In political science and economics, a transfer payment is a payment of money from a government or any other organization to an individual, a group or another order of government for which no good or service is directly required in return. In economics, government transfer payments are often thought of as a negative tax, since in the case of a tax, people pay the government without getting any good or service in exchange.
In Canada, transfer payments usually refer more specifically to a system of payments from the federal government to the provinces. Major Canadian transfer payments include equalization payments, the Canada Health Transfer and the Canada Social Transfer (formerly the Canada Health and Social Transfer) and Territorial Formula Financing .
Other examples of transfer payments might include welfare or scholarships.
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