In 2024, Newfoundland and Labrador filed a case in the Supreme Court of Newfoundland that the federal government’s current equalization formula violates section 36(2) of the Constitution Act, 1982, which states: “Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.”
The province claimed that the current formula is unconstitutional for a number of reasons, including that service delivery costs are higher for a sparsely-populated province and that the formula arbitrarily limits funding rather than ensuring provinces are “fully funded.” Newfoundland sought a ruling that declares the current formula unconstitutional and requires Ottawa to provide additional payments.
The CCF was granted intervener status to argue that Newfoundland’s claims under section 36(2) were not justiciable: in other words, these were political questions and are not the type of matter that a court can consider. The CCF would have also argued that, if the court were to find a breach of s. 36(2), the only appropriate remedy would have been a declaration rather than an order compelling a different allocation of funds, however, in May 2026, Newfoundland and Labrador discontinued the challenge.
Federal Equalization Formula Challenge (Nfld. v Canada)
CCF Launch: October 21, 2025
Jurisdiction: Supreme Court of Newfoundland
Status: Closed
Next Key Date: Case withdrawn by Province
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