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Revisiting the Séguin report: New research examines a fiscal federalism milestone

January 29, 2025 Print

Montreal — Two decades after the release of the report by the Quebec government’s Commission on Fiscal Imbalance, known as the Séguin Report, the Institute for Research on Public Policy is taking stock of its recommendations and the evolution of Canada’s approach to fiscal federalism.

In a new research paper published by the IRPP’s Centre of Excellence on the Canadian Federation, economist and professor Marcelin Joanis, who was a member of the Séguin Commission Secretariat, looks back on the commission’s work, examines the context in which it was created and contrasts it with the current situation.

In the aftermath of the 1995 referendum defeat, the Séguin Commission proposed ways of reforming Canada’s fiscal federalism. But far from reviewing fiscal arrangements in line with the Commission’s recommendations, the federal government gradually adopted measures designed to make federal transfers predictable from its point of view.

Public finances today reflect the consequences of this chapter, which ended too early and could have led to greater equity, efficiency and accountability not only for Quebec, but also for the other provinces and territories.

“The Séguin Report clarified the notion of fiscal imbalance and identified important issues   flowing from it, such as the exercise of the spending power by the federal government,” says Joanis. “While some changes were made, like tweaks to the equalization formula, many key recommendations remain unfulfilled. Today, provinces still face rising costs, notably in health care, which federal transfers do not really take into account,” he says.

“The issues raised by the Séguin Report remain as relevant today as ever,” adds the Centre of Excellence executive director Charles Breton. “Provinces are shouldering increasing costs for health care and education because fiscal arrangements haven’t kept up. This research highlights how we should continue working on solutions to ensure fairness and collaboration between levels of government,” he says.

Tackling modern fiscal challenges

Joanis’s report also raises questions that are central to Canada’s fiscal future and that could be answered if a similar exercise was carried out today:

  • Should fiscal arrangements account for different spending needs across provinces, rather than just population size?
  • How can natural resource revenues be better integrated into analyses of the type that the Seguin Commission conducted?
  • How can provinces and territories and Indigenous governments be included in the decision-making process?

“Dealing with fiscal imbalances isn’t just about dollars and cents — it’s about making sure provinces can meet their responsibilities to citizens. My report shows that a new exercise looking at Canadian fiscal federalism in all its dimensions needs to be carried out today,” says Joanis.

A call for structured dialogue

One of the paper’s key recommendations is a call for a regular, structured forum to discuss fiscal issues.

“These arrangements are too important to be addressed sporadically and out of the public eye. A consistent dialogue would help governments adapt to changing realities and ensure fairness for all Canadians,” says Breton.

Two decades on, the Séguin Commission remains a strong source of inspiration that

could serve as a starting point if a similar undertaking were held today to provide a renewed reflection on Canadian fiscal federalism.

Media Contact

Cléa Desjardins
Communications Director
514-245-2139 • cdesjardins@irpp.org