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 Key Issues for the Review of Equalization and Territorial Formula Financing
7. Summary of the Panel's Mandate
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Terms of Reference |
What is at stake |
Some Key Questions |
| Evidence-based measures of
• fiscal disparities among provinces
• costs of services in the North
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| Link long-term funding track to fiscal
disparities and northern costs |
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| What indicators of fiscal disparities would
be relevant to evaluating funding levels for Equalization?
What indicators of costs of services would be relevant to evaluating
the funding levels for the TFF?
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| Review allocation of Equalization and TFF
among provinces and territories
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| Dividing up a growing pie set outside the
formula |
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| Are multiple Equalization standards among
provinces reasonable and sustainable? If so, what principles or
evidence should determine how they vary among provinces?
Is the exclusion of some natural resource revenues and user fees
from Equalization consistent with "reasonably comparable treatment"
of receiving governments?
Should Equalization incorporate expenditure need measures?
Should the measurement of expenditure need in TFF be updated, improved
or replaced?
Could aggregate measures (e.g. macro indicators) of revenue capacity
provide a simpler alternative to current methods?
Should the Representative Tax System be retained in whole or in
part? Could one combine both macro and RTS measures?
How can the measurement of revenue capacity from natural resources,
property tax revenues and user fees be improved?
Should the "eligible revenue" calculations for TFF
be updated, improved or replaced?
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| Mechanisms for stability-predictability of
payments
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| Facilitate fiscal planning by provinces
& territories |
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| Should Equalization and TFF payments be made
more stable and predictable?
What is the best way of doing so without undue effects on other
desirable program objectives?
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| Whether to set up permanent commission to
advise on allocation and evolution of disparities and northern costs
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| Transparency
Accountability
Governance
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| Would a permanent advisory commission (or
other mechanisms) significantly improve transparence and accountability
to Canadians?
Is it needed?
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SUMMARY OF KEY ISSUES
- Linking Overall Funding Levels to trends in Fiscal Disparities and
Northern Costs of Services
- What indicators of fiscal disparities would be relevant to evaluating
funding levels for Equalization?
- What indicators of costs of services would be relevant to evaluating
the funding levels for the TFF?
- Allocating the funds according to "reasonably comparable treatment"
of all governments
- Are multiple standards of Equalization among provinces reasonable
and sustainable over the long term? If so, what principles or evidence
should determine how they vary among provinces?
- Is the exclusion of some natural resource revenues and user fees
from Equalization consistent with "reasonably comparable treatment"
of receiving governments?
- Should Equalization incorporate expenditure need measures?
- Should the measurement of expenditure need and eligible revenues
under TFF be updated, improved or replaced?
- Could aggregate (e.g. macro approaches) measures of revenue capacity
provide a simpler alternative to current methods? Should the RTS
be retained in whole or in part? Could one combine both RTS and
macro measures?
- How can the measurement of revenue capacity from natural resources
and property tax revenues be improved under Equalization?
- Improving the Stability and Predictability of Payments
- Should Equalization and TFF payments be made more stable and predictable?
- What is the best way of doing so without undue effects on other
desirable program objectives?
- Transparency, Accountability and Governance
- Would a permanent advisory commission (or other mechanisms) significantly
improve transparency and accountability to Canadians? Is it needed?
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