Accommodation and the politics of fiscal equalization in multinational states: The case of Canada

The politics of accommodation in multinational states sometimes features an important, yet often overlooked, fiscal dimension. In fact, the scholarly literature on the accommodation of nationalist movements emphasizes territorial autonomy, access to power and representation within central institutions, and the promotion of the state national identity, but it is virtually silent on how patterns of territorial fiscal redistribution, and more specifically programs of horizontal fiscal equalization, may contribute to accommodating sub‐state nationalism. This article looks at the Canadian case and analyses the multidimensional relationship between equalization policy and Québécois nationalism. It explains how a key motivation behind the creation of Canada's fiscal equalization program in 1957 was to “end” the institutional and political isolation of Québec and how equalization may have, thereafter, contributed to making Québec's secession less appealing to a good number of Quebeckers than it would have been in the absence of this program. Simultaneously, the article discusses how equalization may have contributed to a certain political backlash against Québec in the other provinces, thus providing mixed evidence in the assessment of the accommodation potential of equalization policy.