Law:Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act

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S.c. 2005, c. 30, s. 85

Assented to 2005-06-29

An Act respecting additional fiscal equalization offset payments for Nova Scotia and Newfoundland and Labrador relating to revenues from offshore petroleum resources

(Enacted by section 85 of chapter 30 of the Statutes of Canada, 2005, in force on assent June 29, 2005.)

Contents

Short Title

Short title

1. This Act may be cited as the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act.


Interpretation

Definitions

2. The following definitions apply in this Act.

“Canada–New­foundland and Labrador Arrangement”

« Entente Canada – Terre-Neuve-et- Labrador »

“Canada–New­foundland and Labrador Arrangement” means the Arrangement between the Government of Canada and the Government of Newfoundland and Labrador on Offshore Revenues signed on February 14, 2005.

“Canada–Nova Scotia Arrangement”

« Entente Canada – Nouvelle-Écosse »

“Canada–Nova Scotia Arrangement” means the Arrangement between the Government of Canada and the Government of Nova Scotia on Offshore Revenues signed on February 14, 2005.

“Minister”

« ministre »

“Minister” means the Minister of Finance.


Purpose

Purpose of the Act

3. The purpose of this Act is to implement the Canada–Newfoundland and Labrador Arrangement and the Canada–Nova Scotia Arrangement.


Part 1. Additional Fiscal Equalization Offset Payments For Nova Scotia

Definitions

4. The following definitions apply in this Part.

“additional fiscal equalization offset payment”

« paiement de péréquation compensatoire supplémentaire »

“additional fiscal equalization offset payment” means the payment that may be made under section 6, 7 or 12.

“fiscal equalization offset payment”

« paiement de péréquation compensatoire »

“fiscal equalization offset payment” means the fiscal equalization offset payment that may be made to the Province for a fiscal year under Part V of the Canada–Nova Scotia Offshore Petroleum Resources Accord Implementation Act.

“fiscal equalization payment”

« paiement de péréquation »

“fiscal equalization payment” means

(a) for the purposes of section 8, the fiscal equalization payment that would be received by the Province for a fiscal year if the amount of that payment were determined in accord-ance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act; and

(b) for the purposes of sections 10 to 12, the fiscal equalization payment that would be received by the Province for a fiscal year under Part I of the Federal-Provincial Fiscal Arrangements Act if the Province’s total per capita fiscal capacity were the amount determined by the formula

A + B + (c / F)

where

A,�B, C and F have the same meaning as in the definition “total per capita fiscal capacity” in subsection 3.5(1) of that Act.“offshore revenue”

« recettes extracôtières »

“offshore revenue” in respect of any fiscal year means the aggregate of the following amounts paid to the Province for that fiscal year:

(a) amounts paid under paragraph 219(2)(b) of the Canada–Nova Scotia Offshore Petroleum Resources Accord Implementation Act;

(b) amounts paid with respect to the portion of tax under subsection 165(2) and sections 218.1, 220.05, 220.06 and 220.08 of the Excise Tax Act that is attributable to offshore activity in the Nova Scotia offshore area, within the meaning of subsection 123(1) of that Act; and

(c) amounts paid with respect to tax that would be payable under Part III of the Income Tax At (Nova Scotia), R.S.N.S. 1989, c. 217, as amended from time to time, on taxable capital of a corporation employed in the offshore area within the meaning of section 2 of the Canada–Nova Scotia Offshore Petroleum Resources Accord Implementation Act if that area were in the land portion of the Province, unless those amounts have been included in paragraph (a).

“petroleum”

« hydro­carbures »

“petroleum” has the same meaning as in section 2 of the Canada–Nova Scotia Offshore Petroleum Resources Accord Implementation Act.

“Province”

Version anglaise seulement“Province” means the Province of Nova Scotia.

2005, c. 30, ss. 85 “4”; 2007, c. 29, s. 81.

Previous VersionPayment of $830 million

5. The Minister shall make a payment to the Province in the amount of $830 million, to allow the Province to reduce its outstanding debt.

Additional fiscal equalization offset payment of $30.5 million

6. (1) For the 2004-2005 fiscal year, the Minister shall make an additional fiscal equalization offset payment to the Province in the amount of $30.5 million.

Additional fiscal equalization offset payment of $26.6 million

(2) For the 2005-2006 fiscal year, the Minister shall make an additional fiscal equalization offset payment to the Province in the amount of $26.6 million.

Additional fiscal equalization offset payments for the 2006-2012 period

7. For each fiscal year between April 1, 2006 and March 31, 2012, the Minister shall make an additional fiscal equalization offset payment to the Province calculated in accordance with section 8.

Calculation of payments

8. The additional fiscal equalization offset payment that shall be made to the Province for a fiscal year corresponds to the amount determined by the Minister in accordance with the formula

(a - B) - C

where

A�is the fiscal equalization payment that may be made to the Province for the fiscal year under the equalization formula in effect at that time, calculated as if the Province did not have any offshore revenue or petroleum production;B�is the fiscal equalization payment that may be made to the Province for that fiscal year under the equalization formula in effect at that time; andC�is the fiscal equalization offset payment for that fiscal year.Restriction

9. Despite any other provision of this Act, no payment shall be made under sections 6 to 8 except to the extent that the aggregate of the payments determined under those sections for the fiscal year and the preceding applicable fiscal years exceeds $830 million.

Restriction

10. For any given fiscal year between April 1, 2006 and March 31, 2012, the Province will not receive the additional fiscal equalization offset payment provided for in section 7 if it does not receive a fiscal equalization payment for that fiscal year.

Transitional payments for the 2006-2011 period

11. (1) For each fiscal year between April 1, 2006 and March 31, 2011 in which the Province does not receive a fiscal equalization payment, the Minister shall make a transitional payment to the Province equal in amount to the sum that would be payable, under section 219 of the Canada–Newfoundland Atlantic Accord Implementation Act, and that would be determined, under section 220 of that Act, as if those sections applied to that Province’s offshore revenue.

Transitional payment for 2011-2012

(2) If the Province does not receive a fiscal equalization payment for the 2011-2012 fiscal year, the Minister shall make a transitional payment equal in amount to the sum that would be payable, under section 219 of the Canada–Newfoundland Atlantic Accord Implementation Act, and that would be determined, under section 220 of that Act, as if those sections applied to that Province’s offshore revenue and the amount determined in accordance with paragraph 220(b) of that Act is equal to zero.

First fiscal year of production

(3) For the purpose of this section, the first fiscal year of offshore production is the fiscal year beginning on April 1, 1999.

Additional fiscal equalization offset payments for the 2012-2020 period

12. (1) For any fiscal year between April 1, 2012 and March 31, 2020, the Minister shall make additional fiscal equalization offset payments to the Province, determined in accordance with the formula set out in section 8 if

(a) the Province qualified for a fiscal equalization payment in the 2010-2011 or 2011-2012 fiscal year;

(b) the Province’s per capita net debt as of March 31, 2012 was not lower than that of at least four other provinces; and

(c) the Province receives a fiscal equalization payment for that fiscal year.

Determination of per capita net debt

(2) For the purpose of paragraph (1)(b), “per capita net debt” for a province as of March 31, 2012 means the amount determined by the Minister in accordance with the regulations.

Restriction

13. For greater certainty, if the Province does not meet the conditions set out in paragraphs 12(1)(a) and (b), it will not receive the additional fiscal equalization offset payment provided for in section 12 for any of the fiscal years between April 1, 2012 and March 31, 2020.

Transitional payments for the 2012-2020 period

14. (1) If for any fiscal year between April 1, 2012 and March 31, 2020 the Province does not receive an additional fiscal equalization offset payment but it received an additional fiscal equalization offset payment for the previous fiscal year, the Minister shall, for that fiscal year, pay to the Province a transitional payment equal to two thirds of the additional fiscal equalization offset payment it received for the previous fiscal year.

Transitional payments for the 2012-2020 period

(2) If for any fiscal year between April 1, 2012 and March 31, 2020 the Province does not receive an additional fiscal equalization offset payment and did not receive an additional fiscal equalization offset payment for the previous fiscal year, but received an additional fiscal equalization offset payment for the fiscal year two years before that fiscal year, the Minister shall, for that fiscal year, pay to the Province a transitional payment equal to one third of the additional fiscal equalization offset payment it received for the fiscal year two years before that fiscal year.

Review of the Canada–Nova Scotia Arrangement

15. On or before March 31, 2019, the Minister, on behalf of the Government of Canada, and the minister designated by the Province for the purpose will review the Canada–Nova Scotia Arrangement in accordance with clause 8 of that Arrangement.

Discussions

16. The Government of Canada shall enter into discussions with the Province if requested to do so by the Province under the terms of clause 9 of the Canada–Nova Scotia Arrangement.

Determination

17. A determination, for any fiscal year, of the additional fiscal equalization offset payment for the Province and for any other calculation that is necessary for the purposes of this Part shall be made by the Minister at the same time as the final computation of the amount, if any, of the fiscal equalization payment that is payable to the Province is made for that fiscal year under Part I of the Federal-Provincial Fiscal Arrangements Act.


Part 2. Additional Fiscal Equalization Offset Payments For Newfoundland And Labrador

Definitions

18. The following definitions apply in this Part.

“additional fiscal equalization offset payment”

« paiement de péréquation compensatoire supplémentaire »

“additional fiscal equalization offset payment” means the payment that may be made under section 20, 21 or 26.

“fiscal equalization offset payment”

« paiement de péréquation compensatoire »

“fiscal equalization offset payment” means the fiscal equalization offset payment that may be made to the Province for a fiscal year under Part V of the Canada–Newfoundland Atlantic Accord Implementation Act.

“fiscal equalization payment”

« paiement de péréquation »

“fiscal equalization payment” means the fiscal equalization payment that may be made to the Province for a fiscal year under Part I of the Federal-Provincial Fiscal Arrangements Act.

“offshore revenue”

« recettes extracôtières »

“offshore revenue”, in respect of any fiscal year, means the aggregate of the following amounts paid to the Province for that fiscal year:

(a) amounts paid under paragraph 214(2)(b) of theCanada-Newfoundland Atlantic Accord Implementation Act;

(b) amounts paid with respect to the portion of tax under subsection 165(2) and sections 218.1, 220.05, 220.06 and 220.08 of the Excise Tax Act that is attributable to offshore activity in the Newfoundland offshore area, within the meaning of subsection 123(1) of that Act; and

(c) the royalties paid under the Hibernia Development Project Royalty Agreement signed on September 1, 1990, as amended from time to time.

“petroleum”

« hydro­carbures »

“petroleum” has the same meaning as in section 2 of the Canada–Newfoundland Atlantic Accord Implementation Act.

“Province”

Version anglaise seulement“Province” means the Province of Newfoundland and Labrador.

Payment of $2 billion

19. The Minister shall make a payment to the Province in the amount of $2 billion to allow the Province to reduce its outstanding debt.

Additional fiscal equalization offset payment of $133.6 million

20. (1) For the 2004-2005 fiscal year, the Minister shall make an additional fiscal equalization offset payment to the Province in the amount of $133.6 million.

Additional fiscal equalization offset payment of $188.7 million

(2) For the 2005-2006 fiscal year, the Minister shall make an additional fiscal equalization offset payment to the Province in the amount of $188.7 million.

Additional fiscal equalization offset payment for the 2006-2012 period

21. For each fiscal year between April 1, 2006 and March 31, 2012, the Minister shall make an additional fiscal equalization offset payment to the Province calculated in accordance with section 22.

Calculation of payments

22. The additional fiscal equalization offset payment that shall be made to the Province for a fiscal year corresponds to the amount determined by the Minister in accordance with the formula

(a - B) - C

where

A�is the fiscal equalization payment that may be made to the Province for the fiscal year under the equalization formula in effect at that time, calculated as if the Province did not have any offshore revenue or petroleum production;B�is the fiscal equalization payment to the Province for that fiscal year under the equalization formula in effect at that time; andC�is the fiscal equalization offset payment for that fiscal year.Restriction

23. Despite any other provision of this Act, no payment shall be made under sections 20 to 22 by the Minister to the Province except to the extent that the aggregate of the payments determined under those sections for the fiscal year and the preceding applicable fiscal years exceeds $2 billion.

Restriction

24. For any given fiscal year between April 1, 2006 and March 31, 2012, the Province will not receive the additional fiscal equalization offset payment provided for in section 21 if it does not receive a fiscal equalization payment for that fiscal year.

Transitional payments for 2011-2012

25. If the Province does not receive a fiscal equalization payment for the 2011-2012 fiscal year, the Minister shall make a transitional payment equal in amount to the sum that would be payable under section 219 of the Canada–Newfoundland Atlantic Accord Implementation Act, and that would be determined, under section 220 of that Act, as if those sections applied to that fiscal year and the amount determined in accordance with paragraph 220(b) of that Act is equal to zero.

Additional fiscal equalization offset payments for the 2012-2020 period

26. (1) For any fiscal year between April 1, 2012 and March 31, 2020, the Minister shall make additional fiscal equalization offset payments to the Province, determined in accordance with the formula set out in section 22, if

(a) the Province qualified for a fiscal equalization payment in either of the 2010-2011 or 2011-2012 fiscal years;

(b) the Province’s per capita debt servicing charges as of March 31, 2012 were not lower than those of at least four other provinces; and

(c) the Province receives a fiscal equalization payment for that fiscal year.

Determination of per capita debt servicing charge

(2) For the purpose of paragraph (1)(b), “per capita debt servicing charges” as of March 31, 2012, means the amount determined by the Minister in accordance with the formula

(a - B - C + D) / E

where

A�is the total of a province’s debt servicing charges for the 2011-2012 fiscal year, based on figures published in the fully consolidated audited financial statements presented on a full accrual basis of accounting in the province’s Public Accounts for the 2011-2012 fiscal year, with any necessary adjustments, as required, to include all of the debt charges related to unfunded pension liabilities, post-employment benefits and debt charges of government organizations and entities whose inclusion would be consistent with the accounting principles of full consolidation;B�is the portion of A, if any, related to borrowings made by a province on behalf of self-supporting government business enterprises that are not dependent on transfers, grants or other direct funding from the province to fund their day-to-day operations or debt repayments;C�is the portion of A, if any, related to borrowings made by a province on behalf of municipalities that are not in default on their interest payment obligations to the province;D�is the total of a province’s debt servicing charges for the 2011-2012 fiscal year related to borrowings made by the province on behalf of municipalities that are in default on their interest payment obligations to the province, if these are not already included in A; andE�is the total population of a province on July 1, 2011 based on the latest Statistics Canada official estimates available as soon as all provinces have released their Public Accounts for the 2011-2012 fiscal year.Restriction

27. For greater certainty, if the Province does not meet the conditions set out in paragraphs 26(1)(a) and (b), it will not receive the additional fiscal equalization offset payment provided for in section 26 for any of the fiscal years between April 1, 2012 and March 31, 2020.

Transitional payments for the 2012-2020 period

28. (1) If for any fiscal year between April 1, 2012 and March 31, 2020 the Province does not receive an additional fiscal equalization offset payment but it received an additional fiscal equalization offset payment for the previous fiscal year, the Minister shall, for that fiscal year, pay to the Province a transitional payment equal to two thirds of the additional fiscal equalization offset payment it received for the previous fiscal year.

Transitional payments for 2012-2020 period

(2) If for any fiscal year between April 1, 2012 and March 31, 2020 the Province does not receive an additional fiscal equalization offset payment and did not receive an additional fiscal equalization offset payment for the previous fiscal year, but received an additional fiscal equalization offset payment for the fiscal year two years before that fiscal year, the Minister shall, for that fiscal year, pay to the Province a transitional payment equal to one third of the additional fiscal equalization offset payment it received for the fiscal year two years before that fiscal year.

Review of the Canada–Newfoundland and Labrador Arrangement

29. On or before March 31, 2019, the Minister, on behalf of the Government of Canada, and the minister designated by the Province for the purpose will review the Canada–Newfoundland and Labrador Arrangement, in accordance with clause 8 of that Arrangement.

Discussions

30. The Government of Canada shall enter into discussions with the Province if requested to do so by the Province under the terms of clause 9 of the Canada–Newfoundland and Labrador Arrangement.

Determination

31. A determination, for any fiscal year, of the additional fiscal equalization offset payment for the Province and for any other calculation that is necessary to be made for the purposes of this Part shall be made by the Minister at the same time as the final computation of the amount, if any, of the fiscal equalization payment that is payable to the Province is made for that fiscal year under Part I of the Federal-Provincial Fiscal Arrangements Act.


Part 3. General Provisions

Appropriation

32. The amounts authorized to be paid under this Act shall be paid out of the Consolidated Revenue Fund by the Minister at the time and in the manner, subject to section 33, that the Minister considers appropriate.

Regulations

33. (1) The Governor in Council may make regulations, on the recommendation of the Minister,

(a) prescribing the time and manner of making any payments under this Act;

(b) respecting the determination of the amount referred to in subsection 12(2);

(c) respecting the determination of any matter that under this Act is to be determined by the Minister; and

(d) prescribing anything that is required or authorized to be prescribed by this Act.

Approval of the minister designated by the Province

(2) The Minister may recommend the making of a regulation under paragraph (1)(b) only after receipt by the Minister of the approval of the proposed regulation from the minister designated by the Province for that purpose.


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