Strengthening fiscal responsibility through decentralization

Summary: Canada's constitution lays out a division of powers between the federal and provincial governments. However, there are many policy areas that fall under provincial jurisdiction where the federal government has taken an active role. Similarly, provincial governments delegate certain functions to municipal governments, and both provincial and federal governments often intervene in these areas. This overlap creates redundant bureaucracies and weakens political accountability. To increase efficiency and accountability, the federal government should end its role in areas of provincial and municipal responsibility. While simple in theory, eliminating the federal role in these areas would require a rebalancing of fiscal capacity in the country. To devolve its responsibility successfully, the federal government would need to pare back its revenue collection to allow lower levels of government to raise more revenue.