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Retention of Federal Fees, etc. by Provinces and Collectors

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DATE: September 20, 1996

TO: Senior Financial Officers, Senior Full time Financial Officers and Departmental Legal Advisors

SUBJECT: Retention of Federal Fees, etc. by Provinces and Collectors

As noted in the June 13, 1996 "Proceedings of the Standing Joint Committee on the Scrutiny of Regulations" at page 6:21, when a province [or others] collect fees under a federal authority [legislation or regulation, etc.], they are acting as a federal delegate and the monies collected are public money with the meaning of the Financial Administration Act. As such, the full amount of the fee must be accounted for as revenue and, in accordance with section 17(1) of the FAA, deposited in the federal consolidated revenue fund.

Where legislative authority exists to enter into an agreement with the province or other collector allowing it to retain or withhold a certain portion as a "commission" or compensation for costs incurred, the full amount of the fee still must be recorded as revenue, and the amount retained or withheld as an expenditure.

One such general authority is paragraph 17(5)(c) of the FAA; however, it's implementation is dependent on changes to the Receipt and Deposit of Public Money Regulations, currently in process. Furthermore, the amount that can be retained or withheld under this authority is limited to fees and commissions, so any agreement would have to describe it in that context; i.e. as either a percentage of the gross fee charged or as a fixed amount per transaction (the preferred approach).

R.J. Neville
A/Deputy Comptroller General

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