Equal­iza­tion in­equal­ity

The Aurora (Labrador City) - - Editorial -

Equal­iza­tion Santa has made his round of the prov­inces, where stock­ings have been hung by the chim­neys with care, leav­ing the req­ui­site sug­arplums for Que­bec, Man­i­toba, Nova Sco­tia, Prince Ed­ward Is­land and New Brunswick.

On­tario was in the lump-of-coal co­hort this year for the first time in a decade, join­ing Al­berta, Saskatchewan, Bri­tish Co­lum­bia and New­found­land and Labrador.

In the­ory, equal­iza­tion is the great equal­izer, en­sur­ing that all prov­inces can pro­vide the same qual­ity of ser­vices to ci­ti­zens taxed at sim­i­lar lev­els, as en­shrined in the Con­sti­tu­tion. That’s the the­ory.

And when it works, it works well.

But it doesn’t work for every­one. One only need con­sider the pre­cip­i­tous state of New­found­land and Labrador’s fi­nances, with record debt of nearly $15 bil­lion and nary of a cent of equal­iza­tion to be had.

One of the fac­tors that af­fects equal­iza­tion is that it takes into ac­count rev­enues that prov­inces gen­er­ate from non-re­new­able re­sources, and — on pa­per — New­found­land and Labrador gen­er­ates high per capita rev­enues. But its ci­ti­zens are also heav­ily taxed.

N.L., along with Al­berta and Saskatchewan, wants changes to the for­mula but fed­eral Fi­nance Min­is­ter Bill Morneau says there has al­ready been ex­ten­sive dis­cus­sion and equal­iza­tion will stay as is for the next five years. It’s doubt­ful any amount of clam­our­ing will change his mind. Should equal­iza­tion be revamped?

It’s easy to feel it should if you are in a prov­ince with a stag­nant econ­omy that does not re­ceive a piece of the pie. And it’s easy to point fin­gers at prov­inces that are ben­e­fi­cia­ries. But no one should be­grudge prov­inces re­ceiv­ing funds they qual­ify for fair and square un­der the ex­ist­ing for­mula.

Que­bec, for ex­am­ple, is get­ting more this year than last, over $13 bil­lion of the $20-bil­lion pot. But don’t let the large num­ber fool you. With roughly one-quar­ter of the coun­try’s peo­ple and a pop­u­la­tion of close to 8.5 mil­lion, equal­iza­tion doesn’t stretch as far in Que­bec as it does in some of the smaller prov­inces that re­ceive it.

Of course, it’s not fash­ion­able to de­fend Que­bec, be­cause equal­iza­tion is fi­nite and di­vi­sive and the only way to get a big­ger chunk for your own prov­ince is to ar­gue an­other de­serves less.

And herein lies the prob­lem. If equal­iza­tion truly needs a re­boot, it can only be ac­com­plished if all prov­inces work to­gether for a fairer pro­gram — and not just to pro­tect their own share.

New­found­land and Labrador Fi­nance Min­is­ter Tom Os­borne made a sim­i­lar ob­ser­va­tion in an in­ter­view last sum­mer with The Cana­dian Press.

“On al­most any other is­sue that’s put on the ta­ble, we work as na­tion,” he said. “But when you’re talk­ing about equal­iza­tion, you have ... 10 prov­inces who each want to pro­tect their own turf. … The spirit and the in­tent of the con­sti­tu­tional obli­ga­tion for equal­iza­tion, I don’t be­lieve, is be­ing lived up to.”

United, we stand.

Di­vided? Some of us will be left out in the cold.

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