The Rowell-Sirois Commission In the 1930s, after several provinces had gone bankrupt trying to cope with effects of the Great Depression, the federal government established a Royal Commission on Dominion-Provincial relations (the Rowell-Sirois Commission). In its 1940 report, the Commission concluded that the Constitution did not give the provinces sufficient taxing power to meet their constitutional responsibilities across the social policy areas for which they were responsible (outlined in sections 92 and 93 of the Constitution Act, 1867). The Report of the Rowell-Sirois Commission concluded that while the Depression certainly did make matters worse for the provinces fiscally-speaking, the difficulties the provinces and territories faced were inherently systemic in nature. When they established the Canadian federation, the founding fathers could not […]
This can't be stressed enough: no province "pays into equalization" - all individual taxpayers and businesses pay into the federal government's general revenue fund, from which equalization is just one of many programs funded.
UPDATE: Charts updated with 2015-17 economic data (If you are looking for information about federal transfers to a certain province, or federal expenditures vs revenues in the provinces, please go to either this post for information about all federal transfers to all the provinces, and this post for a closer look at federal revenues and expenditures by province. For some reason, Google always directs people to this post only, which doesn’t really address those issues in detail.) Equalization is the Government of Canada’s transfer program for addressing fiscal disparities among provinces. Equalization payments enable the recipient provinces to provide their residents with public services that are reasonably comparable to the national standard, at reasonably comparable levels of taxation. Not every province […]