Damned if you do …
It’s maddening for Saskatchewanians to see other provinces turn up their noses at the resource industry, while they ungraciously cash the cheques it funds. Premier Brad Wall said what many were thinking when he suggested that proposed pipelines would get approved pretty quickly if they delivered equalization payments. To be honest, his comments were more polite than most Westerners’ thoughts.
Here’s the thing: everyone knows equalization screws over Saskatchewan, but when it comes to the details, it gets a bit foggy. The program is a complex Byzantine labyrinth of federal-provincial bureaucracy. But the results are obvious enough: equalization is bad for Saskatchewan now, but it was even worse for Saskatchewan in the past.
The equalization program’s stated purpose is to ensure that every province has enough money to deliver reasonably equal levels of service in areas such as health care and education. Equalization sounds good, but there’s a wide gulf between intention and result.
This year, the federal government will collect more than $17 billion from Canadians to fund equalization. That means equalization will cost Canadians an average of $488 per person.
Although all Canadians pay into equalization, the distribution of the money is utterly unequal. Quebecers receive about $671 per person over and above what they put in. For Manitobans, it’s about $868. Prince Edward Island tops the list at $1,980 per person. So Saskatchewanians pay $488 each, while Islanders receive $1,980 each.
And despite the goal of providing equal services to all Canadians, equalization leads to some starkly unequal outcomes. Quebec can keep university tuition rates at about half the price students pay in Saskatchewan, partly due to federal money. A family in Manitoba pays about half as much as a family in Saskatchewan for their power bills, partly due to federal money allowing Manitoba to provide lower prices through its Crown power company. Eastern provinces such as New Brunswick can ignore new fracking technology and under-develop its energy resources, partly because federal money will pad its budget anyway.
In other words, equalization forces Saskatchewan families to pay for lower tuition rates in Quebec, lower power bills in Manitoba and a blatant lack of initiative in New Brunswick.
Of course, this issue is awkward for Saskatchewan. It used to cash those equalization cheques, too. Isn’t it hypocritical for us to complain?
The money Saskatchewan now loses through equalization is not the worst injury the program has inflicted on the province — the money it once received was even more harmful. Saskatchewan was a so-called have-not province for a long time. While federal money flowed into Saskatchewan, its population flowed out.
Tragically, throughout that period, vast treasures of oil, gas, potash and uranium remained underdeveloped. There are, of course, many reasons for this sad history. But one factor was the “free” federal money that allowed Saskatchewan to turn a blind eye to tremendous opportunities for too many years. As galling as it is to pay into
Everyone knows equalization screws over Saskatchewan, but the effects were even worse when it was a have-not province
the equalization program, it would be hard to find many Saskatchewanians willing to go back to a time when we were receiving money from the program.
There are persistent rumours that Premier Wall is mastering French to bridge Canada’s linguistic divide. But there is another national duality on which Premier Wall is uniquely qualified to lead: he’s seen Saskatchewan as a have-not, as well as a have province. As the national spotlight brightens on him, Premier Wall has the opportunity address equalization on behalf of all Canadians.