Redistribution in the Canadian Federation: The Impact of the Cities Agenda and the New Canada

“Redistribution in the Canadian Federation: The Impact of the Cities Agenda and the New Canada” in S. Choudhry, J.-F. Gaudreault-DesBiens & L. Sossin, eds., Dilemmas of Solidarity: Redistribution in the Canadian Federation (Toronto: University of Toronto Press, 2006) 45-56.

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I want to link the debate over redistribution in the Canadian federation to the growing debate over vertical fiscal balance and interprovincial redistribution, which invites Canada to address basic questions regarding the design of the federal-provincial transfer system. My question is whether the existing system of federal-provincial transfer payments, which involves large-scale interprovincial transfers of wealth, is politically sustainable. I want to speculate that in the medium term, it may not. The durability of the existing architecture of fiscal federalism can be attributed to a widely shared understanding of the nature of the Canadian political community, which I have described as the “community of fate”—a community that arises through concrete, historical experiences of interdependence, which support a sense that future well-being is dependent on ongoing cooperation. The community of fate is coming under pressure from two sources. First, the cities agenda may challenge a nation-building project understood to include the building of strong regional communities, including in rural Canada, and replace it with one which holds that in the twenty-first century, Canada’s prospects depend largely on the growth and vibrancy of its principal urban centres. Second, Canada’s increasing diversity and the concentration of that diversity in Canada’s urban centres may create a sense of the “other Canada” as not located in a distinct part of our vast country, but in the growing enclaves of poverty in our major urban centres that are taking on an increasingly racialized character.