Equalization in Canada verses Equalization in Australia Essay

Equalization in Canada verses Equalization in Australia - Essay ExampleEqualization is one of four major federal transfer programs. The others are the Canada health Transfer, the Canada Social Transfer, and the Territorial Formula Financing (the main source of revenue for territorial governments). Equalization is the federal governments main device for reducing fiscal inequalities among the have and have-not provinces (Mapleleafweb).The grant to receive demolishing funding is calculated by a formula assessing each provinces revenue raising ability against a five-province standard. Presently viii Canadian provinces receive equalization Quebec, Nova Scotia, Newfoundland, British Columbia, Prince Edward Island, Manitoba, New Brunswick, and Saskatchewan. This program is the Canadian governments most important initiative for reducing fiscal discrepancies between provinces (Equalization Program). Equalization payments entrust less prosperous bucolic governments to offer their residen ts public services such as hospital fees, electricity, water and other staples that are comparable to those in other provinces and at similar taxation levels. Each province receives unconditional equalization payments. ... For 2005-06 eight provinces are expected to qualify for $10.9 billion in equalization entitlements. The provincial governments may spend the equalization money they receive in any way they desire, unlike conditional transfer payments such as the Canada health and Social Transfer. The equalization payments guarantee equal levels of health care, education, and welfare in all the provinces.Equalization payments do not involve payment transfers from wealthy provinces to poorer provinces. alternatively the federal treasury provides the funds for these payments. In other words, for example, a wealthy citizen from a poorer province like New Brunswick, pays more into equalization than a poorer citizen in wealthy province like Ontario. Since Ontario has a bigger populatio n and wealth, the citizens of Ontario as a whole pay more federal taxes and therefore their total part in equalization payments is greater than that of New Brunswick. Equalization payments also aid by encouraging national unity. Quebec, the most populous of the poorer provinces, is the largest single beneficiary of the payments. 70% of the 10 million Canadians of the poorer provinces reside in Quebec when British Columbia and Saskatchewan are removed. The history of Equalization dates back to Confederation and the Constitution Act of 1867. Two basic principles that Canadas founding fathers based the separation of legislative powers 1) The central government must retain much of its revenue generating power for the purpose of building railroads 2) Coordinate federalism in which provincial governments act independently and autonomously within predefined powers and must be the basis for the division of powers between provinces and the central government. The great