In this commentary, AIMS Director of Research Don McIver shows how shared cost programs and federal-provincial transfers serve to increase total government spending levels. The way to prevent this is simple: let the level of government that spends the money, raise the revenue.
Rather than provide tax relief to residents, McIver argues that transfer programs, like equalization, have allowed recipient provinces to bolster their revenues—inflating wage and staffing requirements.
As the deadline for reviewing transfer agreements in 2014 approaches, he maintains in Sticky Fingers that now is the time to explore radical reforms to the myriad other national policies that stand in the way of regional economic rejuvenation.
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