Intergovernmental Fiscal Relations Commission
There is an urgent need to re-assess federal, provincial and municipal expenditure responsibilities, tax powers, and intergovernmental transfers in Canada to address looming fiscal imbalances.
To address these ongoing concerns, a steering committee made up of academics and policy researchers from across Canada has proposed an Intergovernmental Fiscal Relations Commission. An independent team of academic experts and policy practitioners from a variety of disciplines across the country will recommend practical reforms to the system of intergovernmental fiscal relations in Canada. Like a Royal Commission, it will take a coordinated deep dive into complex questions; unlike a Royal Commission it would be independent of government appointments or political priorities.
Once established, the Commission will publish research papers, policy briefs and op-eds and make recommendations for the reform of fiscal relations among the federal, provincial and municipal governments within the framework of the existing Canadian Constitution.
The Fiscal Relations Challenge in Brief
Fiscal relations challenges have been a long-standing concern of provincial leaders and at times federal governments. It is a complex and controversial subject that contributes to strained federal-provincial relations. Perceptions of fairness and concerns about sustainability of critical health and social programming are at issue. One on-going concern is that federal transfers are determined by the federal government independently of the provinces, despite their impact on provinces who deliver services within their jurisdiction.
The second challenge is that the current mix of expenditure responsibilities, tax powers and intergovernmental grants is unsustainable. Prior to the Covid-19 crisis, provincial governments were running deficits and increasing debt levels over the longer-term (Parliamentary Budget Officer). As we have seen with the current Covid-19 crisis, the federal government is in a much stronger fiscal position compared to provinces-territories and municipalities to deal with the costs of this response.
The third challenge is that Canada’s fiscal relations ignore the increasingly important role of municipalities. While municipalities are the jurisdiction of provinces under the Constitution, the growth of city states means the role of municipalities cannot be ignored any further.
Professor and Director, McGill Institute for the Study of Canada
Executive Director, Centre of Excellence on the Canadian Federation, IRPP
Vice-President, Canada West Foundation
Senior Fellow, Canada West Foundation, Research Fellow School of Public Policy, University of Calgary
Vaughan Chair, Department of Economics, University of New Brunswick
Professor, Department of Mathematics and Industrial Engineering, Polytechnique Montreal
Former Deputy Finance Minister, Government of the Northwest Territories
Professor, Johnson Shoyama Graduate School of Public Policy, University of Saskatchewan
Adjunct Professor, Public Policy and Administration, Carleton University and Sr Fellow, C.D. Howe Inst.
Nathalie Des Rosier
Principal Massey College, Former Dean, Faculty of Law-Common Law at the University of Ottawa
Director, Institute on Municipal Finance and Governance, University of Toronto
Professor, Department of Economics, University of Toronto
Associate Professor, Lazaridis School of Business, Wilfrid Laurier University
Professor, Department of Economics, University of Calgary
* Steering Group
Advisory Board Members (as of May 2021)
Former President and CEO, Atlantic Provinces Economic Council
Professor Emeritus Department of Economics, Queens University
Former Premier of Quebec and Deputy Prime Minister of Canada
Former Provincial Treasurer, Alberta and Corporate Director
Former Finance Minister of Ontario
Former Premier of BC, Mayor of the City of Vancouver
Former City Manager, City of Toronto
Chair of the Board of OpenText
Director, Max Bell School of Public Policy, McGill University
Former Chief of Staff to Premier Notley of Alberta
Former Clerk of the Privy Council and Secretary to the Cabinet
Briefing Notes, Op-eds, Reports
IMFG Papers on Municipal Finance and Governance
A Seat at the Table: Municipalities and Intergovernmental Relations in Canada
No. 59 | 2022
Reforming Canada’s Intergovernmental Fiscal Relations in a Post-Pandemic World
Draft Proposal – November, 2020