Federal equalization in Canada

The federal equalization in Canada is a system of transfer of Impôt S making it possible to balance the richness of the provinces and territories constituting the Canadian federation . The program aims to to give to the provincial governments sufficient incomes to put them able to ensure the public services at a level of quality and appreciably comparable taxation .

Way of calculating

The formula of equalization is revised every five years to take account of the economic changes of each area.

Since 2004 (2005-2006), calculation determines a " capacity fiscale" per capita for each province, based on the average of the tax capacities of the three preceding exercises and on the average of the rights of three same years equalization, forced by a total increase of 3,5% on an annual base. Each province under the average receives the difference between this tax capacity and the Canadian average, for each citizen.

For the financial year in 2006-2007, the federal government took a portion of the incomes generated by the provinces of the Ontario, the Colombia-British and the Alberta. This money at summer redistributed with the following provinces: the Quebec, the Saskatchewan, the Manitoba, the Island-of-Prince-Edouard, Ground-New-and-Labrador, the New Brunswick, and the Nova Scotia.

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