Friday, February 26, 2010

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.


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.

"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.


"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.


  1. Can you imagine what will happen to Quebec if ever it does happen. How will they live in lavish lifestyle and fancy daycares. I believe frmgrl, Quebec will face the biggest reality in life. They will have to go to work and work for longer hrs, the way Albertans do.
    Frankly speaking the equalization formula was not a bad thing helping other provinces that are unable to make ends meet.
    However when selfish and greedy provinces in this case, Quebec, demand more and more money or else face a wrath from them in the polls worse yet slap the hand that feed them instead of respectable accepting their money and using it properly rather than lavish lifestyle, has reached the breaking point.

    How will Dalton get out of his own 'have-not' province, if the formula is shut down from coast to coast.

  2. It is especially maddening when you see day after day, Charest complaining and putting down the dirty oil, and then with the other hand grabbing the federal handouts coming right from the sale of that dirty oil. With that money they 1) Fill the "war chest" up in Quebec City (it is now over 2 trillion dollars) to carry them over the first few years after separation, 2) Subsidize social programs (like the "5 dollar a day daycare")... it's a damn shame. And McSquinty, thanks for putting Ontario in the same category!

  3. I agree with Jen the equalization program has good point. I think we should keep the program and cut quebec off their "special" share. If they whine and bitch (which they will do) hold a referendum in the rest of Canada and vote them out of our country. For those folks that say quebec is part of Canada. Let quebec prove it by accepting the same standards as all the other provinces.

    Rob C

  4. We need to invent a new tool . . . one that easily breaks the "entitled to my entitlements" lip-lock on the public teat that is the result of Equalization.

    Large pry bar, some vaseline . . .

  5. I don't agree with equalization, as it really is nothing more than a form of socialism. Having said that, cancelling it at this point would be radioactive. The risk is too high. If it were carried out by a conservative government, they would lose votes where they need them and gain them where they don't. The Tories don't need to increase their vote share in Alberta. But they need votes in Quebec.

    I have had a number of complaints about la belle province in my lifetime, but they are unquestionably part of my Canada.

  6. If we could only keep more of our money wouldn't that be excellent. I think we should put Quebec on a diet, you only get the money if you reduce your spending on socialist programs first.

  7. Iceman. What has quebec done lately to show their desire to be part of Canada??

    Rob C

  8. CAn any one explain how a Quebec still qualifies as a have-not province but has vast resources such as mining and mineral, pulp and paper lumber industry, hydro electricity, pharmaceuticals, aviation - both manufacturing and maintaining aircraft, railway manufacturing, liesure equipment such as skidoo, seadoo, johnson-Evenrude outboards, mapel syrup, agriculture including dairy, poultry,hHead offices of major airlines and banks????

    --Alberta Bob-- an ex Quebecer circa 1970


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