Federal-Provincial Fiscal Arrangements Regulations, 2007

5 In respect of a revenue source for a province for a fiscal year, the definition revenue base in subsection 3.5(1) of the Act is more particularly defined to mean

• (a) in the case of revenues relating to personal income, described in paragraph 4(1)(a), the aggregate of

  • (i) a fraction, expressed as a percentage for the province,

    • (A) whose numerator is the simulated average revenue yield relating to personal income for the province for the taxation year that ends in the fiscal year, as determined in accordance with subsection 10(2), and

    • (B) whose denominator is the aggregate, over the 10 provinces, of the amount referred to in clause (A), and

  • (ii) the difference obtained by subtracting

    • (A) a fraction, expressed as a percentage for the province,

      • (I) whose numerator is the aggregate, over all individuals — not including trusts — in the province, of the federal income tax as determined by the micro-simulation model for the taxation year that ends in the fiscal year, and

      • (II) whose denominator is the aggregate, over the 10 provinces, of the amount referred to in subclause (I),

    from

    • (B) a fraction, expressed as a percentage for the province,

      • (I) whose numerator is the aggregate, over all individuals in the province – including trusts – of the federal income tax payable for the taxation year that ends in the fiscal year as determined for each individual, and

      • (II) whose denominator is the aggregate, over the 10 provinces, of the amount referred to in subclause (I);

• (b) in the case of the revenues relating to business income, described in paragraph 4(1)(b), the aggregate of

  • (i) the product of the portion of the aggregate of corporate profits in Canada, before the payment of income taxes and without any deduction of the aggregate of corporate losses in Canada, that is attributable to any of the 10 provinces for the calendar year that ends in the fiscal year, as determined by Statistics Canada for the purpose of its System of Macroeconomic Accounts and a fraction

    • (A) whose numerator is the allocated corporation taxable income attributable to the province for the fiscal year, and

    • (B) whose denominator is the aggregate, over the 10 provinces, of the amount referred to in clause (A),

  • (ii) the product, as determined on the basis of data prepared by Statistics Canada for the purpose of the Government Finance Statistics, of

    • (A) the aggregate, over all provinces, of the total profits, before the distribution of dividends, that are attributable to the province for the calendar year that ends in the fiscal year from business enterprises that have a profit in that calendar year and are owned 90% or more by that province, or by that province and one or more other provinces, excluding the profits for that calendar year

      • (I) of a liquor board, commission or authority,

      • (I.1) of a cannabis board, commission or authority,

      • (II) of an enterprise engaged, entirely or primarily, in the marketing of oil or natural gas,

      • (III) of an enterprise carrying on a provincial lottery,

      • (IV) of an electricity enterprise, and

      • (V) of the Ontario Electricity Financial Corporation and the Nova Scotia Power Finance Corporation, and

    • (B) a fraction whose numerator is the amount of the total profits referred to in clause (A) that are attributable to the province less the amount by which any losses that were accumulated in the seven calendar years before that calendar year by a business enterprise referred to in that clause exceed the portion of those losses subtracted under this clause for that business enterprise in relation to that period, but only to the extent that the amount is not more than the total profits for that calendar year of that business enterprise, and whose denominator is the aggregate, over all the provinces, of those numerators; and

  • (iii) the difference, as determined on the basis of data prepared by Statistics Canada for the purpose of the Government Finance Statistics, that is obtained by subtracting all remittances to the provincial government of the profits of an electricity enterprise for the fiscal year from the product of

    • (A) the aggregate, over all provinces, of the total profits, before the distribution of dividends, that are attributable to the province for the calendar year that ends in the fiscal year from electricity enterprises that have a profit in that calendar year and are owned 90% or more by that province, or by that province and one or more other provinces, and

    • (B) a fraction whose numerator is the amount of the total profits referred to in clause (A) that are attributable to the province less the amount by which any losses that were accumulated in the seven calendar years before that calendar year by an electricity enterprise referred to in that clause exceed the portion of those losses subtracted under this clause for that electricity enterprise in relation to that period, but only to the extent that the amount is not more than the total profits for that calendar year of that electricity enterprise, and whose denominator is the aggregate, over all the provinces, of those numerators;

• (c) in the case of revenues relating to consumption, as described in paragraph 4(1)(c), the amount determined on the basis of data provided by Statistics Canada for the calendar year that ends in the fiscal year by the formula

  A + B + C + D + E + F + G + H + I + J

  where

  A

  is the aggregate, over all household final consumption expenditure categories, of the household final consumption expenditures in the province for each category multiplied by a fraction whose numerator is the total of the net provincial sales tax revenues derived from those expenditures for that category in all provinces that levy a general sales tax and whose denominator is the total of those expenditures for that category in all of those provinces,

  B

  is the aggregate, over all housing expenditure categories, of the housing expenditures in the province for each category multiplied by a fraction whose numerator is the total of the net provincial sales tax revenues derived from those expenditures for that category in all provinces that levy a general sales tax and whose denominator is the total of those expenditures for that category in all of those provinces,

  C

  is the aggregate, over all business sector industries and all commodities, of the capital expenditures for machinery and equipment in the province, by each industry for each commodity, multiplied by a fraction whose numerator is the total of the net provincial sales tax revenues derived from those expenditures by that industry for that commodity in all provinces that levy a general sales tax and whose denominator is the total of those expenditures by that industry for that commodity in all of those provinces,

  D

  is the aggregate, over all business sector industries and all commodities, of the capital expenditures for non-residential structures in the province, by each industry for each commodity, multiplied by a fraction whose numerator is the total of the net provincial sales tax revenues derived from those expenditures, by that industry for that commodity, in all provinces that levy a general sales tax and whose denominator is the total of those expenditures, by that industry for that commodity, in all of those provinces,

  E

  is the aggregate, over all public education or non-profit entity categories, of the capital expenditures for machinery and equipment in the province by each category multiplied by

  • (a) in the case of the public education services category, a fraction, whose numerator is the total of the net provincial sales tax revenues derived from those expenditures by that category in all provinces that levy a general sales tax and whose denominator is the total of those expenditures by that category in all of those provinces, multiplied by 25 per cent, and

  • (b) in the case of the non-profit entity category, a fraction whose numerator is the total of the net provincial sales tax revenues derived from those expenditures by that category in all provinces that levy a general sales tax and whose denominator is the total of those expenditures by that category in all of those provinces,

  F

  is the aggregate, over all public education or non-profit entity categories, of the capital expenditures for non-residential structures in the province by each category multiplied by

  • (a) in the case of the public education services category, a fraction, whose numerator is the total of the net provincial sales tax revenues derived from those expenditures by that category in all provinces that levy a general sales tax and whose denominator is the total of those expenditures by that category in all of those provinces, multiplied by 25 per cent, and

  • (b) in the case of the non-profit entity category, a fraction whose numerator is the total of the net provincial sales tax revenues derived from those expenditures by that category in all provinces that levy a general sales tax and whose denominator is the total of those expenditures by that category in all of those provinces,

  G

  is the aggregate, over all post-secondary education or non-profit industries and all intermediate inputs, of the intermediate input expenditures in the province by each industry for each intermediate input multiplied by

  • (a) in the case of the post-secondary educational services industry, a fraction, whose numerator is the total of the net provincial sales tax revenues derived from those expenditures by that industry for that intermediate input in all provinces that levy a general sales tax and whose denominator is the total of those expenditures by that industry for that intermediate input in all of those provinces, multiplied by 50 per cent, and

  • (b) in the case of the non-profit institutions serving households industry, a fraction whose numerator is the total of the net provincial sales tax revenues derived from those expenditures by that industry for that intermediate input in all provinces that levy a general sales tax and whose denominator is the total of those expenditures by that industry for that intermediate input in all of those provinces,

  H

  is the aggregate, over all business sector industries and all intermediate inputs, of the intermediate input expenditures in the province by each industry for each intermediate input, multiplied by a fraction whose numerator is the total of the net provincial sales tax revenues derived from those expenditures by that industry for that intermediate input in all provinces that levy a general sales tax and whose denominator is the total of those expenditures by that industry for that intermediate input in all of those provinces,

  I

  is the aggregate, over all business sector industries and all commodities, of capital expenditures for intellectual property products in the province by each industry for each commodity multiplied by a fraction, whose numerator is the total of the net provincial sales tax revenues derived from those expenditures by that industry for that commodity in all provinces that levy a general sales tax and whose denominator is the total of those expenditures by that industry for that commodity in all of those provinces, and

  J

  is the aggregate, over all public education or non-profit entity categories, of the capital expenditures for intellectual property products in the province by each category multiplied by

  • (a) in the case of the public education services category, a fraction, whose numerator is the total of the net provincial sales tax revenues derived from those expenditures by that category in all provinces that levy a general sales tax and whose denominator is the total of those expenditures by that category in all of those provinces, multiplied by 25 per cent, and

  • (b) in the case of the non-profit entity category, a fraction whose numerator is the total of the net provincial sales tax revenue derived from those expenditures by that category in all provinces that levy a general sales tax and whose denominator is the total of those expenditures by that category in all of those provinces; and

• (d) in the case of revenues derived from property taxes, described in paragraph 4(1)(d), the weighted sum of three sub-bases, determined by the formula

  (B1 × 0.611) + (B2 × 0.378) + (B3 × 0.011)

  where

  B1

  is the market value residential sub-base as determined by the formula

  [(V × 1/V1) × 0.7] + [(P × 1/P1) × 0.3]

  where

  V

  is the assessed market value of residential property in the province for the calendar year that ends in the fiscal year,

  V1

  is the aggregate, over all provinces, of the amounts determined for V,

  P

  is the population of the province for the fiscal year, as determined in accordance with section 11, and

  P1

  is the aggregate, over all provinces, of the amounts determined for P,

  B2

  is the market value commercial-industrial sub-base as determined by the formula

  (VC ÷ VC1 × 0.7) + (P ÷ P1 × 0.3)

  where

  VC

  is the assessed market value of commercial-industrial property in the province for the calendar year that ends in the fiscal year,

  VC1

  is the aggregate, over all provinces, of the amounts determined for VC,

  P

  is the population of the province for the fiscal year, as determined in accordance with section 11, and

  P1

  is the aggregate, over all provinces, of the amounts determined for P, and

  B3

  is the market value farm sub-base as determined by the formula

  (VF ÷ VF1 × 0.7) + (P ÷ P1 × 0.3)

  where

  VF

  is the market value of the land and service buildings components of farm real estate in the province for the calendar year that ends in the fiscal year, as determined by Statistics Canada for the purpose of table 32-10-0056-01, Balance sheet of the agricultural sector as at December 31st,

  VF1

  is the aggregate, over all provinces, of the amounts determined for VF,

  P

  is the population of the province for the fiscal year, as determined in accordance with section 11, and

  P1

  is the aggregate, over all provinces, of the amounts determined for P.