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Fiscal transfers have long acted as a sort of glue to preserve the integrity of the Canadian economic union by promoting stability, equality of opportunity and basic services for all, Dodge and his two co-authors wrote in the IRPP publication Policy Options.

But wealth-sharing, enshrined in the 1982 Constitution Act, can cause a variety of problems as the rise of China and ongoing U.S. economic weakness cause Western Canada’s resource-based economies to boom while Central Canada’s manufacturing-based economy struggles.

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Transfers can play a “counterproductive role if they act to mask inexorable structural change, delay necessary adaptation and create the illusion that the unsustainable can somehow be sustained indefinitely,” they write.

“Ultimately they can destroy unity by creating resentment, disrespect and distrust.”

The Dodge essay was one of two in the August issue of Policy Options that painted a grim picture of federal-provincial fiscal relations over the next eight years.

Roger Gibbins, former head of the Canada West Foundation, wrote that New Democratic Party leader Tom Mulcair has only scratched the surface of potential east-west tensions with his recent criticism of the oil sands.

Gibbins suggested that by 2020 Canada could be governed by a party with minimal representation from the West, setting the stage for a federal carbon pricing scheme intended to reduce natural resource exports and consequently drive down the dollar, helping Central Canada’s manufacturers.