The existing fiscal equalization program in Canada attempts to equalize per capita tax burden alone and completely ignores the expenditure side. This paper examines the consequences of this neglect both conceptually as well as empirically. The paper concludes that a program of equalization that...

The Canadian system of equalization is designed to address differences in revenue-raising capacity across provinces, basing a province's annual entitlements on its actual tax bases. However, the standard against which a given province's equalization entitlements are calculated fluctuates from...

Modern public economic theory emphasizes imperfect information as the ultimate constraint on redistribution policy: the needy are hard to identify. To target transfers efficiently, the standard tax-transfer system with its reliance on self-reporting needs to be supplemented by other devices...