Criticism
The amount of transfer payments from the federal to the provincial governments is always controversial, particularly in the area of health care, which is of particular importance to Canadians. The premiers of Canadian provinces allege that federal funding has decreased markedly since the beginning of publicly-funded health care, from fifty to sixteen cents of every dollar. The federal government denies this, saying that the provincial numbers ignore tax transfers and that federal funding never amounted to 50% of the cost of health care. The complexity of the funding formula means that each position depends on one's perspective.
Critics of the CHST, CHT and CST note that the programs have allowed the federal government to interfere in areas of provincial jurisdiction by giving Ottawa a powerful hammer (the threat of withdrawing the transfers to any province that displeases the federal government). With the possible exception of Alberta, any province which lost the CHT and CST would quickly face the collapse of its health care system, fiscal impoverishment or perhaps both. Penalties for violation of conditions for receiving the health and social transfers have so far been restricted to cash deductions, as opposed to what would likely be a far more controversial penalty of actually attempting to charge differential federal tax rates in the offending province.
Read more about this topic: Canada Health And Social Transfer
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