Untangling the Gordian Knot: Regulating Federal Transfers in Canada

Conditional transfers comprise the majority of transfers received by the provinces from the federal government in Canada. The conditions attached to such transfers can afford the federal government a role in provincial matters, but there are no clear guidelines on when conditional transfers are ultra vires the federal government. This article explores the constitutionality of conditional transfers, beginning with an exploration of their past and present role in Canadian intergovernmental relations. It discusses the potential for conditional transfers to enhance federalism, and assesses the shortcomings of the current Canadian approach in facilitating intergovernmental collaboration. Finally, this article explores how courts can increase the compatibility of conditional transfers with federalism by ensuring the transfers are voluntary, consensual, unambiguous, binding, and reasonable.