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Fiscal Arrangements for Maintaining an Effective State in Canada

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  • Richard M Bird

    (Rotman School of Management, University of Toronto, 105 St George Street, Toronto M5S 3E6; and C D Howe Institute, 125 Adelaide Street East, Toronto, Ontario M5C1L7, Canada)

  • François Vaillancourt

    (Centre de Recherche et Développement en Économique and Département de Sciences Économiques, Université de Montréal, 4610 Connaught Avenue, Montréal, H4B 1X3, Canada)

Abstract

Canada is a large and regionally diverse country. Over the years complex intergovernmental fiscal arrangements have been developed in order to permit relatively uniform treatment of people living in very different provinces. These arrangements have on the whole been successful in delivering services effectively to a diverse population, but they have more likely perpetuated than reduced regional economic inequality. From a political perspective, the results have been equally mixed. The system has worked in that the country has stayed together, grown respectably, and treated most citizens well and surprisingly uniformly. But the way in which this success has been achieved has reduced Canada's ability as a state to cope with the rapidly changing world environment and may, in the end, have strengthened rather than weakened regional separatism. Despite Canada's considerable success to date in adapting its system of fiscal federalism to cope with both political and economic imperatives, it thus remains unclear how long this fiscal juggling act can be continued without some more basic change in political institutions.

Suggested Citation

  • Richard M Bird & François Vaillancourt, 2001. "Fiscal Arrangements for Maintaining an Effective State in Canada," Environment and Planning C, , vol. 19(2), pages 163-187, April.
  • Handle: RePEc:sae:envirc:v:19:y:2001:i:2:p:163-187
    DOI: 10.1068/c0052
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    References listed on IDEAS

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    1. Richard Bird & Pierre Gendron, 1998. "Dual VATs and Cross-Border Trade: Two Problems, One Solution?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 5(3), pages 429-442, July.
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    Cited by:

    1. Étienne Desjardins & Mélina Longpré & François Vaillancourt, 2012. "The topsy-turvy sharing of the gaming tax field in Canada, 1970-2010: provincial payments, federal withdrawal," CIRANO Working Papers 2012s-21, CIRANO.
    2. Ms. Era Dabla-Norris, 2005. "Issues in Intergovernmental Fiscal Relations in China," IMF Working Papers 2005/030, International Monetary Fund.
    3. Richard M Bird & Andrey V Tarasov, 2004. "Closing the Gap: Fiscal Imbalances and Intergovernmental Transfers in Developed Federations," Environment and Planning C, , vol. 22(1), pages 77-102, February.
    4. Valentine, Scott Victor, 2010. "Canada's constitutional separation of (wind) power," Energy Policy, Elsevier, vol. 38(4), pages 1918-1930, April.

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