Federal-Provincial Relations

The Minister and the Department of Finance have a long-established process for consultations with provinces and territories.

The consultative process largely consists of meetings/teleconferences at various levels: among Ministers once or twice a year; among Deputies as required; and among Assistant Deputy Ministers two or three times a year each on tax matters, on economic and fiscal matters, and as required on federal-provincial transfers and on the Canada Pension Plan. These meetings/teleconferences are supported by working groups, some of which meet regularly or as needed.

Except for the Canada Pension Plan Committee (see below), these meetings are consultative. They serve as a venue for an exchange of views as well as playing a role in co-ordinating policy between the federal and provincial/territorial governments. The discussions are not binding and the committees have no decision-making power.

A. Key Federal –Provincial –Territorial Finance Committees

Finance Ministers' Meetings

• Deputy Ministers: Retreats or Continuing Committee of officials
  • Fiscal Arrangements Committee
    • Transfers Sub-Committee
  • Senior Financial Arrangements Committee
    • Working Groups as required
  • Canada Pension Plan Committee
    • Working Groups as required
  • Economic and Fiscal Data Sub-committee
    • Working Groups as required
  • Committee on Taxation
    • Sub-Committees and Working Groups as required
  • Financial Sector Policy dialogue
    • Working Groups as required

Finance Ministers' Meetings

Federal-provincial-territorial Finance Ministers' Meetings have taken place regularly since 1959 to discuss economic and fiscal issues, recognizing that the spending and taxing policies of both the federal and provincial-territorial governments often have direct or indirect impacts on each other.

Meetings are chaired by the federal Minister of Finance and are held at the call of the Chair, usually twice per year. One is generally held pre-budget, typically in December, and the other post-budget in or around the month of June. The December meeting is customarily face-to-face, while the other meeting has at times been held via teleconference depending on the nature of the issues being covered.

A typical agenda for a face-to-face meeting might include discussions on:

• the economic and fiscal outlook and issues influencing it, including financial market developments, commodity prices, exchange rate developments, debt targets, Budget directions, etc.;
• presentation on global and Canadian economic and financial developments from the Governor of the Bank of Canada;
• tax policy issues;
• transfer issues (e.g., Equalization, Canada Health Transfer and Canada Social Transfer);
• the Canada Pension Plan;
• infrastructure investments; or,
• other issues with federal-provincial implications.

Federal and provincial governments are jointly responsible for conducting a formal review of the Canada Pension Plan every three years. Any decisions to change the Canada Pension Plan must have the formal support of at least two thirds of the provinces representing at least two-thirds of Canada's population.

Locations of meetings vary around the country, with Ottawa traditionally being the locale for about half of them.

Continuing Committee of Officials

The Continuing Committee of Officials (CCO), established in 1955, is made up of the federal, provincial, and territorial Deputy Ministers of Finance.

Chaired by the federal Deputy Minister of Finance, the Committee consults on finance-related issues with federal-provincial-territorial implications. Meetings at the Deputy Minister of Finance level are held at the call of the Chair.

The Committee may launch sub-committees, technical committees and/or working groups on federal-provincial fiscal, taxation or transfer issues as appropriate. The sub-committees generally meet more frequently, for example, twice per year in the case of the sub-committee on Fiscal and Economic Issues.

In the recent past, the federal Deputy Minister of Finance has preferred to hold Finance Deputy Ministers' Retreats rather than calling a meeting of the Continuing Committee of Officials. The mandate and membership of the DM Retreats and Deputy Minister CCO are identical.

Finance Deputy Ministers' Retreats

Federal, Provincial and Territorial Finance Deputy Ministers' Retreats are chaired by the federal Deputy Minister of Finance to consult on federal-provincial fiscal, taxation or transfer issues with federal-provincial implications. Annual retreats at the Deputy Minister of Finance level are held at the call of the Chair.

B. Other Finance Committees

Fiscal Arrangements Committee

The Fiscal Arrangements Committee (FAC) is comprised of Assistant Deputy Ministers responsible for federal-provincial fiscal relations. The meetings are chaired by the federal Assistant Deputy Minister, Federal-Provincial Relations and Social Policy, and meet and/or hold teleconferences as required.

The Committee consults on fiscal transfer issues, including the Equalization program, the Canada Health Transfer and the Canada Social Transfer, and on federal-provincial issues generally. A sub-committee on transfers meets regularly, generally once or twice per year.

Senior Financial Arrangements Committee

The Senior Financial Arrangements Committee (SFAC) is comprised of territorial Deputy Ministers of Finance and the federal Assistant Deputy Minister, Federal-Provincial Relations and Social Policy. The committee is chaired by the federal Assistant Deputy Minister, and meets as required.

The Committee consults on fiscal transfer issues relevant to the territories, in particular, Territorial Formula Financing. A sub-committee meets regularly at the working level, generally once or twice per year.

Canada Pension Plan Committee

Comprised of officials responsible for the Canada Pension Plan policy, the Committee is chaired by the federal Associate Assistant Deputy Minister of the Federal-Provincial Relations and Social Policy Branch, at the discretion of the Assistant Deputy Minister.

The purpose of the Committee is to provide a forum for federal-provincial-territorial officials to discuss possible changes to the Plan and the Triennial Review process. Federal and provincial ministers of finance are the co-stewards of the Plan.

The Committee meets as often as required, from two times a year during down periods to as often as bi-weekly during active periods. Officials from other federal departments and agencies, such as Employment and Social Development Canada and the Office of the Chief Actuary, also participate in the meetings.

Economic and Fiscal Data Sub-Committee

Comprised of Assistant Deputy Ministers responsible for fiscal and economic policy, the Committee is chaired by the federal Assistant Deputy Minister, Economic and Fiscal Policy Branch. Its purpose is to exchange information primarily of a technical nature (e.g., economic/ fiscal forecasts; assessment of risks; accounting methods).

The Committee meets twice a year, with a face-to-face meeting in June and a teleconference in December.

From time-to-time, the Committee will establish working groups to undertake joint federal-provincial-territorial work on issues of common interest.

Federal-Provincial Committee on Taxation (Tax Committee)

Federal-provincial/territorial collaboration and coordination in matters of tax policy is assisted through the operation of the Tax Committee. This committee is comprised of the federal, provincial and territorial Assistant Deputy Ministers responsible for tax policy. The Tax Committee is chaired by the federal Senior Assistant Deputy Minister, Tax Policy Branch, and usually meets two times annually.

The Tax Committee provides a forum for senior federal, provincial and territorial finance officials to discuss common current and emerging tax policy issues and examine their consequences for the national and provincial/territorial economies. These discussions can be very useful in providing an exchange of information, with the potential of guiding policy development in a common direction for the benefit of both national and regional economies.

From time to time, the Tax Committee will establish sub-committees to undertake joint federal-provincial-territorial work on issues of common interest.

Federal-Provincial Tax Policy Review Committee / Tax Harmonization Committee

The Federal-Provincial Tax Policy Review Committee (TPRC) was established under the Comprehensive Integrated Tax Coordination Agreements (CITCAs) with provinces that are part of the Harmonized Sales Tax (HST): Nova Scotia, New Brunswick, Newfoundland and Labrador, Ontario and Prince Edward Island. The federal Minister of Finance and the Ministers of Finance of the participating provinces, each appoint a member to the committee. The TPRC's role is to monitor the ongoing operation of, and resolve issues in relation to, the HST system. The Committee is chaired by the federal member and meetings are held on an as required basis. The federal and provincial members each communicate, as appropriate, the results of the deliberations of the TPRC to the relevant federal and provincial Deputy Ministers.

Also created under the CITCA with the HST provinces, the Revenue Allocation Sub‑Committee (RASC), which reports to the TPRC, is responsible for overseeing the HST revenue allocation mechanism and ensuring that it functions in the interests of the federal government and the participating provinces.

In the case of Quebec, the oversight role contemplated in the Canada-Quebec CITCA is carried out by the bilateral Tax Harmonization Committee (THC). The THC's role is to consider issues related to the GST/HST and QST, including the harmonized tax base and associated administrative, structural and definitional parameters. There is no RASC equivalent under the Canada-Quebec CITCA since GST and QST revenues are not apportioned by a revenue allocation mechanism.

Cannabis Taxation Policy Committee

Under the Coordinated Cannabis Taxation Agreements (CCTAs), a Cannabis Taxation Policy Committee (CTPC), consisting of representatives from Canada and each coordinated province and territory, is tasked with overseeing the coordinated cannabis duty system. The Committee reviews issues related to the legislation governing the coordinated cannabis duty, including the common duty base, duty rates and common duty structure. It is charged with monitoring the cannabis market to ensure that tax rates, mark-ups and margins are in keeping with the principles of the CCTAs and with identifying potential adjustments that could support the objectives of cannabis legalization over time.

Federal-Provincial-Territorial Financial Sector Policy Dialogue

Comprised of Assistant Deputy Heads with financial sector oversight responsibilities and Deputy Heads from all federal financial sector regulators Office of the Superintendent of Financial Institutions, Financial Consumer Agency o Canada, the Bank of Canada, Canada Deposit Insurance Corporation and Canada Mortgage and Housing Corporation, the Committee is chaired by the federal Assistant Deputy Minister, Financial Sector Policy Branch. The Committee meets once a year and discuss financial sector related initiatives.

A typical agenda might include discussions on:

• financial sector innovation (financial technology, retail payments)
• housing markets
• anti-money laundering, anti-terrorist financing regime and corporate transparency
• consumer protection
• other financial sector issues (trade initiatives, cybersecurity, catastrophic risk/earthquake risk)

From time-to-time, the Committee will establish working groups to undertake financial sector related work.

British Columbia-Canada Working Group on Real Estate

Comprised of officials from federal and provincial organizations with a nexus to the real estate sector, the Committee is co-chaired by the Associate Assistant Deputy Minister of the Financial Sector Policy Branch and the Assistant Deputy Minister of British Columbia Ministry of Finance's Policy and Legislation Division.

The purpose of the Committee is to enhance communication, information sharing and alignment amongst relevant operational and policy partners to explore and better address issues and risks related to fraud, money laundering and tax evasion through real estate in British Columbia.

The Committee meets and holds calls when needed and has formed three sub-working groups to look at data collection and sharing; regulatory gaps, compliance, standards and education; and improving enforcement and prosecution.

Expert Panel on the Future of Housing Supply and Affordability

The federal and British Columbia governments announced the launch of the Expert Panel on the Future of Housing Supply and Affordability on September 4, 2019. The Expert Panel, a joint federal-provincial panel, is to complete its work and provide a report to the Ministers of Finance of British Columbia and Canada by the end of 2020. The six-person panel will be chaired by Joy MacPhail, who is currently the Chair of the Insurance Corporation of British Columbia. The members are leaders and specialists in a range of relevant fields.

The Expert Panel will identify and evaluate potential federal and provincial measures to make housing in British Columbia's high-priced markets more affordable and to increase housing supply. This could include undertaking analysis on demographics and market trends, housing regulations and financing; and exploring innovations in new forms of housing (e.g., micro housing).

At the request of B.C., the Expert Panel has a mandate to identify and evaluate measures to deter unwarranted (unproductive) demand, including access to financing, reducing speculative market behavior and the use of real estate for money laundering purposes. This work will be informed by the work of the B.C.-Canada Ad Hoc Working Group on the Real Estate Sector.

The panelists' consultations and analysis will be supported by the Government through a secretariat established by Canada Mortgage and Housing Corporation, led by Evan Siddall as Executive Secretary.

Heads of Agencies

The Heads of Agencies committee is comprised of the Deputy Heads of organizations with financial sector oversight responsibilities from the federal government (Department of Finance, Bank of Canada, and the Office of the Superintendent of Financial Institutions) and the major provincial securities regulators (British Columbia, Alberta, Ontario, and Quebec). The Heads of Agencies committee is chaired by the Governor of the Bank of Canada, and meets twice a year to share information and discuss financial sector related issues of common interest.

A typical Heads of Agencies agenda might include discussions on:

• Financial sector risks and vulnerabilities
• Financial sector technology (cyber security)
• Emerging asset classes (green assets, crypto assets)
• Market structure (financial benchmarks, securities settlement)
• Market regulation (derivatives, federal and provincial regulations)
• Any other financial sector issues of common interest

C. Other Types of Federal –Provincial-Territorial Consultations

Throughout the year, multi- and bilateral meetings with the federal finance minister or deputy minister could be held.

In the case of bilateral ministerial meetings, provincial/territorial ministers often request meetings with the federal finance minister or deputy minister to discuss concerns specific to their province/territory.

Finally, provinces and territories may appear before parliamentary committees studying bills to provide comments.