Canada Assistance Plan

The Canada Assistance Plan (CAP) () was a financing program created in 1966 by the Pearson government. The CAP consisted of a cost-sharing arrangement between the federal government and provinces, territories and municipalities whereby the federal government would partially fund eligible social programs.
The 1995 Canadian federal budget announced that both the Canada Assistance Plan and the Established Programs Financing would be combined into a new block-fund fiscal arrangement called the Canada Health and Social Transfer starting in 1996-97 fiscal year. Payments with respect to fiscal years ending on March 31, 1996 or before could be made until March 31, 2000. The Canada Assistance Plan therefore officially remained under existence until March 31, 2000.
Structure.
As of the early 1990s, the Canada Assistance Plan consisted of 3 parts (of which only 2 have ever been enacted):
History.
Cuts to the program (1990s).
The 1990 Canadian federal budget capped the growth of the Canada Assistance Plan at 5% for provinces who did not receive equalization payments for 1990-91 and 1991-92 fiscal years. That decision was incorporated into the "Government Expenditure Restraint Act" (C-69) that received royal assent on . The 1991 Canadian federal budget extended the measure through 1994–95.
The government of British Columbia challenged that provision in courts and the Supreme Court of Canada, in the landmark "Reference Re Canada Assistance Plan (BC)" decision, ruled on that the capping was indeed constitutional.
Further restrictions were applied when the 1994 Canadian federal budget froze CAP payments to their 1994-95 levels for the 1995-96 fiscal year. Unlike the 1990 freeze it applied to all the Canadian provinces, including those who received equalization payments.
Debates.
From its inception the Canada Assistance Plan was under scrutiny from the federal government. As the arrangement was a cost-sharing program and open-ended in nature, the federal government was concerned about an escalation of costs it could not control.
Despite escalating costs in the early 1980s, the Nielsen Task Force on Program Review found that no serious alternative could replace the CAP.