Federal provincial fiscal arrangements and shared-cost programs in agriculture

Agriculture Canada is concerned about the funding of agricultural programs as the number of shared-cost federal-provincial programs increase and requests from provinces for special assistance proliferate. Many of these requests are justified on the basis that the provinces do not have the ability to pay or the widespread extent of the problem. This raises questions of the appropriate interrelationships between agricultural programs and the federal-provincial fiscal arrangements. This study is designed to gain a better understanding of the principles involved in the federal-provincial fiscal arrangements and their relevance for agriculture and to establish clearer guidelines in responding to provincial requests. This study examines the basis for federal-provincial fiscal programs and federal transfer programs from a theoretical, legal and historical point of view. It also examines the special case of agriculture and the shared federal-provincial responsibility for agriculture under the constitution. A primary focus is to assess the rationale for special assistance programs for provinces or commodity groups such as those for grain farmers within the context of the overall framework of federal-provincial fiscal relations. The study also examines the fiscal consequences of increasing shared-cost programs in agriculture.