Federal-Provincial Fiscal Arrangements Act (R.S.C. 1970, c. F-6)

Marginal note:Federal revenue abatement

15 The federal revenue abatement relating to post-secondary education applicable to a province for a fiscal year is the amount of the revenue loss sustained by Canada in respect of the fiscal year, by virtue of certain deductions permitted by Part I of the Income Tax Act in computing income taxes payable for a taxation year ending in the fiscal year, calculated as the aggregate of

• (a) the amount, as determined by the Minister, that would be derived from a tax

  • (i) on the incomes (other than incomes from businesses) of individuals resident in the province on the last day of that taxation year, within the meaning of the Income Tax Act,

  • (ii) on the incomes (other than incomes from businesses) earned in the province in that taxation year by individuals not resident in Canada at any time during that taxation year, within the meaning of the Income Tax Act, and

  • (iii) on the incomes from businesses earned in the province in that taxation year by individuals, within the meaning of the Income Tax Act,

  equal to four one-hundredths of the tax otherwise payable, within the meaning of section 33 of the Income Tax Act, on those incomes; and

• (b) the amount, as determined by the Minister, that would be derived from a tax on the income earned in the province by each corporation (other than a non-resident owned investment corporation as defined in the Income Tax Act or a corporation specified in Schedule D to the Financial Administration Act that is an agent of Her Majesty in right of Canada) that maintained a permanent establishment in the province at any time during its taxation year, for the purposes of the Income Tax Act, ending in the calendar year that ends in the fiscal year, at the rate of one per cent of its taxable income earned in the province in that taxation year, such tax to be computed as if imposed under the Income Tax Act and regulations thereunder.

Marginal note:Determination of operating expenditures

• 16 (1) In determining the operating expenditures for post-secondary education in a province in a fiscal year, the Secretary of State of Canada shall have recourse to and be guided by

  • (a) any provincial return of operating expenditures submitted to him for the fiscal year;

  • (b) any information contained in a report made to him by the Minister of Supply and Services in connection with such operating expenditures; and

  • (c) such additional information as he may consider appropriate.

• Marginal note:Provincial return

  (2) For the purposes of this section a provincial return of operating expenditures for a fiscal year is a statistical return, in prescribed form, relating to the operating expenditures for post-secondary education in the province in the fiscal year,

  • (a) that has been signed by the Deputy Minister of Education of the province or such other provincial officer as may be designated by the Lieutenant Governor in Council for the purpose; and

  • (b) that has been certified by the provincial auditor as having been examined by him, and, to the best of his knowledge and belief,

    • (i) as accurately setting forth the operating expenditures for post-secondary education in the province in the fiscal year, calculated in accordance with the requirements of this Act and the regulations, and

    • (ii) as being based on

      • (A) financial returns for the fiscal year in respect of each educational institution in the province that is not a secondary institution, and

      • (B) a financial report for the fiscal year in respect of all secondary institutions in the province.

• Marginal note:Financial returns and report

  (3) For the purposes of subsection (2)

  • (a) a financial return for a fiscal year in respect of an educational institution that is not a secondary institution is a statement relating to the operating expenditures incurred for post-secondary education by that institution during its financial year related to the fiscal year, that has been certified by an independent auditor as having been examined by him, and, to the best of his knowledge and belief, as accurately setting forth the operating expenditures incurred for post-secondary education by that institution during its financial year, calculated in accordance with the requirements of this Act and the regulations; and

  • (b) a financial report for a fiscal year in respect of all secondary institutions in a province is a statement setting forth the operating expenditures incurred for post-secondary education by or in respect of all such institutions during their financial years related to the fiscal year, that has been signed by the Deputy Minister of Education of the province or such other provincial officer as may be designated by the Lieutenant Governor in Council for the purpose.

• Marginal note:Definitions

  (4) In this section

  independent auditor

  independent auditor means an auditor who is a member in good standing of an institution or association of accountants incorporated by or under the authority of the legislature of a province but who is not, except as otherwise provided by regulation, the same person or a member of the same firm or office of auditors as, or employed by the same employer as, the provincial auditor; (vérificateur indépendant)

  provincial auditor

  provincial auditor means such person as is charged by law with the audit of the accounts of a province; (vérificateur provincial)

  secondary institution

  secondary institution, in respect of a province, means an institution in that province that offers at a post-secondary level only prescribed programs of study. (établissement secondaire)

Marginal note:Failure to file return

17 Where a provincial return of operating expenditures for a fiscal year as described in subsection 16(2) has not been submitted to the Secretary of State of Canada,

• (a) in the case of the fiscal year commencing on the 1st day of April 1967, within twelve months after the end of the fiscal year, and

• (b) in the case of any subsequent fiscal year, within nine months after the end of the fiscal year,

the Secretary of State of Canada, in determining the operating expenditures for post-secondary education in the province in the fiscal year, shall have recourse to and be guided by such information available to him as he considers appropriate, but in no such case shall the amount determined by the Secretary of State of Canada to be equal to fifty per cent of the operating expenditures for post-secondary education in the province in the fiscal year be less than the product obtained by multiplying $15 by the population of the province for the calendar year ending in the fiscal year.

Marginal note:Report of Minister of Supply and Services

18 The Minister of Supply and Services may, after consultation with the appropriate provincial authority,

• (a) examine any financial return for a fiscal year in respect of an educational institution, as described in subsection 16(3), and

• (b) request and receive from the independent auditor who certified any financial return for a fiscal year in respect of an educational institution, as described in subsection 16(3), such information, reports and explanations as he deems necessary in order to satisfy himself as to the method and procedure employed by such auditor in determining the operating expenditures incurred for post-secondary education by that institution during its financial year related to the fiscal year,

and shall make such report to the Secretary of State of Canada in respect thereof as he considers appropriate.

Marginal note:C.R.F.

19 The amounts authorized to be paid by section 12 shall be paid out of the Consolidated Revenue Fund at such times and in such manner as may be prescribed.

PART IIIGeneral

Tax Collection Agreements

Marginal note:Tax collection agreements

• 20 (1) Where a province imposes taxes on the income of individuals or corporations or both, the Minister, with the approval of the Governor in Council, may, on behalf of the Government of Canada, enter into an agreement with the government of the province pursuant to which the Government of Canada will collect the provincial taxes on behalf of the province and will make payments to the province in respect of the taxes so collected, in accordance with such terms and conditions as the agreement prescribes.

• Marginal note:Amendments to agreements

  (2) The Minister, with the approval of the Governor in Council, may, on behalf of the Government of Canada, enter into an agreement amending the terms and conditions of an agreement entered into pursuant to subsection (1).

• Marginal note:Application of requirements of provincial law to certain persons

  (3) Where the law of a province that imposes a tax on income as described in subsection (1) contains provisions requiring every person making a payment of a specified kind to another person to deduct or withhold therefrom an amount and to remit that amount on account of such tax, effect may be given to those provisions, in accordance with the regulations, in relation to persons to whom such payments are made out of the Consolidated Revenue Fund or by an agent of Her Majesty in right of Canada.

Marginal note:Agreements under former Act

21 Where an agreement was entered into pursuant to subsection 6(1) or (2) of the former Act, the agreement shall be deemed to have been entered into pursuant to subsection 20(1).

Marginal note:Advance payments under agreements

22 Where a province has entered into a tax collection agreement, the Minister, in accordance with the regulations, may make advance payments to the province out of the Consolidated Revenue Fund on account of any amount that may become payable to the province pursuant to the agreement.

Regulations

Marginal note:Regulations

23 The Governor in Council may make regulations

• (a) defining, for the purposes of this Act,

  • (i) the expression revenue base in subsection 8(2),

  • (ii) the expressions in paragraphs (a) to (p) of the definition revenue source in subsection 8(2),

  • (iii) the expressions junior matriculation and post-secondary level in subsection 11(1),

  • (iv) the expression assisted, sponsored or contract research, and

  • (v) the expression operating expenditures incurred for post-secondary education by or in respect of an educational institution or secondary institution;

• (b) respecting the payment to a province of advances on account of any amount that may become payable to the province pursuant to this Act or a tax collection agreement, the adjustment of other payments by reason of such advances and the recovery of overpayments;

• (c) prescribing the time and manner of making any payment under this Act or a tax collection agreement;

• (d) prescribing the accounts to be kept and their management;

• (e) respecting the determination of any matter that under this Act is to be determined by the Minister or the Secretary of State of Canada;

• (f) respecting any matter that by this Act is to be defined, provided or prescribed by, or done in accordance with, the regulations; and

• (g) generally for carrying into effect the purposes and provisions of this Act.