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Federal Finance Department Allocates 26%

January 30th, 2013 Leave a comment Go to comments

Federal Finance Department Allocates 26% of Equalization.

                Recently it was learned that the federal Finance Department allocates approximately 26% of the Nova Scotia payment in 2012-2013 due to the province’s relative weakness in property tax fiscal capacity.

The province does not collect property taxes. The Municipal Act, 1998, c 18, s.72 authorizes municipal councils to estimate, levy and collect commercial, residential, and resource property taxes. It follows that the 26% allotment is therefore for municipalities according to the provincial formulars that are in force, and that the remaining 74 % is distributed by the province at its discretion, but nevertheless for the purpose stated in the Constitution Act, 1982.

The 2005 Offshore Accord payments from the federal government to Nova Scotia is for a limited period and provides 100% protection from Equalization reductions resulting from the inclusion of offshore resource revenues in the equalization program. Therefore the 2005 Accord payments must be included in equalization and should also be used at the discretion of the provincial government for the same purpose.

The provincial is distributing about 4.09% of the allocated amount from equalization and increasing its total distribution from other sources that it legislated earlier in the program. The 2005 Offshore Accord payment is not included or distributed. The point being made is that about 95.9% of the equalization payment plus the Accord amount goes into general revenues. The details and amounts are described in “Facts on Equalization in Nova Scotia Revised January 25, 2013”, and the “2012-2013 Equalization Grant Revised January 18, 2013”.

 

There are questions concerning actions that have been taken by NSEF and the government, the ruling of the Supreme Court of Nova Scotia regarding CBRM’s suit against the government of Nova Scotia and the effect of the federal 26% allocation to Nova Scotia and many others. The answers to these and others that may be forthcoming will be answered on the FAQ (Frequently Answered Questions) in the tool bar at the right top of the Home Page.

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