The issue of this paper is the argument between centralized and decentralized systems in the nation of Canada and which system should be put in place. In this paper, I shall focus on the concept of decentralization in reference to Canada and its politics. It shall distinguish decentralization in the sense of fiscal federalism, defined for this paper’s purpose as the interaction between the federal, provincial and municipal governments in reference to financial transfers for policy initiatives. This paper should also include the reference of nationalism and its impact on the nation and the benefit of using decentralization to find a common ground in a unified nation, this being said through the examples of french nationalism. Lastly the arguments used to associate the innovation of decentralization in smaller local governments and the consequences these governments will have on the issue of being equal. This paper will argue that the Canadian federation should be a decentralized system for the obvious advantages that it brings the nation; seen through economic benefits, public participation and multiculturalism.
The first argument of this paper shall discuss the use of fiscal federalism as a highly beneficial and worthwhile cost for maintenance of policy proposals. As fiscal federalism is defined as “understanding which functions and instruments are best centralized and which are best placed in the sphere of decentralized levels of government” , it will be witnessed that the decentralized use of fiscal federalism is its best use. Fiscal federalism refers to vertical imbalances where the central government gives too much or too little money to lower levels of government. If local governments and private organizations are to carry out decentralized functions effectively, they must have an adequate level of revenues, these being either raised locally or transferred from the central government, as well as the authority to make decisions about expenditures. It can take many forms, including,
“Self-financing or cost recovery through user charges; co-financing or co-production arrangements through which the users participate in providing services and infrastructure through monetary or labor contributions; expansion of local revenues through property or sales taxes, or indirect charges; intergovernmental transfers that shift general revenues from taxes collected by the central government to local governments for general or specific uses; and authorization of municipal borrowing and the mobilization of either national or local government resources through loan guarantees.”
By using fiscal decentralization, there would be a decentralizing of revenue raising and expenditure of monies to a lower level of govenrment while maintaining financial responsibility. Decentralized levels of government have their purpose in the provision of goods and services where the consumption is limited to the different jurisdictions. These...