Fairy tales and facts

Re: “Fiscal fairy tales: Who really pays the bills in Canada?” by Paul Boothe, Opinion, June 14; “Figures and fairy tales,” by David Mitchell, Letters, June 17, and “Albertans pay plenty,” by Iain Hunter, Letters, June 19. Paul Boothe’s column on equalization payments in Canada was quickly followed by two letters to the editor. Boothe wrote about the fiscal fairy tales dealing with equalization funding; David Mitchell and Iain Hunter proceeded to create more fairy tales. Let’s look at what is fact and what is fairy tale.

Fact: Boothe is correct in stating that individual citizens, not the provinces, pay for the equalization program. The money comes from citizens who earn more than a certain income, regardless of where they live in Canada. The federal tax rates are the same for all citizens. Many Canadians are confused about this since premiers such as Alison Redford talk as if the money is coming out of provincial coffers.

Fairy tale: Although Boothe states that Ontario residents pay the most into the program ($6.4 billion), Alberta residents paid $2.7 billion despite the fact that Alberta has less than one-third of Ontario’s population. Boothe makes no attempt to look at per capita contributions.

Fact: This is precisely what Iain Hunter does, stating that Albertans contribute $692 each (depending on population figures) while Ontario residents contribute $474 each.

Fairy tale: Hunter then states that this is a net of $237 per capita for Ontario residents after one deducts the $3.2 billion Ontario receives in equalization payments. This conclusion is misleading because he is deducting apples from oranges. The $474 per capita is what Ontario residents pay into the program. They pay that money and do not get any back, unless they are eligible for the programs receiving the money or the payments end up in general provincial revenues.

David Mitchell arrives at similar conclusions based on slightly different population figures. However, both Hunter and Mitchell compound the problem by calling this money federal tax revenue instead of calling it federal revenue going into the equalization program, as Boothe stated originally. Actually these funds are just a small portion of total federal tax revenue.

What are the lessons here? First, one can prove anything with statistics. Second, by presenting ambiguous information, the writers allow readers to arrive at incorrect conclusions.

Robert Price, Edmonton