Certain measures were taken to correct fiscal imbalance. In 2004, the money injected into health care partly addressed the fiscal imbalance, but three weeks later, the equalization formula was weakened. It was caped so that it could not be increased anymore if cuts were made. So that made it worse. We have to restore equalization and find the right way to fund transfers to the provinces. As for me, I believe that this should be done through tax points. The current government seems to want to withdraw from the GST; it will reduce it by 2 percentage points. The government could choose to reduce it by a further point which it would give to taxpayers. The four remaining points could be given to the provinces. As a counter measure, the provinces could wave federal transfers for social programs and make other concessions. It's a political negotiation.
On October 25th, 2006. See this statement in context.