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Canada Assistance Plan. v. t. e. In Canada, the federal government makes equalization payments to provincial governments of lesser fiscal capacity so that "reasonably comparable" levels of public services can be provided at similar levels of taxation. [ 1] Equalization payments are entrenched in the Constitution Act of 1982, subsection 36 (2).
Transfer payments are a collection of payments made by the Government of Canada to Canadian provinces and territories under the Federal–Provincial Arrangements Act. [1] Chief among these are the Canada Social Transfer, the Canada Health Transfer and equalization payments. The last of these can be spent however the receiving provinces see fit ...
In Canada, the Government of Canada makes payments to less wealthy Canadian provinces to equalize the provinces' "fiscal capacity"—their ability to generate tax revenues. In 2009–2010, six provinces received $14.2 billion in equalization payments from the federal government.
Canada Health Transfer payments by year since FY2005. Unlike Equalization payments, which are unconditional, the CHT is a block transfer; the funds must be used by provinces and territories for the purposes of "maintaining the national criteria" for publicly provided health care in Canada (as set out in the Canada Health Act).
While Canada's ten provinces and three territories exhibit high per capita GDPs, there is wide variation among them. Ontario, the country's most populous province, is a major manufacturing and trade hub with extensive linkages to the northeastern and midwestern United States. The economies of Alberta, Saskatchewan, Newfoundland and Labrador and ...
Alberta and Saskatchewan have made other efforts to distance themselves from Ottawa. Both have frequently criticized the equalization payment scheme as unfair. In his call for "A New Deal with Canada", Moe has signaled a desire for more control over taxation and immigration, and Saskatchewan has introduced plans to create a provincial police force.
On October 18, 2021, a referendum was held in Alberta, Canada on two questions, whether equalization payments should be eliminated from the Constitution of Canada, and whether the province should observe daylight saving time year-round. [1]
These payments ended and were rolled into the 1967 equalization program intended to "enable each province to provide an adequate level of public services without resort to rates of taxation substantially higher than those of other provinces." [10] In Canada, transfers payments are contentious and equalization formulas are often revised. [10]