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Fiscal imbalance (French, déséquilibre fiscal) is the term used in Canada to describe a monetary imbalance between the Canadian federal government and the provincial governments.
According to the fiscal imbalance theory, the federal government achieved an important surplus by cutting its contributions towards provinces, leaving provinces with responsibilities much too expensive for their resources. The theory was further developed in the "Seguin Report", commissioned by former Parti Québécois (PQ) Premier of QuebecBernard Landry, and completed under former Liberal Quebec Minister of FinanceYves Séguin. The federal government, run by the Liberal Party of Canada until January 2006, denied that this imbalance exists,[1] arguing, in part, that both the federal and provincial governments have access to the same major sources of revenue and that both orders of government face significant spending pressures and limited resources. However, the Conservative Party of Canada recognizes the imbalance. Following their victory in the 2006 federal election in January, they intended a solution be found during their mandate.
A similar situation arose during the Great Depression in the 1920s when the new welfare state severely burdened the provinces, but the federal government continued to run surpluses. This resulted in the 1937-1941 Rowell-Sirois Commission, whose most important result was the removal of restrictions on how provinces could raise money, and the transfer of the expensive Unemployment Insurance program from the provinces to the federal government.
In the past few years, the major issue of fiscal imbalance has been identified by all parties of the National Assembly of Quebec. The Parti libéral du Québec (PLQ) proposes to work with the federal government to solve the problem by increasing federal transfers to Quebec. Yves Séguin, of the PLQ, proposes transferring control of the Goods and Services Tax (GST), a value-added tax, from the federal government to the Quebec government. The PQ holds that independence for Quebec will solve the imbalance, with all powers to impose taxes being once again the jurisdiction of the Quebec government. The PQ proposes to uphold efforts to convince the federal government to give money back to Quebec until then.
All major federal parties but the Liberals recognize a monetary imbalance between the federal government and the provinces, and speak of plans to reduce such. The Bloc Québécois, a sovereigntist party at the federal level, is the strongest denouncer of the situation. Prime MinisterPaul Martin and his federal Liberals prefer to speak of a fiscal "pressure" on provinces, not admitting directly to the responsibility of the Canadian government. In accepting an amendment to the Throne Speech after the 2004 federal election, the federal Liberals officially acknowledged the reality of the situation.
Federal Liberals assert that it is impossible for a true fiscal imbalance to exist, as the provincial governments have access to all the same sources of revenue as the federal government. The problem is not structural, as it was in earlier years, but political. The provincial governments are unwilling to risk their popularity by raising taxes, insisting instead the extra money come from the federal government. The federal Liberals partially blame the situation on the tax cuts introduced by many of the provincial governments.
The potential solution advocated by most of the provincial premiers is that the transfer payments from the federal government to the provinces be substantially increased. This has been occurring gradually as the federal government has regularly been increasing its transfer for health care spending. The Bloc Québécois supports Yves Séguin's suggestion that the GST be given to the provinces. Gordon Campbell, the former premier of British Columbia, has proposed that the federal government take over from the provinces the responsibility for programs that provide pharmaceutical products to low-income people, the elderly and people with disabilities.
^. Archived from the original on 2005-08-28. Retrieved 2005-09-12.
External linksedit
Fiscal Imbalance Debate: Origins and Perspectives | Mapleleafweb.com
Canadian governments Compared
April 17, 2024
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This article has multiple issues Please help improve it or discuss these issues on the talk page Learn how and when to remove these template messages The neutrality of this article is disputed Relevant discussion may be found on the talk page Please do not remove this message until conditions to do so are met December 2012 Learn how and when to remove this template message This article needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Fiscal imbalance in Canada news newspapers books scholar JSTOR February 2009 Learn how and when to remove this template message This article relies largely or entirely on a single source Relevant discussion may be found on the talk page Please help improve this article by introducing citations to additional sources Find sources Fiscal imbalance in Canada news newspapers books scholar JSTOR October 2018 This article possibly contains original research Please improve it by verifying the claims made and adding inline citations Statements consisting only of original research should be removed October 2018 Learn how and when to remove this template message Learn how and when to remove this template message Fiscal imbalance French desequilibre fiscal is the term used in Canada to describe a monetary imbalance between the Canadian federal government and the provincial governments According to the fiscal imbalance theory the federal government achieved an important surplus by cutting its contributions towards provinces leaving provinces with responsibilities much too expensive for their resources The theory was further developed in the Seguin Report commissioned by former Parti Quebecois PQ Premier of Quebec Bernard Landry and completed under former Liberal Quebec Minister of Finance Yves Seguin The federal government run by the Liberal Party of Canada until January 2006 denied that this imbalance exists 1 arguing in part that both the federal and provincial governments have access to the same major sources of revenue and that both orders of government face significant spending pressures and limited resources However the Conservative Party of Canada recognizes the imbalance Following their victory in the 2006 federal election in January they intended a solution be found during their mandate A similar situation arose during the Great Depression in the 1920s when the new welfare state severely burdened the provinces but the federal government continued to run surpluses This resulted in the 1937 1941 Rowell Sirois Commission whose most important result was the removal of restrictions on how provinces could raise money and the transfer of the expensive Unemployment Insurance program from the provinces to the federal government In the past few years the major issue of fiscal imbalance has been identified by all parties of the National Assembly of Quebec The Parti liberal du Quebec PLQ proposes to work with the federal government to solve the problem by increasing federal transfers to Quebec Yves Seguin of the PLQ proposes transferring control of the Goods and Services Tax GST a value added tax from the federal government to the Quebec government The PQ holds that independence for Quebec will solve the imbalance with all powers to impose taxes being once again the jurisdiction of the Quebec government The PQ proposes to uphold efforts to convince the federal government to give money back to Quebec until then All major federal parties but the Liberals recognize a monetary imbalance between the federal government and the provinces and speak of plans to reduce such The Bloc Quebecois a sovereigntist party at the federal level is the strongest denouncer of the situation Prime Minister Paul Martin and his federal Liberals prefer to speak of a fiscal pressure on provinces not admitting directly to the responsibility of the Canadian government In accepting an amendment to the Throne Speech after the 2004 federal election the federal Liberals officially acknowledged the reality of the situation Federal Liberals assert that it is impossible for a true fiscal imbalance to exist as the provincial governments have access to all the same sources of revenue as the federal government The problem is not structural as it was in earlier years but political The provincial governments are unwilling to risk their popularity by raising taxes insisting instead the extra money come from the federal government The federal Liberals partially blame the situation on the tax cuts introduced by many of the provincial governments The potential solution advocated by most of the provincial premiers is that the transfer payments from the federal government to the provinces be substantially increased This has been occurring gradually as the federal government has regularly been increasing its transfer for health care spending The Bloc Quebecois supports Yves Seguin s suggestion that the GST be given to the provinces Gordon Campbell the former premier of British Columbia has proposed that the federal government take over from the provinces the responsibility for programs that provide pharmaceutical products to low income people the elderly and people with disabilities See also editFiscal imbalance Politics of Quebec Politics of Canada 2003 Quebec general election 2004 Canadian federal election Economy of Canada FederalismReferences edit The Fiscal Balance in Canada The Facts from Canadian ministry of Finance Archived from the original on 2005 08 28 Retrieved 2005 09 12 External links editFiscal Imbalance Debate Origins and Perspectives Mapleleafweb com Canadian governments Compared Retrieved from https en wikipedia org w index php title Fiscal imbalance in Canada amp oldid 931108962, wikipedia, wiki, book, books, library,
