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Equalization Transfers in Canada: Emerging Challenges

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  • Prakash Chandra Jha, Prakash Chandra Jha

Abstract

Since the last one decade or so equalization transfer programme has been a principal source of dispute between federal and provincial governments and among provinces. It has become politically controversial given the lack of predictability, accountability and adhoc change in the formula and use of transfer for electoral purpose, among others. Resource federalism has become another major challenge as provinces are now strongly divided between those that possess natural resources and those that do not. Unlike earlier, the major proportion of Canadian population today resides in equalization receiving have-not provinces. This has had profound consequence on fiscal federalism. The very nature of equalization programme and institution of executive federalism through which transfer is operated are highly politicized. The idea of having a non-partisan and independent body responsible for determining and allocating equalization transfers is resisted by both orders of government. The paper examines these challenges.

Suggested Citation

  • Prakash Chandra Jha, Prakash Chandra Jha, 2017. "Equalization Transfers in Canada: Emerging Challenges," MPRA Paper 82506, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:82506
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    References listed on IDEAS

    as
    1. André Lecours & Daniel Béland, 2010. "Federalism and Fiscal Policy: The Politics of Equalization in Canada," Publius: The Journal of Federalism, CSF Associates Inc., vol. 40(4), pages 569-596, Fall.
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    3. Wallace E. Oates & Wallace E. Oates, 2004. "An Essay on Fiscal Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 22, pages 384-414, Edward Elgar Publishing.
    4. Weingast, Barry R, 1995. "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 1-31, April.
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    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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