Them That Has, Gets: The 2007 Federal Budget and Major Intergovernmental Transfers

The 2006 federal Budget acknowledged the need to address a number of provincial-  territorial concerns that had been placed under the label of “fiscal imbalance.”  This paper argues that the steps taken in the 2007 federal Budget to right the imbalance – by establishing a new, formula-based equalization program, strengthening the Territorial Formula Financing program and establishing a new way of contributing to the financing of postsecondary education – will place major obstacles on the road to sustainable prosperity for the smaller resource-poor provinces.  The dynamic implications of the inequities built into the reformed equalization program require greater attention by policy analysts and policy-makers than they have received so far.