Government businesses aren't subject to federal income tax.
The Tax Equivalent Regime (TER) ensures competitive neutrality between government businesses and competitors in the private sector.
The TER is part of the Commercial Policy Framework, which outlines the obligations of certain government businesses to pay income tax equivalents.
Quarterly payments are an approximation of the payments that would be made if the business was privately owned. It applies to government businesses that don't fall under the National Tax Equivalent Regime (NTER).
NTER is for larger government businesses and other enterprises, where competitive neutrality issues arise.