Accommodation and the politics of fiscal equalization in multinational states: The case of Canada

Abstract

The politics of accommodation in multinational states sometimes features an important, yet often overlooked, fiscal dimension. In fact, the scholarly literature on the accommodation of nationalist movements emphasizes territorial autonomy, access to power and representation within central institutions, and the promotion of the state national identity, but it is virtually silent on how patterns of territorial fiscal redistribution, and more specifically programs of horizontal fiscal equalization, may contribute to accommodating sub‐state nationalism. This article looks at the Canadian case and analyses the multidimensional relationship between equalization policy and Québécois nationalism. It explains how a key motivation behind the creation of Canada's fiscal equalization program in 1957 was to “end” the institutional and political isolation of Québec and how equalization may have, thereafter, contributed to making Québec's secession less appealing to a good number of Quebeckers than it would have been in the absence of this program. Simultaneously, the article discusses how equalization may have contributed to a certain political backlash against Québec in the other provinces, thus providing mixed evidence in the assessment of the accommodation potential of equalization policy.

Refining vote choice in an ethno-regionalist context: Three-dimensional ideological voting in Catalonia and Quebec

“…Its economic success has led to it being a net contributor to the Spanish budget, in much greater proportion to its size. This fiscal imbalance, which the 2006 reform attempted to resolve, has been an important grievance fueling Catalan nationalism (B eland and Lecours, 2014;Guibernau, 2014). Therefore it is understandable that the recent economic crisis was an important issue in the 2012 Catalan elections (Rico and Liñeira, 2014).…”

Ideas, Institutions and the Politics of Federalism and Territorial Redistribution

“…The close to zero-sum nature of equalization payments, 5 combined with the fact that all decisions are made by the federal executive, means that there is an inherent potential for these transfers to become embroiled in the politics of the federation. Canada's multinationalism is crucial to understanding equalization, both in terms of the origins of the programme and the particular pressure on the mechanisms of horizontal fiscal redistribution resulting from Québécois nationalism (Béland and Lecours, 2014).…”

“…Equalization did not stunt the growth of Québécois nationalism. Still, there are reasons to think it may have mitigated the consequences of this nationalism for Canadian federalism, at least when it comes to the secessionist option, since equalization has provided explicit fiscal incentives for Quebeckers to remain Canadian citizens (Béland and Lecours, 2014). Financial and economic issues have always been a weak point for the Québécois secessionist movement.…”

“…In certain provinces, particularly but not exclusively in Alberta, equalization is often depicted by the media and some politicians as a programme that unfairly benefits Quebec 7 . This resentment is linked to five arguments about Quebec and equalization (Béland and Lecours, 2014). The first argument is that Quebec receives too much equalization money.…”

Fiscal federalism and American exceptionalism: why is there no federal equalisation system in the United States?

“…4 Indeed, from this perspective, equalisation gives substance to abstract notions of territorial solidarity through concrete territorial fiscal transfers; it can thus represent a nation-building device (Béland and Lecours, forthcoming;Théret 1999). Yet, there are good reasons to think that equalisation programmes have been used to weaken support for secession in federations where such support exists in constituent units whose wealth is below the country's average.…”