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Questioning the Legality of Equalization

Type: Research Studies
Date Published: December 7, 2006
Research Topics:
Law & Judicial System, Government Spending
The inclusion of a commitment to equalization in the Constitution Act, 1982 has led politicians, lawyers, economists, and citizens alike to assume that a federal program transferring money from all Canadian citizens to the governments of some "have not" provinces is a constitutional imperative. This assumption has been used both to justify the redistributive system and to oppose any changes that might limit the amount of the transfers made through the federal program. Before the costs (now nearly $11 billion per year) and benefits of equalization are considered, the basic legal arguments that have supported the program deserve careful scrutiny.

This study uncovers two seldom-discussed problems. First, there is consensus that Canada's constitutional commitment to equalization cannot be enforced by a court of law. Insofar as the commitment is a vague expression of political goals, the action that governments must take to fulfill it is open to debate. Second, this debate over the specific requirements of the Constitution's equalization commitment ignores a more fundamental issue: equalization uses federal revenues to fund spending in areas of provincial jurisdiction. As a result, its legality cannot be resolved without considering the larger question of the federal government's spending power.
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