The Politics of Intergovernmental Transfers in Canada: A Survey Experiment

• In Event: Public Attitudes towards Spending and Democracy

Abstract

The COVID-19 crisis has revealed the vulnerabilities of the Canadian health care system. A national conversation about the delivery, coverage, and financing of health care will almost certainly be held after the pandemic. Provincial governments see an obvious solution to the problems facing the health care system they operate: federal transfers for health care, but also for other social programs, must increase to cover rising costs and to respond to citizens’ demands. Unsurprisingly, the federal government sees things differently. A significant increase in transfers entails costs because they lead to higher taxes and/or deficits, whereas the political benefits of higher transfers will be reaped by the provinces, with little federal oversight about how the additional funds are spent. As such, Ottawa prefers conditional transfers focused on specific areas considered as “national priorities” like mental health and long-term care for older people, which have both become more central to the national policy agenda since the beginning of the pandemic.

This paper studies the politics of intergovernmental transfers in Canada by analyzing the alignment of public preferences with the provinces’ (higher unconditional transfers) and/or the federal government’s (moderate and conditional transfers) policy preferences. Using original survey experiments included in two representative surveys of the Canadian population conducted in 2021 and 2022, we study if the public is attuned to the fiscal trade-offs inherent to higher transfers, and if Canadians relate their opinions about intergovernmental transfers to their broader opinions about federalism.

Our preliminary findings suggest that respondents who resent the political, economic and/or cultural position of other provinces prefer lower federal transfers. Outside of Quebec, NDP and Liberal voters are likely to prefer conditional rather than unconditional federal transfers, especially when their provincial government is Conservative. Canadians who prefer a decentralized federation desire higher and unconditional transfers, while those who want to privatize the health care system prefer lower transfers.

This paper makes both theoretical and practical contributions. Whereas several studies have examined preferences for interregional redistribution in Canada, we are the first to develop a theoretical framework to explain preferences about fiscal federalism more generally. Previous studies have established that interregional fiscal redistribution is particularly conflictual, but we find that, despite their lower salience, attitudes toward intergovernmental transfers that are not as explicitly redistributive, such as health care transfers, can also divide the public. Moreover, our study contributes to the broader understanding of the politics of intergovernmental transfers, which is a major issue regarding the balance of power in any federation.

Authors

• Olivier Jacques, University of Montreal, School of Public Health

• Daniel Béland, McGill University

• Sophie Borwein, Simon Fraser University

• André Lecours, University of Ottawa