This study investigates two problems related to federal support of elementary and secondary education in Canada: dynamic imbalances between the spending responsibilities and taxing powers of the federal and provincial governments, and the inability of different provinces to achieve comparable educational services at similar levels of financial effort. The redistribution of educational funds is explored in relation to four measures of fiscal capacity: personal income, declared income above a "poverty line," taxable income, and the average yield of a representative provincial tax system. Each measure is used to evaluate the impact of three alternative allotment plans for 1960, 1965, and 1970. These allotment alternatives are applied to data for the 10 provinces to assess the impact of federal direct spending and general fiscal transfers on provincial school systems. Analysis of the data shows that direct and indirect federal contributions to education alleviate extreme interprovincial differences in spending per pupil. However, because of the small federal share of total educational expenditures, interprovincial differences in school spending remain substantial. (Author/JG)