Report | The Road Ahead: Rethinking Fiscal Federalism for the 21st Century

From Confederation to 1949, the Judicial Committee of the Privy Council in England – the ultimate arbiter of constitutional conflicts until the Supreme Court of Canada was made so – created theories of interpretation that sought to limit the power of the federal government, despite what was generally understood to have been the wishes of the framers. [...] Like always, the Court recognized the necessity of responding to national issues such as climate change, but worried about the impact it would have on the “state of the federation.” Dissenting judges, for the most part, emphasized the impact of ambitious federal interventions on the delicate balance of the constitutional arrangement. [...] In part as an attempt to better control the intergovernmental agenda and to speak as a more cohesive voice, the provincial and territorial premiers formed the Council of the Federation in 2003, and while this body might have helped institutionalize relations between provinces, it has not had the same effect on relations between the provinces and the federal government (Wallner 2017). [...] The purpose of Equalization was enshrined in the Canadian Constitution in 1982: The Road Ahead Rethinking Fiscal Federalism for the 21st Century 22 “Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable l. [...] The uneven distribution of emissions and per capita carbon-price revenues across provinces can affect both the size of the program and the allocation of payments to provinces.14 Impacts depend on variations in provincial carbon- pricing policies and how the federal backstop is applied.