Intergovernmental Fiscal Relations in Canada.

• Author: Veltkamp, Bernie

Intergovernmental Fiscal Relations in Canada's primary purpose is to update and expand on an earlier study entitled Intergovernmental Transfers in Canada. The publication provides overviews of the existing federal-provincial division of taxing powers and spending and of the existing fiscal arrangements. In order to provide a sufficient understanding for reforms and policy options proposed in the study, the authors explore the economic rationale for intergovernmental transfers, ongoing constitutional debate, the growth of provincial spending responsibilities and the pressures caused by the size of the federal deficit. Subsequent to the printing of this publication, a federal election resulted in a major change in the makeup of Parliament. The ruling Conservative government was replaced by the Liberal government, and the opposition is now composed of two regional parties--the Reform Party, whose candidates were elected from provinces west of Quebec, and the Bloc Quebecois, elected out of the Province of Quebec only. These major changes in government, especially the regionalization of the opposition parties, will undoubtedly result in a major review of the relationships which currently exist between the federal government and the provinces. Intergovernmental Fiscal Relations in Canada will undoubtedly be an extremely useful reference guide for many of the new members of Parliament as they try to gain insight into the running of government. In their book, the authors write that "the federal response to the desires of Quebec and the West, cannot help but affect the shape of federal provincial fiscal relationships." This might be more accurate in the current environment than had been anticipated.

Although the publication provides a historical perspective of the federal-provincial relationship and the evolutionary changes that have resulted in the current arrangement, it also touches on the impact of this relationship on municipal governments. Actual expenditures of the federal...