Federal-Provincial Fiscal Arrangements Act

Marginal note:Adjustment of fiscal equalization payment

• 4.1 (1) Notwithstanding subsections 4(1), (1.2) and (1.3), in respect of a fiscal year beginning on or after April 1, 2005, the Minister may, on or before March 31 of that fiscal year, on the request of a province made in the prescribed manner on or before March 31 of that fiscal year, adjust the fiscal equalization payment calculated under section 4 for the province for that fiscal year, if

  • (a) the province derived, in that fiscal year, revenues from any of the revenue sources described in paragraphs (m) to (u) of the definition revenue source in subsection 4(2) as revised or altered in accordance with subsection 4(3); and

  • (b) the per capita yield of that province for that revenue source was greater than the average per capita yield of the provinces of Ontario, Quebec, British Columbia, Manitoba and Saskatchewan for that revenue source in that fiscal year.

• Marginal note:Calculation of adjustment

  (2) The amount of the adjustment referred to in subsection (1) is equal to the estimate, calculated by March 31 of that fiscal year, of

  • (a) the product obtained by multiplying

    • (i) the aggregate of the amounts obtained by subtracting the per capita yield in that province for each revenue source referred to in paragraph (1)(a), and to which paragraph (1)(b) applies, for that fiscal year from the average per capita yield of the provinces of Ontario, Quebec, British Columbia, Manitoba and Saskatchewan for that revenue source for that fiscal year

    by

    • (ii) the population of the province for that fiscal year

  minus

  • (b) the average of the products, for each of the fiscal years taken into account in the calculation of the fiscal equalization payment for the fiscal year, obtained by multiplying

    • (i) the aggregate of the amounts obtained by subtracting the per capita yield in that province for each revenue source referred to in paragraph (1)(a), and to which paragraph (1)(b) applies, for one of those fiscal years taken into account from the average per capita yield of the provinces of Ontario, Quebec, British Columbia, Manitoba and Saskatchewan for that revenue source for that fiscal year

    by

    • (ii) the population of the province for that fiscal year.

• Marginal note:Negative result

  (3) If the amount of the adjustment in subsection (2) is negative, the Minister shall pay to the province one third of the absolute value of that amount in each of the three fiscal years immediately following the fiscal year in respect of which the adjustment is made.

• Marginal note:Positive result

  (4) If the amount of the adjustment in subsection (2) is positive, the Minister shall recover that amount from the province by deducting one third of that amount from the fiscal equalization payment for that province in each of the three fiscal years immediately following the fiscal year in respect of which the adjustment is made.

• Marginal note:Recovery

  (5) If, on March 31 of the third fiscal year after the fiscal year in which the adjustment is made, the total amount of that adjustment 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 the province pursuant to this Act or any other Act of Parliament.