Is Atlantic Canada Becoming More Dependent on Federal Transfers?' A Rejoinder

The main focus of our original paper was to examine the relative rate of change in transfer dependence for Atlantic Canada for the period 1962-84. Transfer dependence was measured by the ratio of federal transfers made to a region to federal revenue raised within the same region, quoted as a proportion of the national average of this ratio. The national average ratio was set to 100, and for provinces and regions the number could be greater or less than 100.1 If for a region (or a province) the number was greater than 100 in a given period, that region was said to be more dependent than the average national dependence level. The value of the index, thus computed, was then examined for a trend. Dependence was said to be increasing in a region if, over time, that region's index was increasing. It was obvious from this exercise that while the Atlantic region was relatively more dependent than the average Canadian province, the growth rate in this dependence was lower in the Atlantic region than in the rest of the country. While per capita federal transfers to the region increased at a faster rate than the national average, per capita federal revenue raised from the region increased at an even faster rate compared to the national experience. Dickson and Murrell take our paper on transfer dependence to be a study on regio al dependence, and criticize our framework to be faulty. Then, they suggest their own framework of assessing regional dependence and provide some empirical results. In this rejoinder we shall attempt to show that most of their criticisms are inapplicable, and that their proposed framework has several limitations

Economics · Political science · Canadian Policy and Governance · Fiscal Policy and Economic Growth · Global trade and economics

• Is Atlantic Canada Becoming More Dependent on Federal Transfers

  Vaughan Dickson, David Murrell•Canadian Public Policy•1990

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