OTTAWA – The Liberal government says Alberta could be in line for financial help from an obscure, rarely used fiscal stabilization program, which is designed to help provinces contend with a sudden drop in revenues.
Here are some questions, and answers, about the program:
How old is it?
— It was introduced in 1967, according to the federal Finance Department.
What does the program do?
— It provides compensation for provinces that see their non-resource revenues fall more than five per cent from one year to the next due to changes in economic circumstances. Declines in resource revenues of more than 50 per cent are also accounted for.
How does a province apply to receive funds?
— A province can file a claim up to 18 months after the end of the fiscal year in question. It can also submit a claim for an advance payment based on as few as five months worth of data for the fiscal year in question.
How much can a province receive through the program?
— They can receive up to a maximum payment of $60 for every provincial resident. A province may also request interest-free loans for any amount over the cap, to be repaid within five years. It’s up to the federal finance minister to decide whether to provide a loan.
When has it been used?
— Since 1967, the program has compensated provinces a total of just over $2 billion. Each province has received at least one payment through the program, except Saskatchewan. Ontario has received by far the most funding at nearly $1.1 billion. Only 14 payments have been made in nearly 50 years; no province has made a successful claim since 1993-94.
SOURCE: Finance Canada
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