A Fiscal Need Approach to Equalization
The existing fiscal equalization program in Canada attempts to equalize per capita tax burden alone and completely ignores the expenditure side. This paper examines the consequences of this neglect both conceptually as well as empirically. The paper concludes that a program of equalization that ignores the expenditure side cannot be defended on economic efficiency and equity grounds. Further, such a program might not be consistent with the constituional intent of equalization in Canada. The paper argues that the present system of equalization in Canada could be improved by explicitly recognizing relative expenditure needs of the Canadian provinces in the formula. The paper implements an objective methodology for measuring these needs and provides tentative calculations based on the proposed approach. The paper concludes that a fiscal needs based program of equalization would differ greatly from the present program in terms of its redistributive impact and further that under such a program the tota amount of equalization transfers made by the Federal Government might also be reduced.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 22 (1996)
Issue (Month): 2 (June)
|Contact details of provider:|| Postal: |
Web page: http://economics.ca/cpp/
|Order Information:|| Web: http://www.utpjournals.com/cpp/ Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anwar M. Chaudry-Shah, 1989. "A Capitalization Approach to Fiscal Incidence at the Local Level," Land Economics, University of Wisconsin Press, vol. 65(4), pages 359-375.
When requesting a correction, please mention this item's handle: RePEc:cpp:issued:v:22:y:1996:i:2:p:99-115. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler)
If references are entirely missing, you can add them using this form.