Equalization payments in Canada

At the dominion–provincial conference held Ottawa in 1941, delegates discussed the report of the Rowell–Sirois commission, which had recommended a major overhaul of federal and provincial powers. In return for unfettered access to personal and corporate income taxes and succession duties, the federal government would assume all provincial debt, take over responsibility for unemployment relief, and allocate equalization grants to the provinces. World War II had concentrated revenues and expenditures in Ottawa; in 1947 most provinces had begun to “rent” their tax revenues to Ottawa in return for compensation. The introduction of a system of equalization payments in 1957 enabled Ottawa to allocate funds to certain provinces in order to reduce regional inequalities.