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Responsibility and accountability – to promote territorial fiscal responsibility and accountability for their budget decisions while maintaining the federal government’s accountability for federal-territorial fiscal transfers.
Adequacy and comparability – to provide the territorial governments with adequate funds to provide services that are reasonably comparable to those in other Canadian jurisdictions at reasonably comparable levels of taxation, while reflecting the special circumstances in the challenge of providing programs and services to their residents.
Affordability – to ensure affordability for the federal government and thus sustainability over time.
Predictability – to permit both levels of government to project, with an acceptable level of predictability and certainty, the levels of federal/territorial financing in order to promote orderly long- and short-term fiscal planning.
Neutrality – to provide funding through a neutral mechanism, whereby the level of funding is not subject to the discretionary actions of either the territorial or the federal governments.
Stability – to provide stability of funding to meet the special needs resulting from significant fluctuations in territorial own-source revenues and expenditure caused by changes in economic and fiscal conditions.
Flexibility – to provide flexibility to accommodate changes with provisionsto allow for adjustments to accommodate the implementation of Aboriginal self-government, federal initiatives, and further federal program devolution.
Sound incentives – to avoid disincentives for revenue increases on the part of the territorial governments and to provide appropriate incentives for the territorial governments to promote economic development, expand revenue sources, address social issues and foster self-sufficiency. |
