The Ideational Dimension of Federalism: The ‘Australian Model’ and the Politics of Equalisation in Canada

Accommodation and the politics of fiscal equalization in multinational states: The case of Canada

“…For instance, equalization payments have always been based on an assessment of fiscal capacity, with the exclusion of expenditure needs as a fiscal criterion. Finally, the federal government remains in charge of equalization, as both Ottawa and the provinces have rejected the idea of establishing an arms‐length agency that would, like in Australia, make recommendations on payments (Béland and Lecours ).…”

“…For instance, equalization payments have always been based on an assessment of fiscal capacity, with the exclusion of expenditure needs as a fiscal criterion. Finally, the federal Accommodation and Equalization 341 government remains in charge of equalization, as both Ottawa and the provinces have rejected the idea of establishing an arms-length agency that would, like in Australia, make recommendations on payments (Béland and Lecours 2011). In 1982, equalization was enshrined in the Canadian Constitution, where it is described as a key component of the Canadian federation: "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 levels of taxation."…”

“…As explained by historian Penny Bryden (2009), these political shock waves proved instrumental in the creation of the federal equalization program in 1957. As she points out, in the aftermath of Québec's income tax decision, the allocation of "equalization payments, regardless of whether or not a particular province rented its tax fields to the national government, would be a way of ending the isolation of Québec (Bryden 2009: 81) Hence, as a stand-alone program, equalization was created with the implicit objective of moving beyond the fiscal isolation of the only French-speaking province in Canada (e.g., Béland and Lecours 2011;Bryden, 2009;Pickersgill 1975: 309). Early discussions around the creation of a federal equalization program were therefore fed by concerns over the implications for national unity of Québec's autonomist postures.…”

“…Contrary to other federations such as Australia, decisions on equalization payments in Canada are entirely at the discretion of the federal executive. This governance structure allows for the politicization of equalization (on this issue see Béland and Lecours ). As we have just explained, there are good reasons to think that equalization is, among other things, an accommodation mechanism.…”

Ideas, federalism and policy feedback: an institutionalist approach

“…Simultaneously, none of these authors has systematically engaged with this the concept of policy feedback, which is central to historical institutionalism, one of the three main forms of 'new institutionalism', alongside organizational institutionalism and rational choice institutionalism (Campbell, 2004;Hall & Taylor, 1996;Hay & Wincott, 1998). Beyond these well-known researchers, despite some exceptions, both the study of federalism and the analysis of policy feedback are hardly at the centre of the contemporary institutionalist literature on the role of ideas (on federalism and the role of ideas, see Béland & Lecours, 2011;and Benz & Broschek, 2013a; on federalism and policy feedback, see Karch & Rose, 2019). Simultaneously, little has been published about the relationship between federalism and the ideational dimension of policy feedback.…”