23 MAY 2012

AIMS author proposes new model of equalization that strengthens municipalities

HALIFAX: AIMS latest paper proposes a new model of equalization that involves giving federal transfers directly to individuals, not provinces.

Recently, an informal coalition of non-profits and think tanks came together to put the issue of federal transfers to provinces on the national agenda. The Coalition members include:  the Atlantic Institute for Market Studies, Reseau Liberte-Quebec, Montreal Economic Institute, Canadian Taxpayers Federation, Frontier Centre for Public Policy and Manning Centre for Building Democracy. Each organization is independently publishing commentaries and reports discussing alternatives to the current equalization and transfer scheme.

In AIMS most recent publication, titled Put Our Money Where Our Mouths Are author Juanita Spencer, proposes a new model of equalization that places transfer money directly in the hands of individuals. This option would finally begin to constrain the current national “sense of entitlement” and the ongoing growth of provincial governments funded by the largesse of federal taxpayers. Spencer also highlights the potential that greater taxable revenue in local communities holds for financially strapped municipalities. She urges them to support sending cheques to people not provinces as this opens the door to additional local revenue while at the same time ensuring services are being delivered that meet the specific needs of communities.

“Overstretched provincial and federal budgets have created spending pressures for municipalities,” says Spencer. “With limited taxing capacity and no constitutional authority, municipalities today are struggling. The impact of our declining population will only increase the pressure.”

“By moving both the money and the service redistribution  to the local level, communities could focus on what their residents actually need in specific instances, as opposed to the one-size fits all approach  we see today,” says AIMS President and CEO Charles Cirtwill. “This would meet Canada’s constitutional commitment to ‘make payments’ in support of the principle of comparable levels of service at comparable levels of taxation across the country.”

As the current equalization agreement is set to expire in 2014, the coalition is hoping to shed some light on the problems it creates, and the alternatives that are available, not only for equalization but for the entire system of federal transfers. Put Our Money Where Our Mouths Are is AIMS latest contribution to the coalition’s effort to help policy makers consider new approaches to dealing with the imbalances created by the current system.

Put Our Money Where Our Mouths Are can be found online at:




For more information, please contact:


Charles Cirtwill
President and CEO
Atlantic Institute for Market Studies
[email protected]
ext. 225

Paige MacPherson
Communications Officer
Atlantic Institute for Market Studies
[email protected]            
902.429.1143 ext. 228


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