Federalism and fiscal transfers

This publication contains commissioned essays on the nature of transfers between the national and subnational levels of government in four developed federalist countries: Australia, the United States, Switzerland, and Germany.Executive summaryOne of the constant pressures within countries organized along federalist grounds, like Canada, is the balance of power between the central and subnational levels of governments—provinces or states. Federalism is a political system whereby a group of jurisdictions has chosen to bind themselves together by covenant. In Canada’s case, provinces voluntarily decided to join the Canadian confederation. Federalism is characterized by a constitution or other binding agreement regarding the rights and powers of each level of government. Disputes regarding tax powers, spending authority, legislated mandates, and regulatory encroachment are but a sample of the many struggles observed on an ongoing basis in federalist countries between the two levels of government.Canada is not immune to these disputes. Surprisingly, however, very little attention has been given in Canada to the ways other federalist countries manage similar strains. This publication contains commissioned essays on the nature of transfers between the national and subnational levels of government in four developed federalist countries: Australia, the United States, Switzerland, and Germany. The aim of the essays is first to understand how other federalist countries transfer resources between the two levels of government as well as between jurisdictions at the subnational level. Second, we hoped for insights into possible improvements in Canada’s arrangements and indications of areas for research in the future