Restoring Fiscal Equilibrium in the Canadian Federation: The Strides of the Harper Government

Abstract

The Canadian federation is by no means a fiscal equilibrium and this imbalance has been a growing area of weakness for decades. However, the Harper Conservatives have acknowledged Canada’s fiscal imbalance and have placed it as a top priority for their government. Since 2006 Harper and his government have committed, and followed through with, several significant efforts towards fixing Canada’s fiscal imbalance through measures included in both the 2006 and 2007 federal budget plans. No other government in decades has taken such measures and actions to meet this goal. The paper begins by describing how Canadian fiscal relations have evolved into what has been termed the fiscal imbalance. The paper then outlines the actions the Harper Conservatives have taken to properly address the imbalance since 2006; including both the vertical and horizontal fiscal imbalances and the corresponding changes to the CST, CHT, the Equalization Program and the TFF. Lastly, the paper discusses the fiscal imbalance in relation to municipal governments and Harper’s initiatives in that area.[...]