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fiscal imbalance

fiscal imbalance


The idea of a fiscal imbalance comes up regularly at First Ministers Conferences - as a term it applies spin on what would otherwise be described as provincial concerns that federal transfers to provinces are inadequate to support what are supposed to be jointly shared costs for social programs, including health care. The language of a "fiscal imbalance" was adopted by the Bloc Quebecois and the Conservative Party of Canada in 2004, as both parties favor decentralization.

In the Canadian federal election, 2004, the fiscal imbalance was given a temporary new spin by Paul Martin's Campaign - it reappeared as a crusade against waiting times, and provided the cover story by which an increase in federal transfers in September 2004 could be hailed by the Martin Government as a political victory. In October 2004, it was respun to be "fiscal balance", after which the government denied the fiscal imbalance existed.

The provinces and territories argue that they are saddled with an unfair situation whereby the amount of revenue they raise is insufficient relative to their expenditure, whereas the federal government collects more revenue than it
needs relative to its spending obligations. They point to Ottawa’s large budgetary surpluses since 1997 as evidence of this.

The Federal Government Argues that federal transfers have grown steadily, and that provinces are just trying to pass the blame.


health care, federal transfers, equalization payments



sources and resources


Vertical Fiscal Imbalance - Myth or Reality? - IRPP, 1998.

Fiscal Imbalance Government of Quebec, 2004.

Addressing Fiscal Imbalance First ministers Conference, 2001.

The Fiscal Balance in Canada: The Facts Government of Canada, 2004.