Noth­ing equal about equal­iza­tion

The Telegram (St. John’s) - - EDITORIAL -

Here’s a quick primer on the in­equal­ity of equal­iza­tion pay­ments.

The fed­eral govern­ment’s stated goal for the pro­gram is to “en­able less pros­per­ous pro­vin­cial govern­ments to pro­vide their res­i­dents with pub­lic ser­vices that are rea­son­ably com­pa­ra­ble to those in other prov­inces.”

Ot­tawa will hand out $18.3 bil­lion to so called have-not prov­inces through equal­iza­tion next year. That money, of course, comes from tax­pay­ers. Each Cana­dian’s per-capita bill is $503.

While all Cana­di­ans pay into equal­iza­tion, the ben­e­fits are unequal.

The Que­bec govern­ment will col­lect $11.1 bil­lion from equal­iza­tion next year and that means it’s get­ting $828 more per Que­be­cer than the amount av­er­age Que­be­cers pay into the pro­gram. Man­i­to­bans come out ahead by $878 per capita. Nova Sco­tians and New Brunswick­ers av­er­age $1,371 and $1,823 re­spec­tively. Prince Ed­ward Is­land is the big­gest win­ner with a per capita haul of $2,121.

On­tario col­lects some equal­iza­tion money but, af­ter ac­count­ing for the per capita shares of the pro­gram’s costs, it loses $401 per On­tar­ian. Peo­ple in Al­berta, Bri­tish Columbia, Saskatchewan and New­found­land and Labrador pay into equal­iza­tion, but they get noth­ing back and they haven’t got­ten any­thing back for years.

That means a fam­ily of four in Red Deer will pay $2,012 into equal­iza­tion and the Que­bec govern­ment will col­lect $3,312 for a cor­re­spond­ing fam­ily in Chicoutimi. A fam­ily of four in Moose Jaw will pay $2,012 while the Man­i­toba govern­ment will col­lect $3,512 for a cor­re­spond­ing fam­ily in Brandon. A fam­ily of four in St. John’s will pay $2,012, while the P.E.I. govern­ment will col­lect $8,484 for a cor­re­spond­ing fam­ily in Char­lot­te­town.

Those who sup­port the sta­tus quo hide be­hind equal­iza­tion’s com­plex eco­nomic cal­cu­la­tions, but there’s a clear pat­tern: peo­ple in prov­inces with sig­nif­i­cant non­re­new­able re­sources, such as oil and potash, pay for equal­iza­tion, and prov­inces that haven’t de­vel­oped non-re­new­able re­sources col­lect from equal­iza­tion.

For ex­am­ple, Man­i­toba and Que­bec con­tinue to col­lect equal­iza­tion while tak­ing full ad­van­tage of their hy­dro re­sources, but Al­berta and New­found­land get noth­ing from equal­iza­tion be­cause the pro­gram pe­nal­izes them for de­vel­op­ing their en­ergy sec­tors.

Per­haps Ot­tawa could jus­tify si­phon­ing money from prov­inces such as Al­berta and Saskatchewan while their oil patches were boom­ing, but surely the pro­gram will re­flect their strug­gles with de­pressed com­mod­ity prices, right? The re­al­ity is the con­trary. The Saskatchewan govern­ment’s rev­enues dropped by three per cent in 2015-16 com­pared to the pre­vi­ous year. Dur­ing the same pe­riod, New­found­land and Labrador’s rev­enues sank 13.7 per cent and Al­berta’s sank 14.1 per cent. Yet peo­ple in these prov­inces con­tinue to pay into equal­iza­tion and get noth­ing in re­turn.

The lack of logic com­pounds when con­sid­er­ing the sit­u­a­tion of re­cip­i­ent prov­inces.

P.E.I.’S pro­vin­cial rev­enues fell by 4.2 per cent in 2015-16, so maybe

it could make a case for more help. But Man­i­toba’s pro­vin­cial rev­enues went up slightly and it’s get­ting $84 mil­lion more in equal­iza­tion pay­ments. Que­bec’s pro­vin­cial rev­enues went up a healthy four per cent, but its equal­iza­tion cheque will go up by more than a bil­lion dol­lars.

So the prov­inces with grow­ing rev­enues are “less pros­per­ous” by Ot­tawa’s reck­on­ing and need bil­lions in hand­outs that are taken from prov­inces such as Al­berta and New­found­land, which are deal­ing with plum­met­ing rev­enues.

There is no rea­son given to ex­plain why re­cip­i­ent prov­inces need more equal­iza­tion money. And there’s no con­sid­er­a­tion given to the fact that many of the peo­ple that pay the costs are strug­gling.

Ken Kelling­ton,

Devon, Alta.

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