La réforme fédérale proposée de la péréquation : le mauvais remède pour l’un des organes vitaux du fédéralisme fiscal canadien

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La réforme fédérale proposée de la péréquation : le mauvais remède pour l’un des organes vitaux du fédéralisme fiscal canadien

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Luc Godbout ()
Suzie St-Cerny

Abstract

This report was generated in the framework of consultations by the Expert Panel on Equalization and Territorial Formula Financing. The study first presents a brief history of equalization and the evolution of its main parameters. The principal issues are discussed next, in particular the volatility of equalization payments, the integration of certain revenue sources, and the revision of standards of comparison. Certain impacts springing from these issues are also illustrated. By analyzing the evolution of equalization over the past ten years, the authors illustrate that gaps between the Canadian provinces in fiscal capacity have become more pronounced while the impact of equalization has decreased. The new equalization framework ensuing from the federal offer of 2004, including the existence of several specific bilateral agreements, is also analyzed. The authors conclude that the new framework must be abandoned and that a reform of the equalization program that respects the initial goals is required. In particular, a return to the ten-province average is recommended, along with backtracking on the fixed global envelope of equalization. Other recommendations address adding a smoothing mechanism and doing away with bilateral agreements.

Cette étude a été réalisée dans le cadre des consultations du Groupe d’experts sur la péréquation et la formule de financement des territoires. Elle présente d’abord brièvement l’historique de la péréquation et l’évolution de ses principaux paramètres. Puis, les principaux enjeux sont discutés, notamment la volatilité de la péréquation, la révision de certaines assiettes et la révision de la norme de comparaison. Certains impacts liés à ces enjeux sont aussi illustrés. En analysant l’évolution de la péréquation au cours des dix dernières années, les auteurs illustrent que les écarts de capacité fiscale se sont accentués entre les provinces canadiennes pendant que, de son côté, l’impact de la péréquation diminuait. Le nouveau cadre de la péréquation découlant de l’offre fédérale de 2004, incluant l’existence de plusieurs ententes bilatérales particulières, est aussi analysé. Les auteurs concluent au rejet du nouveau cadre et à la nécessité de réformer le système de péréquation en gardant les objectifs initiaux. Il est en particulier recommandé de revenir à la norme des dix provinces et de faire marche arrière en ce qui concerne l’enveloppe globale fixe de la péréquation. D’autres recommandations concernent notamment l’ajout d’un mécanisme de lissage et la fin des ententes bilatérales.

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Paper provided by CIRANO in its series CIRANO Working Papers with number 2005s-27.

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Date of creation: 01 Jun 2005
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Handle: RePEc:cir:cirwor:2005s-27

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Find related papers by JEL classification:
H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

This paper has been announced in the following NEP Reports:

NEP-ALL-2005-07-03 (All new papers)
NEP-PBE-2005-07-03 (Public Economics)

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