Cracks in the Country’s Foundation: the Importance of Repairing Equalization

Abstract

Dramatic variations across provinces in per capita fiscal capacity have created serious problems for Canadian federalism. The Equalization program addresses this challenge but in recent years ad hoc accommodations resulting from a desire to satisfy Newfoundland’s demands have threatened the integrity and coherence of that program. This article argues that the 2006 O’Brien report should be viewed as a welcome attempt at remedying this situation; the article also examines the prospects for its successful implementation.