{"id":9740,"date":"2018-07-01T07:13:54","date_gmt":"2018-07-01T11:13:54","guid":{"rendered":"https:\/\/www.bygeorgejournal.ca\/?p=9740"},"modified":"2023-07-24T21:00:26","modified_gmt":"2023-07-25T01:00:26","slug":"the-inequity-of-canadas-equalization-payments","status":"publish","type":"post","link":"https:\/\/www.bygeorgejournal.ca\/?p=9740","title":{"rendered":"The Inequity of Canada\u2019s Equalization Payments"},"content":{"rendered":"

\"\"The Niagara Independent – June 29, 2018<\/em> – 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.<\/p>\n

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.<\/p>\n

The federal government\u2019s equalization payments are a complex redistribution of federal tax dollars to \u201chave-not\u201d provinces \u2013 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 \u201csufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.\u201d<\/p>\n

Federal equalization dollars are not funds for specific use, but dollars that get placed into the general revenue of \u201chave-not\u201d 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.)<\/p>\n

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 \u201chave\u201d provinces, Newfoundland and Labrador, B.C., Alberta, and Saskatchewan receive no equalization payments.<\/p>\n

The current redistribution of federal tax dollars has prompted calls for a re-calculation of the equalization formula.<\/p>\n