Federal Spending Power in Three Federations: Australia, Canada and the United States

Abstract

This paper will consider and compare the federal spending power in three ‘mature’ federations, Australia, Canada and the United States. One of the issues to be considered will be whether the federal spending power, as interpreted by the relevant courts, is sufficiently broad to deal with the obligations of a central government in current circumstances. In doing so, recurring important issues in fiscal federalism, including the allocation of responsibilities within federal systems and vertical fiscal imbalance, will be noted. The constitutional context in which this issue arises, including the fact that the constitution of each of the countries studied was conceived in times very different from those we face today, and the fact that the role and size of government has similarly radically changed since those times, is important. It is argued that a broad interpretation of the federal government's spending power is needed to provide the necessary constitutional flexibility that would otherwise be forbidden by the formal rigidity of the constitutions and the difficulty in making amendments, particularly in Australia and Canada.