The Inequity of Canada’s Equalization Payments

The Niagara Independent – June 29, 2018 – As Parliament recessed for the summer, news leaked out that the Trudeau Government quietly renewed the current federal equalization formula for provinces through the year 2024.

In the 584-pages of 2018 budget documentation, Finance Minister Bill Morneau had buried a provision that extended the existing equalization formula, providing no formal notices to provinces or the public. With the passage of the omnibus budget legislation, stealthily, Morneau unilaterally assured the renewal of the federal-provincial equalization arrangement — to the huge benefit of Quebec, and over the vocal protests of Newfoundland and Labrador, and the western provinces of Saskatchewan and Alberta.

The federal government’s equalization payments are a complex redistribution of federal tax dollars to “have-not” provinces – those provinces requiring assistance to maintain their public services. Equalization is written into subsection 36(2) of the Canadian constitution to ensure provincial governments have “sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.”

Federal equalization dollars are not funds for specific use, but dollars that get placed into the general revenue of “have-not” provinces. The payments have no strings attached. (These payments are not to be confused with the explicit federal transfers to provinces for health, social programs, and infrastructure expenditure programs.)

The federal payments this fiscal year are nearly $19 Billion. Provinces are receiving these amounts: PEI $419 Million, NS $1.9 Billion, NB $1.9 Billon, ON $963 Million, MB $2.0 Billion and QB receives $11.7 Billion. With the current equalization formula, Quebec receives more than 60 per cent of the total paid out. The “have” provinces, Newfoundland and Labrador, B.C., Alberta, and Saskatchewan receive no equalization payments.

The current redistribution of federal tax dollars has prompted calls for a re-calculation of the equalization formula.

  • Tom Osborne, finance minister from Newfoundland and Labrador, says, “When you see other provinces with a smaller geography and a much larger population and are receiving a large portion of equalization payments, I challenge anybody to explain to me how Newfoundland and Labrador is still considered a ‘have’ province.”
  • Alberta Premier Rachel Notley states, “It’s disadvantaging Alberta,” and Opposition Leader Jason Kenney says, “This is a slap in the face to Alberta. It means we will continue to be forced, even when times are bad in Alberta, forced to subsidize public services in other parts of the country where politicians have been trying to block out pipelines and impair our energy industry.”
  • Saskatchewan Premier Scott Moe states, “There are provinces across the nation looking to have this discussion. This is obviously a flawed program.”

In the end, the Trudeau Government ignored these calls for a review by the provincial leaders.

The arguments over the equalization payouts are fanning regional tensions between western provinces and Quebec, particularly this year when Quebecers helped to cancel the Energy East pipeline project. As Alberta Conservative Leader Jason Kenny points out, “We’ve been sending Albertans’ tax dollars to politicians who have opposed our energy industry, which helps to create the wealth transferred through equalization.”

Reflecting westerners’ frustrations, Don Braid, Calgary Herald’s political editorialist, observes “rarely has there been a sneakier ploy… The closest for sheer nose-thumbing gall may be the 1980 meeting of Pierre Trudeau’s cabinet in Lake Louise, to discuss details of the National Energy Program.”

The inequity of the federal equalization formula is underscored when considering the total amounts of federal payments to provinces since 1957 — the year these annual payments were introduced.

NL – $ 25 B

PEI – $ 10 B

NS – $ 47 B

NB – $ 46 B

QB – $ 221 B

ON – $ 19 B

MB – $ 50 B

SK – $ 8 B

AB – $ 92 M

BC – $ 3 B

The figures reveal that in the last 61 years Quebec has received more than half of all equalization dollars. Now the Trudeau Government has assured Quebec receives its cash bonanza for another five years. Saskatchewan Premier Scott Moe is blunt about the unfairness of it all: “Five years of zeroes for Saskatchewan, Alberta, Newfoundland, while Quebec keeps receiving $50-$60 Billion.”

 

Chris George is an Ottawa-based government affairs advisor and wordsmith, president of CG&A COMMUNICATIONS.  ChrisG.George@gmail.com

LINK:  https://niagaraindependent.ca/the-inequity-of-canadas-equalization-payments/

 

 

Identifying “Governmentium”

A research institution announced the discovery of the heaviest element known to science.  The new element has been tentatively named “Governmentium “. Governmentium has 1 neutron, 12 assistant neutrons, 75 deputy neutrons, and 11 assistant deputy neutrons, giving it an atomic mass of 312.

 

These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lepton-like particles called peons.

 

Since governmentium has no electrons, it is inert. However, it can be detected as it impedes every reaction with which it comes into contact. A minute amount of governmentium causes one reaction to take over 4 days to complete when it would normally take less than a second.

 

Governmentium has a normal half-life of 3 years; it does not decay, but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places. In fact, governmentium’s mass will actually increase over time, since each reorganization causes some morons to become neutrons, forming isodopes.

 

This characteristic of moron-promotion leads some scientists to speculate that governmentium is formed whenever morons reach a certain quantity in concentration.  The hypothetical quantity is referred to as “Critical Morass.”

 

Chris George provides reliable PR & GR counsel and effective advocacy. Need a go-to writer and experienced communicator? Call 613-983-0801 @ CG&A COMMUNICATIONS.

 

10 Proverbs for Legislators

  1. Law is a necessary evil.
  2. Pass as few laws as possible, consistent with the demands of justice and the maintenance of order.
  3. Where custom is sufficient, there is no need for law.
  4. Do not pass laws that cannot, or will not, be enforced, for such breed contempt for both the law and the State.
  5. Penalties must be minimally sufficient to deter infractions, given adequate enforcement. Less renders the law ineffective; more inflicts unnecessary pain.
  6. There is an inverse proportion between the severity necessary to deter infractions and the certainty of punishment.
  7. Enshrine your principles in constitutions, codify your common sense in laws, and leave the rest to regulation.
  8. Even more than on your wisdom, the legitimacy of the State depends on your integrity.
  9. In public life, integrity requires not only an honest heart but an honest face.
  10. Your primary object must always be not the satisfaction of your constituents but the continued legitimacy of the State, for upon that depends the welfare, even the survival, of us all.

(ed. – These proverbs are a repost from an earlier By George Journal entry, found here: https://www.bygeorgejournal.ca/?p=896 )

Chris George provides reliable PR & GR counsel and effective advocacy. Need a go-to writer and experienced communicator? Call 613-983-0801 @ CG&A COMMUNICATIONS.

Quotes on Politics, Democracy, etc.

  • What the government is good at is collecting taxes, taking away your freedoms and killing people.  It’s not good at much else. – Tom Clancy
  • It’s important to realize that whenever you give power to politicians or bureaucrats, it will be used for what they want, not for what you want. – Harry Browne
  • Give government the weapons to fight your enemy and it will use them against you. – Harry Browne
  • The State is the coldest of all cold monsters, and coldly it tells lies, and this lie drones on from its mouth: ‘I, the State, am the people’. – Friedrich Nietzsche
  • An oppressive government is much worse than a man-eating tiger. – Confucious
  • It is weakness rather than wickedness which renders men unfit to be trusted with unlimited power. – John Adams
  • If a nation expects to be ignorant and free, it expects what never was and never will be. – Thomas Jefferson
  • A moderate is  either someone who has no moral code  of  his own, or if he  does, then he’s  someone who  doesn’t have the  guts to take sides between good and evil. – Rick Gaber
  • Give a good man great powers and crooks grab his job. – Rick Gaber
  • Overload the police with victimless crimes and other minutiae and eventually only creeps and bullies remain cops. – Rick Gaber
  • Power draws the corrupted; absolute power would draw the absolutely corrupted. – Colin Barth
  • The more prohibitions there are, the poorer the people will be. The more laws are promulgated, the more thieves and bandits there will be. – Lao-tzu
  • Intellect annuls Fate. So far as a man thinks, he is free….The revelation of Thought takes man out of servitude into freedom. – Ralph Waldo Emerson
  • Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. – Frederic Bastiat
  • There is one safeguard known generally to the wise, which is an advantage and security to all, but especially to democracies as against despots. What is it? Distrust. – Demosthenes: Philippic 2, sect. 24
  • People constantly speak of  ‘the government’ doing this or that, as they might speak of God doing it. But the government is really nothing but a group of men, and usually they are very inferior men. – H.L. Mencken
  • Crime does not pay … as well as politics. – Alfred E. Newman
  • Politics is a means of preventing people from taking part in what properly concerns them. – Paul Valery
  • When we give government the power to make medical decisions for us, we, in essence, accept that the state owns our bodies. – Ron Paul
  • …somebody has to take governments’ place, and business seems to me to be a logical entity to do it. – David Rockefeller
  • Government is big business, with the face of democracy. – Jim West
  • Once we roared like lions for liberty; now we bleat like sheep for security! The solution for America’s problem is not in terms of big government, but it is in big men over whom nobody stands in control but God. – Norman Vincent Peale
  • Democracy is when two wolves and a sheep vote on what they will have for lunch. – Anonymous
  • Democracy is defended in 3 stages.  Ballot Box, Jury Box, Cartridge Box. – Ambrose Bierce
  • We’re [United States] not a democracy. It’s a terrible misunderstanding and a slander to the idea of democracy to call us that. In reality, we’re a plutocracy: a government by the wealthy. – Ramsey Clark

Chris George provides reliable PR & GR counsel and effective advocacy. Need a go-to writer and experienced communicator? Call 613-983-0801 @ CG&A COMMUNICATIONS.

 

Quips on politics

 

“I have come to the conclusion that politics is too serious a matter to be left to the politicians.” – Charles de Gaulle

“The word “politics” is derived from the Greek word “poly,” meaning “many,” and the word “ticks,” meaning “blood sucking parasites.” – anonymous

“Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other.” – Oscar Ameringer (the Mark Twain of American Socialism)

“I offered my opponents a deal: “if they stop telling lies about me, I will stop telling the truth about them”.” – Adlai Stevenson (in a campaign speech in 1952)

“A politician is a fellow who will lay down your life for his country.” – Texas Guinan

“Instead of giving a politician the keys to the city, it might be better to change the locks.” – Doug Larson

“We hang petty thieves and appoint the bigger thieves to public office.” – Aesop

“Those who are too smart to engage in politics are punished by being governed by those who are dumber.” – Plato

“Politicians are the same all over. They promise to build a bridge even where there is no river.” – Nikita Khrushchev

“When I was a boy I was told that anybody could become PM; I’m beginning to believe it.” – Quoted in ‘Clarence Darrow for the Defense’ by Irving Stone.

“Politicians are people who, when they see light at the end of the tunnel, go out and buy some more tunnel.” – John Quinton

“What happens if a politician drowns in a river? That is pollution. What happens if all of them drown? That is a solution!” – anonymous

 

Chris George provides reliable PR & GR counsel and effective advocacy. Need a go-to writer and experienced communicator? Call 613-983-0801 @ CG&A COMMUNICATIONS.