4.20.2013

Un-Equalization

Federally-mandated theft has been around as long as Canada has been a nation.
 
Various forms of ‘Equalization’ policies have littered our history, with only the details of source, recipient, and excuse changing.  Always sold in the wrappings of patriotism of helping those provinces suffering economically (and in our early days, possibly justifiable under the circumstances), the system has now become little more than helping those provinces which refuse to help themselves.
 
Thanks to Pierre Trudeau’s 1982 Canada Act which puts Equalization in our Constitution, it is probably here to stay.
 
So is it working?
 
Let’s choose a random ‘have-not’ beneficiary province like, say…Quebec!
 
 
 
 
 
 
Out of the six Canadian provinces on the 2013-14 Equalization Christmas list, la belle province is due to cash in at the top spot with an expected windfall of $7.8 billion dollars.
 
Even with this jackpot, Quebec is expected to run a $1.5 billion deficit for the 2012-13 fiscal year, and is projected to balance the 2013-14 budget thanks in part to a $5 million increase in other federal transfer payments.
 
Keep in mind the fact that a ‘have-not’ province is under no obligation to direct federal transfers to certain areas.  They are free to do spend that money pretty much anyhow they see fit, which has inevitably given birth to regional animosity.
 
When word reached Alberta that Quebec’s daycare costs $7 a day, subsidized with Alberta dollars, it made coffee shop talk.
 
Why should we work hard and pay our taxes so the federal government can funnel that money to pay for Quebec’s daycare while we pay through the nose for daycare in our own province?  Especially at a time when our own inept provincial government has bungled us into a financial hole?
 
Fans of the federal Robin Hood program are always quick to point to the fact that Alberta was, at one time, a ‘have-not’ province that received transfer payments.  Fair and accurate point.  But Alberta took a path of self-determination by developing our natural resources and creating a living provincial economy.
 
Yes, we were blessed with the gift of oil and natural gas, which not all provinces are fortunate to contain.  Only the envious would be narrow-minded to the point of not recognizing the vast number of industries available in Canada, but let’s stay on the topic of oil.
 
For years, the narrative was that Saskatchewan had neither the population nor the resources available to become self-sufficient.  The accepted narrative was that the province was destined to always be the little brother of Confederation.
 
Today, under the leadership of Premier Brad Wall, the Saskatchewan oil industry is booming.  Responsible development and maintenance of this and Saskatchewan’s other industries have resulted in the change from the ‘have-not’ to ‘have’ column.
 
Here’s a fun fact for the Equalization apologists: Quebec has oil.  Lots of it, according to those in the know.  So why would a province, sitting on a potential natural resource goldmine, refuse to take the common sense path of development?
 
Whereas Alberta and Saskatchewan have chosen to move forward, why has Quebec refused?
 
The issue is incentive.  Forms of transfer payments may have had an effective purpose in the establishment and well-being of provinces in our early years, but today it has become the Easy Way.
 
Why put in all that effort and deal with all the hassle? Why lose all that free money?
 
Quebec would have to pay for its own daycare.
 

1 comment:

Rob Low said...

I could not agree more, Leigh; transfer/equalization payments need to be drastically overhauled so Canadians from coast to coast have equal NECESSITIES but that's it. We are subsidizing Quebec's lower daycare costs, university costs, superior health care system and more. It's time to cut the purse strings and let individual provinces figure their own way to better prosperity rather than constantly being propped up by the shrinking minority of provinces actually making the money.

His Name Was Steven