Intergovernmental Relations: Fixing the Fiscal Imbalance

In 1867, Canada's largest expenditures were made at the federal level to build a nation-wide infrastructure of transportation and communication. In 2006, our biggest investments are at the provincial level in health, education and servicing our $570 billion debt. But we still divide government revenues up as if we were back in 1867, creating a fiscal imbalance between Ottawa and cash-strapped provinces. The Green Party will push to allocate our financial resources efficiently and ensure that provinces have adequate financial resources to deliver the services that they deliver. Over the years, successive federal governments have recognized the growing funding needs of the provinces to manage social programs by transferring billions of dollars to health, education, child care and affordable housing. In the last decade, however, the federal government has slashed provincial transfers while federal surpluses continue to rise. Recent injections of funding haven't even brought social program transfers back to 1995 levels. This fiscal imbalance between the federal and provincial governments is the cause of a growing disconnect between the priorities of Canadians and the priorities of the federal government. By attaching conditions to its social transfers, the federal government is centralizing power and dictating how the provinces should govern. The Green Party understands that as a federation, Canada and the provinces must work together in order to build a truly cooperative country without coercive funding strategies. Canada must build public support for concerted action, not bully other governments, impose uniformity on provincial diversity, change the rules on a whim, or put its own lofty ambitions ahead of the needs of Canadians. Flexibility and fairness must be the key values in federal-provincial-territorial relations. Green Party MPs will support:

• The federal government's participation in the new Council of the Federation established by the provincial first ministers and a commitment to address the fiscal imbalance openly in Council deliberations.
• A transition to Legislative Federalism: a democratization of intergovernmental relations, bringing federal and provincial elected representatives together to help guide the discussions of intergovernmental decision-making bodies, such as the Canadian Council of Ministers of the Environment.
• Transfer federal tax points to sustain specific social services such as health care on strict provincial guarantees that these funds will be allocated to such services and that such funds will be used to reduce the dependency provincial governments have developed to revenue from gambling.

• The Green Party Vision
• We can build a sustainable Canada
• We can build an inclusive Canada
• We can build a healthy Canada
• We can renew our democracy
• Sustainable fiscal framework
• Fair Taxes
• Intergovernmental Relations: Fixing the Fiscal Imbalance
• Foreign Policy: Keeping the Peace
• Fair Trading with our Global Neighbours