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Renegotiating Equalization : National Polity, Federal State, International Economy

By Courchene, Thomas J.

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Book Id: WPLBN0000690988
Format Type: PDF eBook
File Size: 207.00 KB.
Reproduction Date: 2006
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Title: Renegotiating Equalization : National Polity, Federal State, International Economy  
Author: Courchene, Thomas J.
Language: English
Subject: Government Canada, Political science, Administration
Collections: Canada Government Collection
Publication Date:
1998 Sep. 24
Publisher: C.D. Howe institute


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Courchene, T. J. (1998 Sep. 24). Renegotiating Equalization : National Polity, Federal State, International Economy. Retrieved from

Canada Government Publication:

Summary: In the 1999 renegotiation of Canada?s equalization program, the federation, for the first time, will attempt to come to grips with interregional equity in the context of international competitiveness. What is needed is a set of general design and implementation principles that will allow progress toward reforming fiscal federalism, with a major focus on equalization, while remaining sufficiently flexible to allow alternative paths for the evolution of Canada within the new global order. The most fundamental principle to keep in mind is that Canada is a decentralized federal system, not a centralized federation, let alone a unitary state. Thus, recent attempts to develop a case for a much more comprehensive and egalitarian approach to equalization, based on a unitary-state/ closed-economy model of the federation, are misguided in that such equalization would undo the fiscal implications of different provincial policy decisions ? surely the very antithesis of federalism. Moreover, a revenue-sharing system that completely ignores the reality of North American (and global) markets, as the closed-economy model does, runs the risk that Canada will commit economic suicide. Two rationales, a federal one and a citizenship one, underlie intergovernmental transfers. Under the first, the provinces must have revenues sufficient to exercise the powers assigned to them under the Constitution. Under the second, Canadians, wherever they live, must have access to certain key economic and social rights; for those rights that fall under provincial jurisdiction, provinces should have access to adequate funds to provide them. The equalization formula thus reflects the federation?s view of what is equitable, appropriate, and acceptable in light of major shifts in political economy.


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