Is It Time To Eliminate Equalization?

I don't know about you but I think it's time to get rid of the pesky equalization program. It is a constant thorn in the side of both the provincial and federal governments. It's basically a wealth transfer program where those so called "have provinces" contribute to the so called "have not provinces." It's an unfair program that we in Alberta have taken a big part of the brunt in having to pay into this socialist scheme.

"TORONTO -- The federal equalization program leads to worse public services in three "have" provinces -- Ontario, Alberta and British Columbia -- while "have-not" provinces maintain gold-plated public services and free-spending governments, say the authors of a new report released Wednesday.

"The evidence presented in this paper strongly suggests that, in many important areas, levels of government services in donor provinces such as Alberta and Ontario are significantly below those that exist in the major recipient provinces," the authors, Ben Eisen and Mark Milke, wrote in the report for the Winnipeg-based Frontier Centre for Public Policy.

They argue Ottawa should freeze the program with an eye toward scrapping it altogether.

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Quebec is the recipient of most equalization payments; it will receive almost $8.4-billion in 2009-10 out of a total equalization budget of $14.2-billion for the six receiving provinces.
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"Equalization was introduced in 1957 to promote comparable public services in all 10 provinces.

The federal program takes federal tax dollars and distributes them to provinces with lower per-capita fiscal capacity.

The formula used to measure fiscal capacity takes account of 33 different revenue sources. A province's fiscal capacity is then measured against the average of five chosen provinces (B.C, Saskatchewan, Manitoba, Ontario and Quebec) and if it is lower, the province will receive equalization.

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"The current system is broken," the report ultimately concludes, "and the equalization program should be abolished or dramatically reformed to reduce the adverse, unintended consequences that the equalization program creates."(h/t) National Post

L. Ian MacDonald, QMI Agency has a very good column on how unequal, equalization is especially when it comes to Quebec. How they actually get more. I like the title of his piece,
Weaning Quebec from Alberta's purse

"As for tuition fees, it’s obvious that Quebec universities suffer from underfunding. Quebec residents pay only $1,700 a year to attend McGill — one of the Top 20-ranked universities in the world, while Ontario students pay three times as much to attend Queen’s or the University of Toronto.

Taxpayers pay the rest, including the taxpayers of Alberta who send $8 billion of equalization payments to Quebec every year.

But there is no evidence that the Charest government has the political courage to raise tuition fees anytime soon, even though it has a permission slip to do so from the youth wing of the Quebec Liberal Party.

Nor is there any evidence that it has the courage to raise day-care fees from $7 a day, when the actual cost is $49 a day — again subsidized by taxpayers, including the voters of Alberta through equalization. (Alberta sends $40 billion a year to Ottawa and gets only $19 billion back from the feds in transfers and entitlements, leaving $21 billion in equalization from Ottawa to the recipient provinces, which now include Ontario).

So Quebec, with 20% of the kids in the country, has 50% of all the day-care spaces in Canada."

I for one am sick and tired as an Albertan having to pay for social programs in Quebec especially right now. We have our own problems to take care of. We have a big budget deficit hole we need to dig our selves out of. Our health care is suffering, our education system is broken, our infrastructure is falling apart. We can't do it anymore. Why would they want our money anyway, it comes from dirty oil after all.