ABSTRACT
Canada and Germany seem to be contrasted cases both in the outlook of the federal fiscal constitution and in the structure of federalism. The description of federal fiscal policy-making in the two contrasted cases has implicitly revealed that all federal fiscal constitutions attempt to respect and promote equity and equality, both in terms of revenue extraction and distribution of resources. The German system has, due to its constitutional article on the equality of life conditions, institutionalised harmonisation as a principle aim in fiscal policymaking. The description of fiscal policies has shown that federal governments have endeavoured to compensate additional spending for demand stimulation purposes or tax credits on one tax item by increasing taxes on another item. The decrease of taxes has been a major fiscal policy instrument in Canada while less so in Germany. Canada has either separate taxes or overlapping taxes. In both cases the federal government faces uncertainty with regard to provincial behaviour.
