Two different forms of regional conflict occur in a federation: conflict of taste and conflict of claim. These conflicts may support each other but not necessarily – they are independent in concept and have different implications for regional tensions. Conflict of taste arises from differences in political preferences amongst populations arising from institutions, historical context and culture. Conflict of claim arises from one region having greater wealth than others and being expected to share it with others. The latter is particularly problematical when the rich region is small and has little influence in determining transfers as large per capita transfers from a small rich are needed to have any significant impact on large populated poor regions. While, both conflicts lead to regional stress and a possible break-up of a federation, conflict of claim can be divisive since it focuses on sharing the pie rather than creating the pie. The concepts are applied to Canada's federation.