Redistributive federalism: Redistributing wealth and income in the Canadian federation

The Government of Canada has been engaged in a massive redistribution of wealth and income from some provinces – usually British Columbia, Alberta and Ontario – to the other provinces and territories. This redistribution has been accomplished through a number of federal government programs that may have been presented to the public as having nation-wide applicability and not necessarily designed to meet the needs of any particular province or territory. These federal programs are part of a coherent redistributive whole, but each demonstrates how redistribution has been accomplished. They include transfer programs, such as Equalization and Territorial Formula Financing, that have explicitly addressed the horizontal fiscal imbalance. They also include transfer programs like the Canada Health Transfer, the Canada Social Transfer, labour market training and development, and infrastructure that have implicitly moved federal fiscal resources to various regions of the country. And they include direct federal spending programs like Employment Insurance, immigrant settlement and regional economic development. The extent of this redistribution is discussed, as are the reasons for this redistributive focus and the impact of such large-scale federal transfers on provincial budgets. Finally, an assessment is made of why the degree of redistribution appears to have been reduced in recent years. Sommaire Le gouvernement du Canada s'est engage dans une redistribution massive de la richesse et des revenus venant de certaines provinces – generalement la Colombie-Britannique, l'Alberta et l'Ontario – aux autres sept provinces et trois territoires. Cette redistribution a ete realisee grâce a un certain nombre de programmes du gouvernement federal qui ont pu etre presentes au public comme etant applicables a l'ensemble du pays, mais qui n'etaient pas necessairement concus pour repondre aux besoins d'une province ou d'un territoire particulier. Ces programmes federaux font partie d'un ensemble de redistribution coherent, mais chacun demontre comment la redistribution a ete realisee. Ils comprennent des programmes de transfert, comme les programmes sur la perequation et la formule de financement des territoires, qui se sont attaques explicitement au desequilibre fiscal horizontal. Ils comprennent egalement des programmes de transfert comme le Transfert canadien en matiere de sante, le Transfert canadien en matiere de programmes sociaux, la formation et le perfectionnement pour le marche du travail, et l'infrastructure, qui ont implicitement deplace des ressources fiscales federales vers diverses regions du pays. Ils comprennent aussi des programmes de depenses federales directes comme l'assurance-emploi, l'etablissement des immigrants et le developpement economique regional. Le present article examine la portee de cette redistribution, ainsi que les raisons de cette importance accordee a la redistribution et les consequences des transferts federaux d'une telle envergure sur les budgets provinciaux. Enfin, l'article offre une explication au fait que le degre de redistribution semble avoir ete reduit ces dernieres annees.