Glossary of Frequently-Used Terms.
Canada bill (bon du Canada).
Promissory note denominated in US dollars. Canada bills mature not more than 270 days from their date of issue and are discount obligations with a minimum order size of US$1,000,000 and a minimum denomination of US$1,000. Primary distribution occurs through a number of specified issuing agents, and rates on Canada bills are posted daily. Participants in this market include US, Canadian and international financial institutions.
Canada Child Tax Benefit (CCTB) (Prestation fiscale canadienne pour enfants (PFCE)).
The CCTB provides annual financial assistance to families with children. It has two key components: the CCTB base benefit and the National Child Benefit supplement. As of July 2000, the maximum CCTB benefits will be $1,975 for the first child and $1,775 for each subsequent child. Nationally, the CCTB will then provide close to $7 billion to 3.2 million families. Consult the Department of Finance's Canada Child Tax Benefit: Update pamphlet for more information and the Canada Customs and Revenue Agency Tax Tip - How do you qualify for Canada Child Tax Benefit payments page to find out how to qualify.
Canada Child Tax Benefit (CCTB) base benefit (prestation de base de la Prestation fiscale
canadienne pour enfants (PFCE)).
Effective July 2000, the CCTB base benefit provided to modest- and middle-income families will be increased by $184 per family ($92 per family for one-child families). This will be achieved by increasing the net income threshold at which the base benefit begins to be phased out from $25,921 to $29,590. Consult the Department of Finance's Canada Child Tax Benefit: Update pamphlet for more information and the Canada Customs and Revenue Agency Tax Tip - How do you qualify for Canada Child Tax Benefit payments page to find out how to qualify.
Canada Deposit Insurance Corporation (CDIC) (Société d'assurance-dépôts du Canada (SADC)).
A federal Crown corporation that was established in 1967 to protect Canadian currency deposits against the possible failure of CDIC member financial institutions. As a general rule, eligible deposits are protected up to a maximum of $60,000 per person, including principal and interest, at each member institution. For more information, visit the Canada Deposit Insurance Corporation Web site.
Canada Foundation for Innovation (CFI) (Fondation canadienne pour l'innovation (CFCI)).
An independent organization that makes strategic investments in Canadian research. The foundation provides funding for research at universities, colleges, research hospitals and not-for-profit institutions, in areas such as science, engineering, health and the environment. Members of the foundation act independently of the government and are drawn from the research community and the private sector. The CFI does not support projects of government departments, agencies or Crown corporations. In 1998 the CFI announced $58 million in awards, about 45 per cent of which was for health research infrastructure. It expects to announce about $429 million in awards in 1999. For more information, visit the Canada Foundation for Innovation Web site.
Canada Health and Social Transfer (CHST) (Transfert canadien en matière de santé et de programmes sociaux (TCSPS)).
Federal transfer provided to each province in support of provincial health care, post-secondary education, social assistance and social services. The CHST is provided through cash payments and tax transfers. In exchange for receiving CHST payments, provinces must adhere to the principles of the Canada Health Act and are required to provide social assistance without minimum residency requirements. For more information, visit the Department of Finance Federal Transfers to Provinces and Territories Web page.
Canada Health and Social Transfer (CHST) supplement (supplément du Transfert canadien en matière de santé et de programmes sociaux (TCSPS)).
In the 1999 federal budget, the federal government announced a one-time $3.5-billion supplement to the CHST to be drawn down by the provinces for health care over the following three years on a per capita basis. The supplement will bring total CHST transfers to $14.5 billion in 1999-2000 and to $15 billion in 2001-02. For more information, visit the Department of Finance Federal Transfers to Provinces and Territories Web page.
Canada Investment and Savings (CI&S) (Placements Épargne Canada (PEC)) .
A special operating agency in the Department of Finance. Its mandate is to revitalize the federal government's retail debt program and to maintain a reasonable retail share of the Government of Canada's debt. For more information, visit the Canada Investment and Savings Web site.
Canada note (billet du Canada).
Promissory note usually denominated in US dollars and available in book-entry form. Notes can be issued for terms of nine months or longer, and can be issued at a fixed or a floating rate. Canada notes are issued for foreign exchange reserve funding purposes only.
Canada Pension Plan (CPP) (Régime de pensions du Canada (RPC)).
A contributory, earnings-related social insurance program which ensures a measure of income protection to contributors and their families against the loss of income due to retirement, disability or death. The plan operates throughout Canada except in the province of Quebec, where a similar program the Quebec Pension Plan is in effect. CPP contributions and benefits are not part of the federal government's revenues or expenditures and therefore do not directly affect the federal government's budget. For more information, visit the Canada Pension Plan page at the Human Resources Development Canada Web site.
Canada Premium Bond (CPB) (Obligation à prime du Canada (OPC)).
A new savings product for individual Canadians, introduced by the Government of Canada in 1998. It offers a higher interest rate compared to the Canada Savings Bond and is redeemable once a year on the anniversary of the issue date or during the 30 days thereafter without penalty. For more information, visit the Canada Investment and Savings Canada Premium Bonds Web page.
Canada Savings Bond (CSB) (Obligation d'épargne du Canada (OEC)).
CSBs are currently offered for sale by most Canadian financial institutions to individual Canadians. CSBs pay a competitive rate of interest that is guaranteed for one or more years. They may be cashed at any time and, after the first three months, pay interest up to the end of the month prior to encashment. For more information, visit the Canada Investment and Savings Canada Savings Bond Web page.
Canadian Banking Ombudsman (Ombudsman bancaire canadien).
An independent, industry-sponsored organization that investigates complaints from individuals and small businesses about banking services. Its goal is to provide fair, impartial and prompt resolution of complaints, based on good business and banking practices. For more information, visit the Canadian Banking Ombudsman Web site.
Canadian film or video production tax credit (crédit d'impôt pour production cinématographique ou magnétoscopique canadienne).
The Canadian film or video production tax credit mechanism provides a fully refundable tax credit of up to 12 per cent of the eligible cost of a certified Canadian film or video production to qualified taxable Canadian corporations. The credit is computed as 25 per cent of qualified labour costs, which may not exceed 48 per cent of the cost of the film or video production (i.e. generally a net credit of 12 per cent). The Minister of Canadian Heritage is responsible for certifying whether a film or video production meets certain prescribed Canadian content rules. For more information, visit the Heritage Canada Guide to Federal Programs for the Film and Video Sector and the Canada Customs and Revenue Agency Film Tax Credit Programs Web page.
Canadian International Trade Tribunal (CITT) (Tribunal canadien du commerce extérieur (TCCE)).
The body responsible under Canadian legislation for findings of injury in anti-dumping and countervailing duty cases and the provision of advice to the government on other import issues. For more information, visit the Canadian International Trade Tribunal Web site.
Canadian Life and Health Insurance Compensation Corporation (CompCorp) (Société canadienne d'indemnisation pour les assurances de personnes (SIAP)).
A private, non-profit corporation that was established in 1990 by the life insurance industry. It is funded by the industry and provides Canadian policyholders with compensation coverage against loss of policy benefits in the event of the insolvency of their insurance company. For more information, visit the CompCorp Web site.
Canadian Payments Association (CPA) (Association canadienne des paiements (APC)).
A financial network that was established in 1980 under the Canadian Payments Association Act to operate a national clearing and settlement system. The network includes the cheque payment system, the Visa and MasterCard credit card systems, the automated teller machine and debit card networks of Interac, and the separate clearing systems for debt and equities and for mutual funds. Its membership is made up of the chartered banks, trust and loan companies, government savings institutions and major credit unions. For more information, visit the Canadian Payments Association Web site.
See also payments system; trust company.
capital account (balance des capitaux).
A measure of the sales and purchases of assets, such as direct investment (e.g. the purchase of a factory) or portfolio investment (e.g. the purchase of stocks and bonds), between Canada and the rest of the world. If Canada has a current account deficit, it must be financed by either selling Canadian assets to foreigners or borrowing from foreigners, typically in the form of government bonds. Canada typically runs a current account deficit. This requires a capital inflow, which increases our overall foreign indebtedness.
capital cost allowance (CCA) (déduction pour amortissement (DPA)).
A tax deduction for business-related capital property that provides for the depreciation of these assets. Businesses can deduct up to a fixed percentage of the depreciated cost each year. There are approximately 40 CCA classes described in the regulations to the Income Tax Act. The CCA rate applicable to each class is usually intended to reflect the economic life of the assets of that class. Where the CCA rate is clearly in excess of that required to reflect the economic useful life, it can be considered to be an accelerated CCA.
capital gain (gain en capital ou plus-value).
An increase in the money value of a capital asset such as a share, bond, parcel of land, antique or other asset, which results in a profit if the asset is sold. If a share is bought at $26 and sold at $30, there is a capital gain of $4.
See also taxable capital gain.
capital tax (impôt sur capital).
The federal government taxes the capital of all large corporations (large corporations tax) and of large financial institutions (financial institutions capital tax). The financial institutions capital tax acts as a minimum tax and ensures that large financial institutions pay tax every year. All provinces levy capital taxes on financial institutions and seven provinces levy a capital tax on other corporations. Provinces rely more heavily on corporate capital taxes than the federal government.
closely held bank (banque à participation restreinte).
A bank in which a single shareholder can own more than 10 per cent of outstanding shares. Typically, a closely held bank is controlled (but not necessarily 100-per-cent owned) by a single shareholder. A common example would be a domestically incorporated subsidiary of a foreign bank, controlled by the parent institution.
Note: On June 25, 1999, the government released its new policy framework for the financial services sector and indicated its intention to amend the definition of closely held so that it applies to any institution that is not required to be widely held as defined in the entry for widely held bank. For further information, consult the Department of Finance publication Reforming Canada's Financial Services Sector - A Framework for the Future.
coercive tied selling (vente liée avec coercition).
A practice that imposes undue pressure, or coerces a person to obtain a product or service from a bank and any of its affiliates, as a condition for obtaining a loan or any other product from that same bank. Section 459.1 of the Bank Act, which was proclaimed in September 1998, prohibits coercive tied selling in sales contracts.
Securities such as bonds, shares, insurance policies, or other valuable property that are pledged against a loan. If the borrower fails to repay the loan, the creditor can sell the collateral assets to recover the money.
commercial paper (effet ou papier commercial).
Short-term debt securities issued by non-financial corporations.
- The adoption of a commercial approach to the delivery of public services. Commercialization helps to improve services by increasing responsiveness and reducing costs while protecting the public interest. It can also involve cost recovery from users. Commercialization has been used to improve the management of Crown corporations, mixed private-public enterprises, transfers to other levels of government and privatization. For example, the National Airports Policy leased Canada's 26 busiest airports to local, not-for-profit organizations that manage them towards self-sufficiency.
Competition Bureau (Bureau de la concurrence).
A unit of the federal Department of Industry, headed by the Commissioner of Competition, whose mandate is to ensure that Canadian businesses are in conformity with the laws under its jurisdiction. The Competition Bureau maintains and encourages fair competition in Canada through the administration and application of four statutes: the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act. For more information, visit the Competition Bureau Web site.
The ability to sell goods or services profitably relative to other producers of the same goods or services. A number of factors contribute to competitiveness including technological change, a highly skilled labour force, low inflation and a sound public policy environment. As competitiveness improves, costs are reduced and exports expand across international markets.
compound interest (intérêt composé).
The interest earned on a principal amount, including interest earned in an earlier period. A deposit (or loan) compounded at 10 per cent annually will double in about seven years if no money is taken out (or paid back).
Consolidated Revenue Fund (Trésor).
The general pool of all income of the federal government, such as tax, tariff and licence fee income, and profits from Crown corporations. All money received by the federal government must be credited to this fund and be properly accounted for.
consumer expenditure (dépense de consommation).
Refers to spending by consumers to satisfy personal demands. It is by far the largest share of spending in Canada.
consumer price index (CPI) (indice des prix à la consommation (IPC)).
Measure of price changes produced by Statistics Canada on a monthly basis. The CPI measures the retail prices of a "shopping basket" of about 300 goods and services including food, housing, transportation, clothing and recreation. The index is "weighted," meaning that it gives greater importance to price changes for some products than others more to housing, for example, than to entertainment in an effort to reflect typical spending patterns. Increases in the CPI are also referred to as increases in the cost of living. For more information, visit Statistic Canada's Consumer Price Index Web page
consumption tax (taxe à la consommation).
A tax on consumption purchases of goods and services. Such taxes are levied by both the federal and provincial governments. Federal consumption taxes consist mainly of the goods and services tax (GST) and excise taxes on motor fuel, tobacco products and alcoholic beverages. Provincial consumption taxes consist mainly of retail sales taxes, and provincial taxes on fuel and tobacco products. For more information, visit the Canada Customs and Revenue Agency Goods and Services Tax (GST) and Harmonized Sales Tax (HST) Web page.
Contingency Reserve (réserve pour éventualités).
Funds set aside in the fiscal projections to cushion against changes in the economy. When these reserves are not otherwise used they are applied to the federal debt.
co-operative credit association (association coopérative de crédit).
An association that is organized and operated on co-operative principles, with one of its principal purposes being to provide financial services to its members.
core unemployment rate or natural rate of unemployment (taux de chômage fondamental ou naturel ou non accélérationniste).
The lowest rate of unemployment that can occur before the scarcity of qualified workers will begin to boost wage growth and inflation. The core rate is often thought of as the percentage of the labour force that is either frictionally or structurally unemployed.
corporate tax (impôt des sociétés).
Tax on corporate income in Canada and other taxes and levies paid by corporations to the various levels of government in Canada. These include capital and insurance premium taxes; payroll levies (e.g., health taxes, employment insurance, Canada Pension Plan, Quebec Pension Plan and Workers' Compensation); property taxes; and indirect taxes, such as sales and excise taxes, levied on business inputs. For more general information, visit the Canada Customs and Revenue Agency Business Web page.
cost recovery (recouvrement des coûts).
The full or partial financing of programs or services through fees or other charges. It is applied primarily to services that confer a private benefit.
countervailing duty (droit compensateur).
Additional duties imposed by the importing country to offset government subsidies in the exporting country when the subsidized imports cause material injury to domestic industry in the importing country.
The interest rate specified on a bond when it is originally issued.
credit union (coopérative de crédit).
A co-operative financial institution that is owned by its members and operates for their benefit. Credit unions are subject to provincial regulation and are usually small and locally oriented.
Crown corporation (société d'État).
A corporation wholly owned directly or indirectly by government in lieu of the Crown.
current account (balance courante ou balance des opérations courantes ou balance des paiements courants).
A measure of the flow of goods, services and investment income between Canada and the rest of the world, including merchandise imports and exports, international service transactions, and interest and dividend payments or receipts. If a country receives more money from investments in and the sale of goods and services to the rest of the world than it pays out, it has a current account surplus. Canada has had a surplus in merchandise trade, but a larger deficit in service and investment transactions, resulting in an overall current account deficit. The deficit on investment transactions reflects the need to pay interest and dividends on foreign debt.
cyclical unemployment (chômage conjoncturel).
Temporary downturn in the job market. The most common form of cyclical unemployment occurs when workers are temporarily laid off.