) The portion of subsection 167.2(1) of the Excise Tax Act before paragraph (a) is replaced by the following:

Supplies to non-resident persons of admissions to conventions

167.2 (1) If a sponsor of a convention makes a taxable supply of an admission to the convention to a non-resident person, the following shall not be included in calculating the tax payable under subsection 165(1) in respect of the supply:

(2) Subsection 167.2(2) of the Act is replaced by the following:

Supplies to non-resident exhibitors

(2) If a sponsor of a convention makes a taxable supply by way of lease, licence or similar arrangement to a non-resident person of real property that is acquired by the person exclusively for use as a site for the promotion, at the convention, of property or services supplied by, or of a business of, the person, no tax is payable under subsection 165(1) in respect of that supply to the person or in respect of any supply by the sponsor to the person of property or services that are acquired by the person for consumption or use as related convention supplies in respect of the convention.

(3) Subsections (1) and (2) apply to any supply of an admission to, and to any supply made in connection with, a convention that begins after March 2007, unless the convention begins before April 2009 and the supply is made under an agreement in writing entered into before September 25, 2006.

46. (1) Section 234 of the Act is amended by adding the following after subsection (2):

Late filing of information and adjustment for failure to file

(2.1) If a registrant is required to file prescribed information in accordance with subsection 252.1(10) or 252.4(5) in respect of an amount claimed as a deduction under subsection (2) in respect of an amount paid or credited on account of a rebate,

(a) in the case where the registrant files the information on a day (in this subsection referred to as the “filing day”) that is after the day on or before which the registrant is required to file its return under Division V for the reporting period in which the registrant claimed the deduction under subsection (2) in respect of the amount paid or credited and before the particular day that is the earlier of

(i) the day that is four years after the day on or before which the registrant was required under section 238 to file a return for the period, and

(ii) the day stipulated by the Minister in a demand to file the information,

the registrant shall, in determining the net tax for the reporting period of the registrant that includes the filing day, add an amount equal to interest, at the prescribed rate, on the amount claimed as a deduction under subsection (2) computed for the period beginning on the day on or before which the registrant was required to file the prescribed information under subsection 252.1(10) or 252.4(5) and ending on the filing day; and

(b) in the case where the registrant fails to file the information before the particular day, the registrant shall, in determining the net tax for the reporting period of the registrant that includes the particular day, add an amount equal to the total of the amount claimed as a deduction under subsection (2) and interest, at the prescribed rate, on that amount computed for the period beginning on the day on or before which the registrant was required to file the information under subsection 252.1(10) or 252.4(5) and ending on the day on or before which the registrant is required under section 238 to file a return for the reporting period of the registrant that includes the particular day.

(2) Subsection (1) applies in respect of any amount claimed as a deduction under subsection 234(2) of the Act in respect of an amount that is paid to, or credited in favour of, a person after March 2007 and that relates to a supply for which tax under Part IX of the Act becomes payable after March 2007.

1993, c. 27, s. 107(1); 1997, c. 10, s. 58(1)

47. (1) The portion of subsection 252(1) of the Act before paragraph (c) is replaced by the following:

Non-resident rebate in respect of exported goods

252. (1) If a non-resident person is the recipient of a supply of tangible personal property acquired by the person for use primarily outside Canada, the person is not a consumer of the property, the property is not

(a) excisable goods, or

(2) Subsection (1) applies to any supply of property in respect of which tax under Part IX of the Act becomes payable after March 2007.

1997, c. 10, s. 59(2); 2000, c. 30, s. 68(2)

48. (1) Subsection 252.1(2) of the Act is replaced by the following:

Accommodation rebate for tour packages

(2) If

(a) a non-resident person is the recipient of a supply made by a registrant of a tour package that includes short-term accommodation or camping accommodation,

(b) the tour package is acquired by the person otherwise than for supply in the ordinary course of a business of the person of making such supplies, and

the Minister shall, subject to subsection (8) and section 252.2, pay a rebate to the person equal to the tax paid by the person under subsection 165(1) in respect of the accommodation.

1993, c. 27, s. 107(1); 1997, c. 10, s. 59(3)

(2) The portion of subsection 252.1(3) of the Act after paragraph (a) is replaced by the following:

(b) if the supply is a supply of a tour package, the tour package is acquired by the person for supply in the ordinary course of a business of the person of making supplies of tour packages,

(b.1) if the supply is a supply of accommodation, the accommodation is acquired by the person in the ordinary course of a business of the person for the purpose of making a supply (in this subsection referred to as the “subsequent supply”) of a tour package that includes the accommodation,

(c) a supply of the tour package or the subsequent supply is made to another non-resident person and payment of the consideration for the supply of the tour package or the subsequent supply, as the case may be, is made at a place outside Canada at which the supplier, or an agent of the supplier, is conducting business, and

(d) the accommodation is made available to a non-resident individual,

the Minister shall, subject to subsection (8) and section 252.2, pay a rebate to the particular person equal to the tax paid by the particular person under subsection 165(1) in respect of the accommodation.

2000, c. 30, s. 68(4)

(3) Subsection 252.1(4) of the Act is repealed.

2000, c. 30, s. 68(5)

(4) The portion of subsection 252.1(5) of the Act before paragraph (a) is replaced by the following:

Tax paid in respect of tour package

(5) If a person files an application in which a rebate under subsection (2) or (3) is claimed in respect of one or more supplies of tour packages that include short-term accommodation or camping accommodation and in respect of which tax was paid by the person, for the purposes of that subsection, the total amount of tax paid under subsection 165(1) in respect of all of the accommodation is, for each of those tour packages, deemed to be equal to

1993, c. 27, s. 107(1); 1997, c. 10, s. 59(6)F; 2000, c. 30, s. 68(7)

(5) The descriptions of A and B in paragraph 252.1(5)(a) of the Act are replaced by the following:

A is the total number of nights for which short-term accommodation included in that tour package is made available in Canada under the agreement for the supply, and

B is the total number of nights for which camping accommodation included in that tour package is made available in Canada under the agreement for the supply; and

2000, c. 30, s. 68(8)

(6) The description of C in paragraph 252.1(5)(b) of the Act is replaced by the following:

C is the total number of nights for which short-term accommodation, or camping accommodation, included in that tour package is made available in Canada under the agreement for the supply of that tour package,

2000, c. 30, s. 68(8)

(7) The description of E in paragraph 252.1(5)(b) of the Act is replaced by the following:

E is the tax paid by the person under subsection 165(1) in respect of the supply of that tour package.

2000, c. 30, s. 68(9)

(8) Subsection 252.1(6) of the Act is repealed.

1993, c. 27, s. 107(1); 2000, c. 30, s. 68(10)

(9) The portion of subsection 252.1(8) of the Act before paragraph (b) is replaced by the following:

Rebate paid by registrant

(8) If

(a) a registrant makes a supply of a tour package that includes short-term accommodation or camping accommodation to a non-resident recipient who either is an individual or is acquiring the tour package for use in the course of a business of the recipient or for supply in the ordinary course of a business of the recipient of making supplies of tour packages,

1993, c. 27, s. 107(1); 2000, c. 30, s. 68(11)

(10) Paragraph 252.1(8)(c) of the Act is replaced by the following:

(c) the amount paid or credited is equal to the amount that would be determined in respect of the supply under paragraph (5)(b), and

1993, c. 27, s. 107(1)

(11) The portion of subparagraph 252.1(8)(d)(ii) of the Act before clause (A) is replaced by the following:

(ii) if the supply of the tour package includes the short-term accommodation or camping accommodation and also includes other property or services (other than meals or property or services that are provided or rendered by the person who provides the accommodation and in connection with it), a deposit of at least 20% of the total consideration for the tour package is paid

(12) Section 252.1 of the Act is amended by adding the following after subsection (9):

Filing of information

(10) If, in accordance with subsection (8), a registrant

(a) pays to, or credits in favour of, a person an amount on account of a rebate, and

(b) in determining the registrant’s net tax for a reporting period, claims a deduction under subsection 234(2) in respect of the amount paid or credited,

the registrant shall file with the Minister prescribed information in respect of the amount in prescribed form and in prescribed manner on or before the day on or before which the registrant’s return under Division V for the reporting period in which the amount is deducted is required to be filed.

(13) Subsections (1) to (11) apply in respect of any supply of short-term accommodation, camping accommodation or a tour package that includes short-term accommodation or camping accommodation, for which accommodation is first made available after March 2007, unless

(a) the accommodation is not included in a tour package, is first made available before April 2009 and is supplied under an agreement in writing entered into before September 25, 2006; or

(b) the accommodation is included in a tour package, the first night of accommodation in Canada included in the tour package is made available before April 2009 and the tour package is supplied under an agreement in writing entered into before September 25, 2006.

(14) Subsection (12) applies in respect of any supply of a tour package

(a) for which tax under Part IX of the Act becomes payable after March 2007; and

(b) for which the supplier claimed an amount as a deduction under subsection 234(2) of the Act in respect of an amount that the supplier paid to, or credited in favour of, a non-resident person after March 2007.

2000, c. 30, s. 69(2)

49. (1) Section 252.2 of the Act is amended by adding the word “and” at the end of paragraph (e) and by repealing paragraph (f).

(2) Subsection (1) applies for the purpose of determining any rebate under section 252 or 252.1 of the Act, unless the rebate is in respect of short-term accommodation, or camping accommodation, not included in a tour package and the rebate is determined in accordance with the formula in subsection 252.1(4) of the Act.

1993, c. 27, s. 107(1)

50. (1) Paragraphs 252.3(a) and (b) of the Act are replaced by the following:

(a) a rebate equal to the tax paid by the person under subsection 165(1) in respect of that supply; and

(b) a rebate equal to the tax paid by the person under subsection 165(1) in respect of a supply to the person of related convention supplies in respect of the convention.

(2) Subsection (1) applies in respect of the supply of property or services made to a person in connection with a convention that begins after March 2007, unless the convention begins before April 2009 and the supply is made under an agreement in writing entered into before September 25, 2006.

1993, c. 27, s. 107(1); 1997, c. 10, s. 219(1)(F)

51. (1) The portion of 252.4(1) of the French version of the Act before paragraph (b) is replaced by the following:

Remboursement au promoteur d’un congrès étranger

252.4 (1) Sous réserve du paragraphe (2), le ministre rembourse le promoteur d’un congrès étranger, sur présentation par celui-ci d’une demande au cours de l’année suivant le jour du congrès, dans le cas où le promoteur paie la taxe payable relativement aux fournitures ou aux importations suivantes :

a) la fourniture de biens ou de services relatifs au congrès, effectué par un inscrit qui est l’organisateur du congrès;

2000, c. 30, s. 70(1)

(2) Paragraph 252.4(1)(c) of the Act is replaced by the following:

(c) property that is imported by the sponsor, or an imported taxable supply (as defined in section 217) of property or services that are acquired by the sponsor, for consumption, use or supply by the sponsor as related convention supplies,

2000, c. 30, s. 70(2)

(3) Subparagraphs 252.4(1)(d)(i) and (ii) of the Act are replaced by the following:

(i) the tax paid by the sponsor under subsection 165(1) calculated on that part of the consideration for the supply that is reasonably attributable to the convention facility or related convention supplies other than property or services that are food or beverages or are supplied under a contract for catering, and

(ii) 50% of the tax paid by the sponsor under subsection 165(1) calculated on that part of the consideration for the supply that is reasonably attributable to related convention supplies that are food or beverages or are supplied under a contract for catering, and

2000, c. 30, s. 70(2)

(4) Subparagraphs 252.4(1)(e)(i) and (ii) of the Act are replaced by the following:

(i) if the property or service is food or beverages or is supplied under a contract for catering, 50% of the tax paid by the sponsor under subsection 165(1) and sections 212 and 218 in respect of the supply or importation of the property or service, and

(ii) in any other case, the tax paid by the sponsor under subsection 165(1) and sections 212 and 218 in respect of the supply or importation of the property or service.

2000, c. 30, s. 70(3)

(5) Subsection 252.4(3) of the Act is replaced by the following:

Rebate to organizer

(3) If an organizer of a foreign convention who is not registered under Subdivision d of Division V pays tax in respect of a supply of the convention facility or a supply or importation of related convention supplies, the Minister shall, on the application of the organizer filed within one year after the convention ends, pay a rebate to the organizer equal to the total of

(a) the tax paid by the organizer under subsection 165(1) and sections 212 and 218 calculated on that part of the consideration for the supply or on that part of the value of imported property that is reasonably attribut- able to the convention facility or related convention supplies other than property or services that are food or beverages or are supplied under a contract for catering, and

(b) 50% of the tax paid by the organizer under subsection 165(1) and sections 212 and 218 calculated on that part of the consideration for the supply or on that part of the value of imported property that is reasonably attributable to related convention supplies that are food or beverages or are supplied under a contract for catering.

(6) Section 252.4 of the Act is amended by adding the following after subsection (4):

Filing of information

(5) If, in accordance with subsection (2) or (4), a registrant

(a) pays to, or credits in favour of, a person an amount on account of a rebate, and

(b) in determining the registrant’s net tax for a reporting period, claims a deduction under subsection 234(2) in respect of the amount paid or credited,

(7) Subsections (1) to (5) apply in respect of the supply, importation or bringing into a participating province of property or services in relation to, or in connection with, a convention that begins after March 2007, except that those subsections do not apply in respect of a supply of property or services in relation to, or in connection with, a convention that begins before April 2009 if the supply is made under an agreement in writing entered into before September 25, 2006.

(8) Subsection (6) applies in respect of any supply relating to a foreign convention

(a) for which tax under Part IX of the Act becomes payable after March 2007; and

(b) for which the supplier claimed an amount as a deduction under subsection 234(2) of the Act in respect of an amount that the supplier paid to, or credited in favour of, a person after March 2007.

2001, c. 15, s. 23(1)

52. (1) The portion of the definition “practitioner” in section 1 of Part II of Schedule V to the Act before paragraph (b) is replaced by the following:

“practitioner”, in respect of a supply of optom- etric, chiropractic, physiotherapy, chiropodic, podiatric, osteopathic, audiological, speech-language pathology, occupational therapy, psychological, midwifery or dietetic services, means a person who

(a) practises the profession of optometry, chiropractic, physiotherapy, chiropody, podiatry, osteopathy, audiology, speech-language pathology, occupational therapy, psychology, midwifery or dietetics, as the case may be,

(2) Subsection (1) applies to supplies made after December 28, 2006.

53. (1) Section 7 of Part II of Schedule V to the Act is amended by striking out the word “and” at the end of paragraph (i), by adding the word “and” at the end of paragraph (j) and by adding the following after paragraph (j):

(k) midwifery services.

(2) Subsection (1) applies to supplies made after December 28, 2006.

54. (1) Part V of Schedule VI to the Act is amended by adding the following after section 10:

10.1 A supply of intangible personal property made to a non-resident person who is not registered under Subdivision d of Division V of Part IX of the Act at the time the supply is made, but not including

(a) a supply made to an individual unless the individual is outside Canada at that time;

(b) a supply of intangible personal property that relates to

(i) real property situated in Canada,

(ii) tangible personal property ordinarily situated in Canada, or

(iii) a service the supply of which is made in Canada and is not a zero-rated supply described by any section of this Part or Part VII or IX;

(c) a supply that is the making available of a telecommunications facility that is intangible personal property for use in providing a service described in paragraph (a) of the definition “telecommunication service” in subsection 123(1) of the Act;

(d) a supply of intangible personal property that may only be used in Canada; or

(e) a prescribed supply.

(2) Subsection (1) is deemed to have come into force on December 17, 1990 except that section 10.1 of Part V of Schedule VI to the Act, as enacted by subsection (1), does not apply to any supply in respect of which the supplier, before March 20, 2007, charged or collected any amount as or on account of tax under Part IX of the Act.

(3) For the purposes of applying section 10.1 of Part V of Schedule VI to the Act, as enacted by subsection (1), the definitions “telecommunication service” and “telecommunications facility” in subsection 123(1) of the Act are deemed to have come into force on December 17, 1990.

(4) If an amount was taken into account in assessing the net tax of a person under section 296 of the Act for a reporting period of the person as tax that became collectible by the person in respect of a supply made by the person before March 20, 2007 and, by reason of the application of section 10.1 of Part V of Schedule VI to the Act, as enacted by subsection (1), no tax was collectible by the person in respect of the supply,

(a) the person shall be entitled until the day that is two years after the day on which this Act receives royal assent to request in writing that the Minister of National Revenue make an assessment, reassessment or additional assessment for the purpose of taking into account that no tax was collectible by the person in respect of the supply; and

(b) on receipt of a request under paragraph (a), the Minister shall with all due dispatch

(i) consider the request, and

(ii) under section 296 of the Act and despite section 298 of the Act, assess, reassess or make an additional assessment of the net tax of the person for any reporting period of the person and of any interest, penalty or other obligation of the person, but only to the extent that the assessment, reassessment or additional assessment may reasonably be regarded as relating to the supply.

Coordinating Amendments

Bill C-40

55. If Bill C-40, introduced in the 1st session of the 39th Parliament and entitled the Sales Tax Amendments Act, 2006 (the “other Act”), receives royal assent and the day of that assent is later than or the same day as the day on which this Act receives royal assent, then

(a) subsections 34(1) and (4) of the other Act are deemed to have come into force on the day before the day on which subsection 48(1) of this Act comes into force;

(b) subsections 34(2) and (4) of the other Act are deemed to have come into force on the day before the day on which subsection 48(2) of this Act comes into force;

(c) subsections 34(3) and (4) of the other Act are deemed to have come into force on the day before the day on which subsection 48(10) of this Act comes into force;

(d) subsections 34(3) and (4) of the other Act are deemed to have come into force on the day before the day on which subsection 48(11) of this Act comes into force; and

(e) subsections 52(1) and (4) of the other Act are deemed to have come into force on the day before the day on which subsection 52(1) of this Act comes into force.

PART 4

OTHER MEASURES RELATING TO TAXATION

1997, c. 36

Customs Tariff

56. (1) The Description of Goods of tariff item No. 9804.10.00 in the List of Tariff Provisions set out in the schedule to the Customs Tariff is amended by replacing the reference to “two hundred dollars” with a reference to “four hundred dollars”.

(2) Subsection (1) is deemed to have come into force on March 20, 2007.

R.S., c. F-8; 1995, c. 17, s. 45(1)

Federal-Provincial Fiscal Arrangements Act

57. Section 34 of the Federal-Provincial Fiscal Arrangements Act is replaced by the following:

Payments in respect of provincial tax or fee imposed by participating province

34. Where, in respect of any transaction, matter or thing, a provincial tax or fee is imposed or levied under a law of a participating province and the provincial tax or fee would be payable by a corporation included in Schedule I if that law were applicable to the corporation, the corporation shall, in respect of any such transaction, matter or thing, pay the provincial tax or fee so imposed or levied as and when it would be required to do so if that law were applicable to it.

58. Schedule I to the Act is amended by adding the following at the end of that Schedule:

Any corporation that is a wholly-owned subsidiary, as defined in subsection 83(1) of the Financial Administration Act, of a corporation listed in this Schedule.

Toute personne morale qui est la filiale à cent pour cent, au sens du paragraphe 83(1) de la Loi sur la gestion des finances publiques, d’une personne morale figurant à la présente annexe.

Coming into force

59. Sections 57 and 58 are deemed to have come into force on July 1, 2000.

Payments to Ontario

Payment of $250,000,000

60. For the fiscal year beginning on April 1, 2007, from and out of the Consolidated Revenue Fund, there may be paid, on the requisition of the Minister of Finance, an amount of $250,000,000 to the Province of Ontario, to assist the province in the transition to a single corporate tax administration.

Payment of $150,000,000

61. For the fiscal year beginning on April 1, 2008, from and out of the Consolidated Revenue Fund, there may be paid, on the requisition of the Minister of Finance, an amount of $150,000,000 to the Province of Ontario, to assist the province in the transition to a single corporate tax administration.

PART 5

TAX-BACK GUARANTEE ACT

Enactment of Act

62. The Tax-back Guarantee Act is enacted as follows:

An Act to dedicate to personal tax relief imputed interest savings resulting from reductions of federal debt

Short title

1. This Act may be cited as the Tax-back Guarantee Act.

Direction to provide personal tax relief

2. The Government of Canada shall apply any imputed interest savings resulting from reductions of federal debt to measures that provide tax relief for individuals.

Meaning of “federal debt”

3. In this Act, “federal debt” means the accumulated deficit as stated in the Public Accounts prepared in accordance with sections 63 and 64 of the Financial Administration Act in respect of a fiscal year.

Imputed interest savings

4. The imputed interest savings in respect of a fiscal year of the Government of Canada is the amount determined by the Minister of Finance to be the product of multiplying the total amount by which federal debt was reduced in the year by the effective interest rate for the year.

Effective interest rate

5. The effective interest rate for a fiscal year is the ratio of the amount of public debt charges related to unmatured debt (as stated in the Public Accounts for the year) to the average amount of unmatured debt for the year (determined by dividing by two the sum of the amount of unmatured debt at the beginning of the year and the amount of unmatured debt at the end of the year, as those amounts are stated in the Public Accounts for the year).

Public announcement

6. At least once every fiscal year, the Minister of Finance shall report, by way of a statement tabled in the House of Commons or other public announcement,

(a) the finalized determination of the imputed interest savings in respect of the previous fiscal year; and

(b) an accounting of the measures to which those savings have been applied in accordance with section 2.

PART 6

R.S., c. F-8; 1995, c. 17, s. 45(1)

FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS ACT

Amendments to Act

2002, c. 7, s. 170

63. Subsection 2(2) of the Federal-Provincial Fiscal Arrangements Act is replaced by the following:

Definition of “province”

(2) In Parts I, I.1 and II, “province” does not include Yukon, the Northwest Territories or Nunavut.

1999, c. 11, s. 2(7); 2004, c. 22, s. 3(1); 2005, c. 7, s. 1(1); 2006, c. 4, ss. 182 to 188

64. Parts I and I.1 of the Act are replaced by the following:

PART I

FISCAL EQUALIZATION PAYMENTS

Fiscal Equalization Payments to Provinces

Fiscal equalization payment

3. Subject to the other provisions of this Act, there may be paid to a province a fiscal equalization payment not exceeding the amounts determined under this Part for each fiscal year in the period beginning on April 1, 2007 and ending on March 31, 2014.

Fiscal year 2007-2008

3.1 The fiscal equalization payment that may be paid to a province for the fiscal year beginning on April 1, 2007 is equal to,

(a) for Ontario, $0;

(b) for Quebec, $7,160,352,000;

(d) for New Brunswick, $1,476,523,000;

(e) for Manitoba, $1,825,796,000;

(f) for British Columbia, $0;

(g) for Prince Edward Island, $293,958,000;

(h) for Saskatchewan, $226,146,000;

(i) for Alberta, $0; and

(j) for Newfoundland and Labrador, $477,374,000.

General rule

3.2 (1) Subject to the other provisions of this Part, the fiscal equalization payment that may be paid to a province for a fiscal year beginning after March 31, 2008 is the amount, as determined by the Minister, equal to the greater of

(a) the amount determined by the formula

(A + B) × C

where

A is the aggregate of the amounts obtained by subtracting, for each revenue source except the one referred to in paragraph (e) of the definition “revenue source” in subsection 3.5(1), the average annual per capita yield in that province for the revenue source for that fiscal year from the average annual per capita national yield for the revenue source for that fiscal year,

B is 50% of the amount obtained by subtracting, for the revenue source referred to in paragraph (e) of the definition “revenue source” in subsection 3.5(1), the average annual per capita revenue to be equalized for that province for that fiscal year from the average annual per capita national revenue to be equalized for that fiscal year, and

C is the average annual population of that province for that fiscal year, and

(b) the amount determined by the formula

A × C

where

A and C have the same meaning as in paragraph (a).

Province may elect otherwise

(2) Despite subsection (1), a province may elect, at the prescribed time and in the prescribed manner, that the fiscal equalization payment that may be paid to that province for a fiscal year be equal to the amount determined by the formula set out in paragraph (1)(a).

Negative amount

(3) For the purposes of this Part, if the amount of a fiscal equalization payment computed in accordance with subsection (1) or (2) is negative, that amount is considered to be zero.

Transitional payments — British Columbia

3.3 The Minister may pay to British Columbia a transitional fiscal equalization payment, for any fiscal year in the period beginning on April 1, 2008 and ending on March 31, 2010, that is equal to the amount by which

(a) the amount of the fiscal equalization payment that would be computed for that province for that fiscal year in accordance with subsection 3.2(1) — or subsection 3.2(2) if the election described in that subsection is made — if, in computing the amount of that payment, that province’s revenue base in respect of the revenue source referred to in paragraph (d) of the definition “revenue source” in subsection 3.5(1) were determined in the manner set out in the regulations made for the purposes of this section

is greater than

(b) the amount of the fiscal equalization payment that is computed for that province for that fiscal year in accordance with subsection 3.2(1) or subsection 3.2(2), as the case may be.

Maximum fiscal equalization payment

3.4 (1) The fiscal equalization payment that may be paid to a province for a fiscal year shall be reduced if the amount that may be paid to that province for that fiscal year in accordance with section 3.2 — or, in the case of British Columbia, the aggregate of the amounts that may be paid to that province for that fiscal year in accordance with sections 3.2 and 3.3 — would, if paid, result in that province having, in that fiscal year, a total per capita fiscal capacity that is greater than the per capita fiscal capacity of any province that would not receive a fiscal equalization payment for that fiscal year if the amount of that payment were determined by the formula set out in paragraph 3.2(1)(a).

Computation of reduction

(2) The reduction of the fiscal equalization payment with respect to a province under subsection (1) is equal to the amount determined by the formula

(A - B) × C

where

A is the total per capita fiscal capacity of that province in that fiscal year;

B is the per capita fiscal capacity of the province that has the lowest per capita fiscal capacity in that fiscal year and that would not receive a fiscal equalization payment for that fiscal year if the amount of that payment were determined by the formula set out in paragraph 3.2(1)(a); and

C is the average annual population of that province for that fiscal year.

Definition of “per capita fiscal capacity”

(3) For the purposes of this section, “per capita fiscal capacity” means, in respect of a province for a fiscal year, the amount determined by the formula

A + B

where

A and B have the same meaning as in the definition “total per capita fiscal capacity” in subsection 3.5(1).

Interpretation

3.5 (1) The following definitions apply in this section and in sections 3 to 3.4.

“average annual per capita national revenue to be equalized”
« revenu national annuel moyen sujet à péréquation par habitant »

“average annual per capita national revenue to be equalized” means, for a fiscal year for a revenue source, the amount determined by the formula

(A/2 + B/4 + C/4) / D

where

A is the national revenue to be equalized for that revenue source for the fiscal year that is two years prior to that fiscal year;

B is the national revenue to be equalized for that revenue source for the fiscal year that is three years prior to that fiscal year;

C is the national revenue to be equalized for that revenue source for the fiscal year that is four years prior to that fiscal year; and

D is the aggregate of the average annual population of all provinces for that fiscal year.

“average annual per capita national yield”
« rendement national annuel moyen par habitant »

“average annual per capita national yield” means, for a revenue source for a fiscal year, the amount determined by the formula

(A/2 + B/4 + C/4) / D

where

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

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

C is the national yield for that revenue source for the fiscal year that is four years prior to that fiscal year; and

D is the aggregate of the average annual population of all provinces for that fiscal year.

“average annual per capita revenue to be equalized”
« revenu annuel moyen sujet à péréquation par habitant »

“average annual per capita revenue to be equalized” means, in respect of a province for a revenue source for a fiscal year, the amount determined by the formula

(A/2 + B/4 + C/4) / D

where

A is the revenue to be equalized for that revenue source for the fiscal year that is two years prior to that fiscal year;

B is the revenue to be equalized for that revenue source for the fiscal year that is three years prior to that fiscal year;

C is the revenue to be equalized for that revenue source for the fiscal year that is four years prior to that fiscal year; and

D is the average annual population of that province for that fiscal year.

“average annual per capita yield”
« rendement annuel moyen par habitant »

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

(A/2 + B/4 + C/4) / D

where

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

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

C is the yield for that revenue source for the fiscal year that is four years prior to that fiscal year; and

D is the average annual population of that province for 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/2 + B/4 + C/4

where

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

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

C is the population of that province for the fiscal year that is four 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.

“national revenue to be equalized”
« revenu national sujet à péréquation »

“national revenue to be equalized” means, in respect of a revenue source for a fiscal year, the amount equal to the aggregate of the revenue to be equalized for that revenue source for that fiscal year for all provinces.

“national yield”
« rendement national »

“national yield” means, for a revenue source for a fiscal year, the product obtained by multiplying the national average rate of tax for that revenue source for that fiscal year by the aggregate revenue base of all provinces in respect of that revenue source for that fiscal year.

“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.

“revenue source”
« source de revenu »

“revenue source” means any of the following sources from which provincial revenues are or may be derived:

(a) revenues relating to personal income;

(b) revenues relating to business income;

(d) revenues derived from property taxes and miscellaneous revenues; and

(e) revenues derived from natural resources.

“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.

“total per capita fiscal capacity”
« capacité fiscale totale par habitant »

“total per capita fiscal capacity” means, in respect of a province for a fiscal year, the amount determined by the formula

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

where

A is the aggregate of that province’s average annual per capita yield for each revenue source, except the one referred to in paragraph (e) of the definition “revenue source”, for that fiscal year;

B is that province’s average annual per capita revenue to be equalized, for the revenue source referred to in paragraph (e) of the definition “revenue source”, for that fiscal year;

C is any fiscal equalization payment that may be paid to that province for that fiscal year if the amount of that payment were determined in accordance with section 3.2 — or, in the case of British Columbia, sections 3.2 and 3.3 — without regard to section 3.4;

D is, with respect to Newfoundland and Labrador, any amount that may be paid to that province for that fiscal year under the Canada-Newfoundland Atlantic Accord Implementation Act;

E is, with respect to Nova Scotia or Newfoundland and Labrador, any amount that may be paid to that province for that fiscal year in accordance with sections 7, 8, 10 to 14, 21, 22, and 24 to 28 of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act; and

F is the average annual population of that province for 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 for that revenue source for that fiscal year.

Deduction in computing revenue to be equalized

(2) In computing the revenue to be equalized from the revenue source described 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.

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, in the case of the part of the revenue source referred to in paragraph (d) of the definition “revenue source” in subsection (1) that consists of local government property taxes and 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 is deemed to be revenue derived by that province from that revenue source for that fiscal year.

Nova Scotia and Newfoundland and Labrador

Computation of fiscal equalization payments

3.6 (1) The fiscal equalization payment that may be paid to Nova Scotia and the fiscal equalization payment that may be paid to Newfoundland and Labrador, for each fiscal year beginning after March 31, 2008, is the amount, as determined by the Minister, equal to the amount determined by the formula

(A - B) × C

where

A is the per capita equalization standard for that fiscal year;

B is the aggregate of the average annual per capita yield in that province for each revenue source for that fiscal year; and

C is the average annual population of that province for that fiscal year.

Per capita equalization standard

(2) For the purposes of subsection (1), the Minister shall determine the per capita equalization standard for a fiscal year as if, for that fiscal year, the amount of the fiscal equalization payment that may be paid to all provinces were computed in the manner described in that subsection and shall, in making that determination, ensure that

(a) the amount determined by the following formula would be the same with respect to every province that would receive a fiscal equalization payment:

A + (B / C)

where

A is the aggregate of the average annual per capita yield in that province for each revenue source for that fiscal year,

B is the amount of the fiscal equalization payment that would be received by that province for that fiscal year, and

C is the average annual population of that province for that fiscal year; and

(b) the aggregate of the fiscal equalization payments that may be paid to the provinces for that fiscal year would be equal to,

(i) for the fiscal year beginning on April 1, 2005, $10,900,000,000,

(ii) for the fiscal year beginning on April 1, 2006, the product obtained by multiplying $10,900,000,000 by 1.035, and

(iii) for each subsequent fiscal year, the product obtained by multiplying the amount computed for the immediately preceding fiscal year by 1.035.

Election for fiscal year 2007-2008

3.7 (1) The Minister of Finance of Nova Scotia or of Newfoundland and Labrador, as the case may be, may elect, for the fiscal year beginning on April 1, 2007, that the fiscal equalization payment that may be paid to that province be equal to $1,464,528,000 for Nova Scotia and $520,510,000 or $732,462,000 for Newfoundland and Labrador, rather than the amount set out under section 3.1. The election must be communicated to the Minister in writing on or before March 1, 2008.

Effect — election by Newfoundland and Labrador

(2) If Newfoundland and Labrador elects to receive, under subsection (1), $520,510,000, that province is considered to have made the election under subsection 3.2(2).

Election for subsequent fiscal years

(3) For any fiscal year beginning after March 31, 2008, Nova Scotia or Newfoundland and Labrador, as the case may be, may elect, at the prescribed time and in the prescribed manner, that the amount of the fiscal equalization payment that may be paid to that province be determined under sections 3.2 and 3.4, rather than under subsection 3.6(1).

Effect of election

(4) As soon as a province makes the election under subsection (3), section 3.6 ceases to apply to that province.

Fiscal year 2012-2013 and later

3.8 (1) For a fiscal year beginning after March 31, 2012, the fiscal equalization payment that may be paid to Nova Scotia or Newfoundland and Labrador, as the case may be, shall be determined under sections 3.2 and 3.4 and not subsection 3.6(1) if, for that fiscal year,

(a) in the case of Nova Scotia, the province does not meet the conditions under paragraphs 12(1)(a) and (b) of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act and is not receiving any transitional payments under section 14 of that Act; and

(b) in the case of Newfoundland and Labrador, the province does not meet the conditions under paragraphs 26(1)(a) and (b) of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act and is not receiving any transitional payments under section 28 of that Act.

Effect for subsequent fiscal years

(2) As soon as, under subsection (1), the fiscal equalization payment that may be paid for a fiscal year to Nova Scotia or to Newfoundland and Labrador, as the case may be, is to be determined under sections 3.2 and 3.4, section 3.6 ceases to apply to that province.

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 »

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”;

(d) “revenue to be equalized”.

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.

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.

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.

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.

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.

General

Time of calculation

3.91 The fiscal equalization payment that may be paid to a province for a fiscal year shall be calculated, at a time determined by the Minister, no later than three months before that fiscal year begins.

Underpayment

3.92 If the Minister determines that the Minister has underpaid any amounts payable to a province under this Part, the Minister may pay that province an amount equal to the underpayment.

Overpayment

3.93 If the Minister determines that the Minister has overpaid any amounts paid to a province for a fiscal year under this Part, the Minister may recover the amount of that overpayment from

(a) any amount payable under this Act to that province, in that fiscal year or as soon as possible after the end of that fiscal year; or

(b) that province as a debt due to Her Majesty in right of Canada.

Time and manner of payments

3.94 There may be paid out of the Consolidated Revenue Fund, on the requisition of the Minister, any amounts authorized to be paid by this Part at the times and in the manner that the Minister considers appropriate.

Recovery

3.95 If the Minister has made a payment to a province under subsection 4.2(1) of this Act as it read on the day before the day on which this section comes into force, the Minister shall, in the prescribed amounts, reduce the fiscal equalization payments to that province for the fiscal years in the period beginning on April 1, 2007 and ending on March 31, 2016. If, on March 31, 2016, the total amount of that payment has not been recovered, the Minister may recover the amount remaining as a debt due to Her Majesty in right of Canada out of any sum of money that may be due or payable by Her Majesty in right of Canada to that province pursuant to this Act or any other Act of Parliament.

PART I.1

TERRITORIAL FINANCING

Interpretation

Definitions

4. (1) The following definitions apply in this Part.

“eligible revenues”
« revenus admissibles »

“eligible revenues” means, in respect of a territory for a fiscal year, the amount equal to the product obtained by multiplying the fiscal capacity of that territory for that fiscal year by 0.70.

“fiscal capacity”
« capacité fiscale »

“fiscal capacity” means, in respect of a territory for a fiscal year, the amount determined by the formula

(A + B + C) / 3 + D

where

A is the aggregate of the yields in that territory for each revenue source for the fiscal year that is two years prior to that fiscal year;

B is the aggregate of the yields in that territory for each revenue source for the fiscal year that is three years prior to that fiscal year;

C is the aggregate of the yields in that territory for each revenue source for the fiscal year that is four years prior to that fiscal year; and

D is the revenue block for that fiscal year.

“gross expenditure base”
« base des dépenses brutes »

“gross expenditure base” means,

(a) for the fiscal year beginning on April 1, 2006, an amount equal to

(i) $593,265,276 in respect of Yukon,

(ii) $922,797,073 in respect of the Northwest Territories, and

(iii) $931,390,618 in respect of Nunavut; and

(b) in respect of a territory, for each subsequent fiscal year, an amount determined by the formula

(A × B) + C

where

A is the amount determined to be the gross expenditure base for that territory for the fiscal year preceding that fiscal year,

B is the population adjusted gross expenditure escalator for that territory for that fiscal year, and

C is the gross expenditure base adjustment determined under paragraph 4.2(a) for that territory for 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 and territories by the revenue base in respect of that revenue source for that fiscal year for all provinces and territories.

“population adjusted gross expenditure escalator”
« facteur de majoration des dépenses brutes rajustées en fonction de la population »

“population adjusted gross expenditure escalator” means, in respect of a territory for a fiscal year, a factor equal to the product obtained by multiplying

(a) the population adjustment factor for that territory for the fiscal year that is two years prior to that fiscal year

(b) the provincial local government expenditure index for the fiscal year that is two years prior to that fiscal year.

“population adjustment factor”
« facteur de rajustement en fonction de la population »

“population adjustment factor” means, in respect of a territory for a fiscal year, the measure of the population growth of that territory relative to the population growth of Canada and may be defined more particularly by the regulations.

“provincial local government expenditure index”
« indice provincial des dépenses des administrations locales »

“provincial local government expenditure index” means, for a fiscal year, the measure of changes in provincial and territorial government spending on programs and services and may be defined more particularly by the regulations.

“revenue base”
« assiette »

“revenue base” means, in respect of a revenue source for a territory for a fiscal year, the measure of the relative capacity of that territory to derive revenue from that revenue source for that fiscal year and may be defined more particularly by the regulations.

“revenue block”
« bloc de revenus »

“revenue block” means,

(a) for the fiscal year beginning on April 1, 2006, an amount equal to

(i) $54,530,841 in respect of Yukon,

(ii) $107,538,446 in respect of the Northwest Territories, and

(iii) $89,338,774 in respect of Nunavut; and

(b) in respect of a territory, for each subsequent fiscal year, the amount equal to the product obtained by multiplying the amount of the revenue block for the previous fiscal year for that territory by 1.02.

“revenue source”
« source de revenu »

“revenue source” means any of the following sources from which territorial revenues are or may be derived:

(a) revenues derived from personal income;

(b) revenues derived from corporate income and government business enterprises;

(d) revenues derived from motive fuel taxes from the sale of gasoline;

(e) revenues derived from motive fuel taxes from the sale of diesel fuel;

(f) revenues derived from the sale of alcoholic beverages; and

(g) revenues derived from payroll taxes.

“revenue to be equalized”
« revenu sujet à péréquation »

“revenue to be equalized”, in respect of a revenue source for a territory for a fiscal year, means the revenue, as determined by the Minister, derived by that territory for that fiscal year from that revenue source and may be defined more particularly by the regulations.

“superannuation adjustment”
« montant de l’indexation des pensions »

“superannuation adjustment” means,

(a) for the fiscal year beginning on April 1, 2006, an amount equal to

(i) $12,471,453 with respect to Yukon,

(ii) $18,340,573 with respect to the Northwest Territories, and

(iii) $11,108,311 with respect to Nunavut; and

(b) in respect of a territory, for each subsequent fiscal year, the amount determined by the Minister of Public Works and Government Services to be equal to, with respect to the fiscal year that is two years prior to that fiscal year, the difference between the amount of the superannuation contribution that is payable by that territory under the Public Service Superannuation Act and the amount that would be payable by that territory under that Act as it read on June 16, 1999.

“yield”
« rendement »

“yield” means, in respect of a territory for a revenue source for a fiscal year, an amount equal to the aggregate of

(a) the product obtained by multiplying the national average rate of tax for that revenue source for that fiscal year by that territory’s revenue base in respect of that revenue source for that fiscal year, and

(b) the yield adjustment determined under paragraph 4.2(b) for that fiscal year.

Determination of gross expenditure base

(2) For the purposes of the definition “gross expenditure base” in subsection (1), the amount determined to be the gross expenditure base in respect of a territory for any preceding fiscal year may be recalculated by the Minister at any time to take into account changes to the prescribed data relating to the population adjusted gross expenditure escalator.

Territorial Formula Financing Payments

Territorial formula financing payments

4.1 (1) Subject to the other provisions of this Act, there may be paid to a territory a territorial formula financing payment not exceeding the amounts determined under this Part for each fiscal year in the period beginning on April 1, 2007 and ending on March 31, 2014.

Fiscal year 2007-2008

(2) The territorial formula financing payment that may be paid to a territory for the fiscal year beginning on April 1, 2007 is equal to,

(a) for Yukon, $540,095,000;

(b) for the Northwest Territories, $788,350,000; and

Subsequent fiscal years

(3) Subject to the other provisions of this Part, the territorial formula financing payment that may be paid to a territory for a fiscal year beginning after March 31, 2008 is equal to the amount, as determined by the Minister, by which

(a) the aggregate of the gross expenditure base and the superannuation adjustment for that territory for that fiscal year

is greater than

(b) the eligible revenues for that territory for that fiscal year.

General

Powers of the Minister

4.2 The Minister may determine, in respect of a territory for a fiscal year,

(a) the amount of the gross expenditure base adjustment, in order to reflect

(i) a transfer of responsibilities between Canada and the government of a territory or the government of a territory and an aboriginal government,

(ii) the signing of land claims, comprehensive land claims or self-government agreements with aboriginal governments, and

(iii) personal income tax room sharing agreements between the government of Yukon and an aboriginal government in Yukon; and

(b) the amount of the yield adjustment, in order to reflect

(i) personal income tax room sharing agreements between the government of Yukon and an aboriginal government in Yukon,

(ii) federal statutory limitations on territorial revenue raising capacity, and

(iii) any fiscal capacity adjustments made, in respect of the Northwest Territories, for the fiscal years in the period beginning on April 1, 2004 and ending on March 31, 2006.

Time of calculation

4.3 The territorial formula financing payment payable to a territory for a fiscal year shall be calculated, at a time determined by the Minister, no later than three months before that fiscal year begins.

Underpayment

4.4 If the Minister determines that the Minister has underpaid any amounts payable to a territory under this Part, the Minister may pay that territory an amount equal to the underpayment.

Overpayment

4.5 If the Minister determines that the Minister has overpaid any amounts paid to a territory for a fiscal year under this Part, the Minister may recover the amount of that overpayment from

(a) any amount payable under this Act to that territory, in that fiscal year or as soon as possible after the end of that fiscal year; or

(b) that territory as a debt due to Her Majesty in right of Canada.

Time and manner of payments

4.6 There may be paid out of the Consolidated Revenue Fund, on the requisition of the Minister, any amounts authorized to be paid by this Part at the times and in the manner that the Minister considers appropriate.

Recovery — Yukon

4.7 The Minister may recover, from any amount payable under this Part to Yukon, the amount, as determined by the Minister, that is computed under sections 7.5 and 7.7 of the Canada-Yukon Oil and Gas Accord, signed on May 28, 1993, and under section 7.27 of the Yukon Northern Affairs Program Devolution Transfer Agreement, signed on October 29, 2001.

R.S., c. 46 (4th Supp.), s. 5(1); 1999, c. 11, s. 4; 1999, c. 31, s. 236

65. Part IV of the Act is repealed.

2003, c. 15, s. 8

66. Subsection 24.1(2) of the Act is replaced by the following:

Meaning of “total equalized tax transfer”

(2) In subsection (1), “total equalized tax transfer” means the total equalized tax transfer as determined in accordance with section 24.7.

2003, c. 15, s. 8

67. The description of M in section 24.2 of the Act is replaced by the following:

M is the amount obtained by multiplying the total equalized tax transfer for the province as determined in accordance with section 24.7 by the quotient, rounded to the nearest hundredth, that is obtained by dividing an amount equal to the cash contribution specified in subparagraph 24.1(1)(a)(i) by an amount equal to the aggregate of the cash contributions specified in subparagraphs 24.1(1)(a)(i) and 24.4(1)(a)(i).

68. The Act is amended by adding the following after section 24.2:

Provincial share — fiscal year 2014-2015 and later

24.21 Any cash contribution in the nature of contributions referred to in paragraph 24.1(1)(a) that is provided to a province under this Act for any fiscal year beginning after March 31, 2014 is to be determined by multiplying the total of such cash contributions to be provided to all the provinces for that fiscal year by the quotient obtained by dividing

(a) the population of that province for that fiscal year

(b) the total of the population of all provinces for that fiscal year.

2003, c. 15, s. 8

69. Paragraph 24.3(1)(c) of the Act is replaced by the following:

(c) promoting any shared principles and objectives, including public reporting, that are developed under subsection (2) with respect to the operation of social programs.

2003, c. 15, s. 8

70. (1) Paragraph 24.4(1)(a) of the Act is amended by striking out the word “and” at the end of subparagraph (iv) and by replac- ing subparagraph (v) with the following:

(v) $9.487 billion for the fiscal year beginning on April 1, 2007,

(vi) $10.537 billion for the fiscal year beginning on April 1, 2008, and

(vii) the product obtained by multiplying the cash contribution for the immediately preceding fiscal year by 1.03, rounded to the nearest thousand, for each fiscal year in the period beginning on April 1, 2009 and ending on March 31, 2014.

2003, c. 15, s. 8

(2) Subsection 24.4(2) of the Act is replaced by the following:

Meaning of “total equalized tax transfer”

(2) In subsection (1), “total equalized tax transfer” means the total equalized tax transfer as determined in accordance with section 24.7.

2003, c. 15, s. 8

71. (1) The portion of section 24.5 of the Act before the description of K is replaced by the following:

Provincial share: fiscal year 2006-2007 and earlier

24.5 The cash contribution established under any of subparagraphs 24.4(1)(a)(i) to (iv) that may be provided to a province for the fiscal year mentioned in that subparagraph is the amount determined by the formula

F × (K/L) - M

where

F is the total of the amounts established under subparagraphs 24.4(1)(a)(i) to (iv) and paragraph 24.4(1)(b) for the fiscal year;

2003, c. 15, s. 8

(2) The description of M in section 24.5 of the Act is replaced by the following:

M is the amount obtained by multiplying the total equalized tax transfer for the province as determined in accordance with section 24.7 by the quotient, rounded to the nearest hundredth, that is obtained by dividing an amount equal to the cash contribution specified in subparagraph 24.4(1)(a)(i) by an amount equal to the aggregate of the cash contributions specified in subparagraphs 24.1(1)(a)(i) and 24.4(1)(a)(i).

72. The Act is amended by adding the following after section 24.5:

Provincial share — fiscal year 2007-2008 and later

24.51 The cash contribution established under any of subparagraphs 24.4(1)(a)(v) to (vii) that may be provided to a province for the fiscal year mentioned in that subparagraph is the amount determined by multiplying the amount established under that subparagraph for that fiscal year by the quotient obtained by dividing

(a) the population of the province for that fiscal year

(b) the total of the population of all provinces for that fiscal year.

2003, c. 15, s. 8

73. (1) The portion of subsection 24.7(1) of the Act before paragraph (a) is replaced by the following:

Total equalized tax transfer — fiscal years 2004-2005 to 2006-2007

24.7 (1) The total equalized tax transfer applicable to a province for each fiscal year in the period beginning on April 1, 2004 and ending on March 31, 2007 is the aggregate of

2005, c. 7, s. 4(1)

(2) The portion of subparagraph 24.7(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 Transfer and the Canada Social Transfer for the fiscal year, if the method of calculation of fiscal equalization payments as set out in Part I, excluding subsection 4(6) of this Act, as that Part read on May 13, 2004, were to be applied to the value of the income tax reduction in all the provinces in respect of the Canada Health Transfer and the Canada Social Transfer for the fiscal year, except that

2005, c. 7, s. 4(2)

(3) Paragraph 24.7(1.1)(a) of the Act is replaced by the following:

(a) for each fiscal year in the period beginning on April 1, 2005 and ending on March 31, 2007, the equalization payment shall be the equalization payment that would be payable to the province for the fiscal year under Part I, as that Part read on March 28, 2007; and

2005, c. 7, s. 4(2)

(4) Subparagraph 24.7(1.1)(b)(i) of the Act is replaced by the following:

(i) in the case of a province that receives an additional fiscal equalization payment under subsection 4(3), as it read on March 28, 2007, the estimate that was made by the Minister on February 23, 2004 in respect of the fiscal year in accordance with section 8 of the Federal-Provincial Fiscal Arrangements Regulations, 1999, and

2003, c. 15, s. 4(2)

(5) Subparagraph 24.7(1.1)(b)(ii) of the English version of the Act is replaced by the following:

(ii) in the case of a province that does not receive an additional fiscal equalization payment under subsection 4(3), as it read on March 28, 2007, the final computation in respect of the fiscal year.

(6) Section 24.7 of the Act is amended by adding the following after subsection (1.1):

Total equalized tax transfer — fiscal year 2007-2008 and later

(1.2) The total equalized tax transfer applica- ble to a province for each fiscal year beginning after March 31, 2007 is the aggregate of

(a) the total amount, as determined by the Minister, for that fiscal year represented by the federal income tax reduction in that province in respect of the Canada Health Transfer and the Canada Social Transfer for that fiscal year, and

(b) the amount equal to the lesser of

(i) the equalization payment payable to that province for that fiscal year under Part I, and

(ii) an amount of equalization equal to the greater of

(A) the product obtained by multiplying

(I) the aggregate of the amounts obtained by subtracting, for each revenue source referred to in paragraphs (a) and (b) of the definition “revenue source” in subsection 3.5(1), the per capita yield for that province for that fiscal year from the per capita national yield for that fiscal year

(II) the population of that province for that fiscal year, and

(B) zero.

Revenue sources

(1.3) For the purposes of the calculation under subparagraph (1.2)(b)(ii), the relevant revenue bases, per capita yield and per capita national yield are to be determined in the prescribed manner.

2003, c. 15, s. 8

(7) The portion of subsection 24.7(2) of the Act before paragraph (a) is replaced by the following:

Federal income tax reduction

(2) For the purposes of subsections (1) and (1.2), the amount represented by the federal income tax reduction in a province in respect of the Canada Health Transfer and the Canada Social Transfer for a fiscal year is an amount equal to the aggregate of

74. The Act is amended by adding the following after section 24.7:

Transition Protection

Prevention of transfer declines — Canada Health Transfer

24.701 (1) The Minister may pay to a province an additional cash payment for each fiscal year beginning after March 31, 2007 equal to the amount by which

(a) the cash contribution established under paragraph 24.1(1)(a) to be provided to that province for the fiscal year beginning on April 1, 2007 as calculated under this Act, as it read on March 28, 2007

exceeds

(b) the cash contribution established under paragraph 24.1(1)(a) to be provided to that province for each of those fiscal years as calculated under this Act as it reads on the day on which this subsection comes into force.

Prevention of transfer declines — Canada Social Transfer

(2) The Minister may pay to a province an additional cash payment for each fiscal year beginning after March 31, 2007 equal to the amount by which

(a) the cash contribution established under paragraph 24.4(1)(a) to be provided to that province for the fiscal year beginning on April 1, 2007 as calculated under this Act, as it read on March 28, 2007

exceeds

(b) the cash contribution established under paragraph 24.4(1)(a) to be provided to that province for each of those fiscal years as calculated under this Act as it reads on the day on which this subsection comes into force.

75. Section 40 of the Act is amended by adding the following before paragraph (b):

(a) respecting the determination of amounts that are to be computed under Part I or I.1;

(a.1) respecting the information that must be prepared and submitted by the Chief Statistician of Canada for the purposes of Parts I and I.1;

(a.2) providing for the provincial or territo- rial revenues that constitute, or are deemed to constitute, the revenues referred to in each paragraph of the definition “revenue source” in subsections 3.5(1) and 4(1);

(a.3) providing for the provincial revenues that constitute, or are deemed to constitute, the revenues referred to in each paragraph of the definition “revenue source” in subsection 4(2) of this Act as it read on March 13, 2004;

(a.4) defining, for the purposes of sections 3.6 to 3.9, the expressions “national average rate of tax”, “revenue base” and “revenue to be equalized”;

76. The Act is amended by adding the following after section 40:

Softwood Lumber Products Export Charge Act, 2006

Recovery

40.1 (1) Despite any other provision of this Act, if, in any fiscal year, the costs referred to in paragraphs 99(1)(a) and (b) of the Softwood Lumber Products Export Charge Act, 2006 exceed the revenues, less any refunds, derived by Her Majesty in right of Canada from the charges imposed under sections 10 and 15 of that Act, then the amount of that excess may be recovered from any payments payable to provinces under this Act.

Restriction

(2) Despite subsection (1), the amount that may be recovered under that subsection with respect to a province for a fiscal year shall not exceed the difference between the aggregate of the amounts paid to that province under section 99 of the Softwood Lumber Products Export Charge Act, 2006 in prior fiscal years and the aggregate of the amounts that have been previously recovered under this section with respect to that province for those prior fiscal years.

Transitional Provisions

Amounts paid before coming into force (Part I)

77. For the fiscal year beginning on April 1, 2007, the fiscal equalization payment that may be paid to a province under Part I of the Federal-Provincial Fiscal Arrangements Act, as enacted by section 64 of this Act, shall be adjusted by deducting all the amounts of fiscal equalization payments paid to that province for that fiscal year before the day on which this Act receives royal assent.

Amounts paid before coming into force (Part I.1)

78. For the fiscal year beginning on April 1, 2007, the territorial formula financing payment that may be paid to a territory under Part I.1 of the Federal-Provincial Fiscal Arrangements Act, as enacted by section 64 of this Act, shall be adjusted by deducting all the amounts of the territorial formula financing payments paid to that territory for that fiscal year before the day on which this Act receives royal assent.

Amounts paid before coming into force (Part V.1)

79. For the fiscal year beginning on April 1, 2007, the Canada Health Transfer and Canada Social Transfer payments that may be paid to a province under Part V.1 of the Federal-Provincial Fiscal Arrangements Act, as amended by sections 66 to 74 of this Act, shall be adjusted by deducting all of the Canada Health Transfer and Canada Social Transfer payments paid to that province for that fiscal year before the day on which this Act receives royal assent.