Tombe Trevor Paper 4 for Stablizaing Prov Revenues

There are two main reasons stabilization is so small: (1) there’s a cap of $60 per capita in payments (roughly 1 percent of provincial revenues); and (2) there’s a deductible of 5 percent for non-resource revenues and 50 percent for resource revenues. [...] Consider the words of Mitchell Sharp, former federal finance minister and the person responsible for many of the federal transfer arrangements we have today. [...] But the difference between resource revenues projected at the beginning of a fiscal year in the provincial budget and the final amount actually seen that year after all the accounting is complete is typically 1.3 percent of GDP. [...] Paper 2019 - 04 ã IIGR, 2019 Tombe, Trevor Stabilization Policy in Canada: A Proposal for Reform Page 4 Figure 1: Standard Deviation of Annual Fiscal Capacity Growth Rates, 1982-2017 To be sure, the currently long data lags would necessitate certain assumptions and estimates be made to ensure timely payment during periods of provincial fiscal stress for the purpose of stabilization but this is not. [...] It was not originally a stabilization program, to Paper 2019 - 04 ã IIGR, 2019 Tombe, Trevor Stabilization Policy in Canada: A Proposal for Reform Page 6 be clear, but was instead an attempt to equalize the burden of colonial debt assumed by the dominion government.