Uniform tax distribution in Canada is a tax distribution system that aligns the wealth of the provinces and territories of the Canadian Federation . The goal of the program is “to provide provincial governments with sufficient income to provide public services at a comparable level of quality and taxation”.
Calculation Method
The equalization formula is reviewed every five years to take into account economic changes in each region.
Since 2004 (2005-2006 of the reporting year), the calculation of the “tax burden” per capita for each province was determined and compared with the average tax burden for the previous three reporting years and the average equalization payment for the same period, taking into account the general increase in the annual base by 3 ,five %. Each province that does not reach the average level, for each resident receives the difference between its tax burden and the average for Canada.
Uniform distribution is a federal program funded by the federal government, including through revenue collected throughout Canada. This means that all Canadians, regardless of the province in which they live, contribute to this program. Naturally, the provinces that do not receive these distributions do not want to pay anything.