How can the federal government send money to the various provinces and territories?
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Explanation from Alloprof
This Explanation was submitted by a member of the Alloprof team.
The redistribution of wealth came with the British North America Act of 1867. The federal government, collecting taxes and customs fees from the population and companies of all the provinces, manages more money than them, allowing the federal government to grant subsidies to the provinces. The provinces can, however, count on their own revenues linked to the granting of various permits and the exploitation of the natural resources of their territory.
Since 1957, the equalization system has existed in Canada. This system aims to offer a standard of living that is comparable in all Canadian provinces. With equalization, the Canadian government redistributes the taxes collected from the richest provinces to the poorer provinces in order to balance living standards across the country.
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