Reforming the Federal Fiscal Stabilization Program
The federal Fiscal Stabilization Program is meant to provide financial support for provinces that suffer extraordinary declines in revenues. However, the program only provided $248 million payment to Alberta in 2015-16 in the face of a $8.8 billion decline in revenues, and no support for Saskatchewa...
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University of Calgary
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ftdoajarticles:oai:doaj.org/article:18b1656656004d7f9001b79878226825 2023-06-11T04:14:11+02:00 Reforming the Federal Fiscal Stabilization Program Bev Dahlby 2019-06-01T00:00:00Z https://doaj.org/article/18b1656656004d7f9001b79878226825 EN eng University of Calgary https://journalhosting.ucalgary.ca/index.php/sppp/article/view/68076 https://doaj.org/toc/2560-8312 https://doaj.org/toc/2560-8320 2560-8312 2560-8320 https://doaj.org/article/18b1656656004d7f9001b79878226825 The School of Public Policy Publications, Vol 12 (2019) Political institutions and public administration (General) JF20-2112 article 2019 ftdoajarticles 2023-04-23T00:33:07Z The federal Fiscal Stabilization Program is meant to provide financial support for provinces that suffer extraordinary declines in revenues. However, the program only provided $248 million payment to Alberta in 2015-16 in the face of a $8.8 billion decline in revenues, and no support for Saskatchewan and Newfoundland and Labrador that have also suffered significant revenue reductions in recent years. We discuss the rationale for a Fiscal Stabilization Program, and three principles that should be adopted in re-designing it: · Payments should be based on declines in a province’s own-source revenues from an average of its past years’ own-source revenues · The program should preserve incentives for provinces to maintain prudent fiscal policies by only covering losses that exceed some percentage of “normal” own-source revenues (a deductible) and then only covering a fraction of eligible losses (co-insurance). · Formulas determining payments should be simple and transparent with no adjustment for changes in provincial tax policies that may affect own-source revenues. We propose some alternative formulas, consistent with these principles, for calculating the fiscal insurance payments and show the support levels that they would have provided to the provinces since the mid-1980s. Article in Journal/Newspaper Newfoundland Directory of Open Access Journals: DOAJ Articles Newfoundland |
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Directory of Open Access Journals: DOAJ Articles |
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Political institutions and public administration (General) JF20-2112 |
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Political institutions and public administration (General) JF20-2112 Bev Dahlby Reforming the Federal Fiscal Stabilization Program |
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Political institutions and public administration (General) JF20-2112 |
description |
The federal Fiscal Stabilization Program is meant to provide financial support for provinces that suffer extraordinary declines in revenues. However, the program only provided $248 million payment to Alberta in 2015-16 in the face of a $8.8 billion decline in revenues, and no support for Saskatchewan and Newfoundland and Labrador that have also suffered significant revenue reductions in recent years. We discuss the rationale for a Fiscal Stabilization Program, and three principles that should be adopted in re-designing it: · Payments should be based on declines in a province’s own-source revenues from an average of its past years’ own-source revenues · The program should preserve incentives for provinces to maintain prudent fiscal policies by only covering losses that exceed some percentage of “normal” own-source revenues (a deductible) and then only covering a fraction of eligible losses (co-insurance). · Formulas determining payments should be simple and transparent with no adjustment for changes in provincial tax policies that may affect own-source revenues. We propose some alternative formulas, consistent with these principles, for calculating the fiscal insurance payments and show the support levels that they would have provided to the provinces since the mid-1980s. |
format |
Article in Journal/Newspaper |
author |
Bev Dahlby |
author_facet |
Bev Dahlby |
author_sort |
Bev Dahlby |
title |
Reforming the Federal Fiscal Stabilization Program |
title_short |
Reforming the Federal Fiscal Stabilization Program |
title_full |
Reforming the Federal Fiscal Stabilization Program |
title_fullStr |
Reforming the Federal Fiscal Stabilization Program |
title_full_unstemmed |
Reforming the Federal Fiscal Stabilization Program |
title_sort |
reforming the federal fiscal stabilization program |
publisher |
University of Calgary |
publishDate |
2019 |
url |
https://doaj.org/article/18b1656656004d7f9001b79878226825 |
geographic |
Newfoundland |
geographic_facet |
Newfoundland |
genre |
Newfoundland |
genre_facet |
Newfoundland |
op_source |
The School of Public Policy Publications, Vol 12 (2019) |
op_relation |
https://journalhosting.ucalgary.ca/index.php/sppp/article/view/68076 https://doaj.org/toc/2560-8312 https://doaj.org/toc/2560-8320 2560-8312 2560-8320 https://doaj.org/article/18b1656656004d7f9001b79878226825 |
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1768392008457519104 |