In 15 of the last 25 years, one or more provinces with higher living standards received equalization while a province with lower living standards did not, according to a new Fraser Institute study.
It is an interesting paper and nicely done - but the fundamental premise has a major problem. Specifically, the GDP per capita measure is not appropriate in this context.
GDP includes non social transfer program government expenditures so, for example, Ontario's half billion donation to the greens for a recycling plant counts as part of GDP, but Quebec's direct home care subsidies do not. At the margin, therefore, political priorities (and so Not productivity or investment) determine the differences in estimated GDP per capita in each province.
A better approach would be to take the original (circa 1928) equalization ideas and compare the outcomes against what the original actors intended - equalization of educational and (very limited) social/health support across the country. In that context a better measure might be teacher-hours per student (to exclude admin bloating consequent to the woke/die nonsense).
Quebec? No comment on Quebec? ~ $13 Billion dollars annually? I’m lead to believe that Hydro Quebec Revenues are not included in the Equalization formula. How would that change their payments? And PEI receives nearly half a Billion Dollars annually = ~$3,500 per permanent resident. Make it make sense.
If natural resources are to be counted towards certain provinces’ GDP then they should be counted for all. What’s the difference between O&G and hydro electricity other than one is in Alberta and the other in Québec?
Equalization is flawed because it’s used by unscrupulous governments to pander… and perhaps by others to extort… that was never the intent. As the saying goes, we’re all equal, some more than others.
The part which baffles me is how Quebecois are all convinced they are subsidizing Alberta instead of the other way around. The politicians & media in Quebec must have next level propaganda skills.
Much of the premise behind equalization payments is so that low productivity Provinces can adequately finance social programs, especially healthcare.
Where the noble intention falls apart is the rigid enforcement of Canada Health Act that punishes these same Provinces for trying innovative ways to get a handle on the cost side while striving for a better quality healthcare system. This rigid enforcement creates a perverse welfare state of Provinces that muddle along with a failed status quo instead of confronting the real challenges head on.
"Equalization" has always been a Liberal vote buying sceme. Like everything the left does, it's disguised by a duplicitous name and description.
The western provinces are in Confederation to serve as resource colonies.
The commonwealth, in turn, is designed to be resource colonies for Europe.
It is an interesting paper and nicely done - but the fundamental premise has a major problem. Specifically, the GDP per capita measure is not appropriate in this context.
GDP includes non social transfer program government expenditures so, for example, Ontario's half billion donation to the greens for a recycling plant counts as part of GDP, but Quebec's direct home care subsidies do not. At the margin, therefore, political priorities (and so Not productivity or investment) determine the differences in estimated GDP per capita in each province.
A better approach would be to take the original (circa 1928) equalization ideas and compare the outcomes against what the original actors intended - equalization of educational and (very limited) social/health support across the country. In that context a better measure might be teacher-hours per student (to exclude admin bloating consequent to the woke/die nonsense).
Nicely stated!
“Equalization has become untethered from its original purpose.”
Sadly, one could say this about every single other government program, from socialized medicine to unemployment insurance, and Old Age Security.
Quebec? No comment on Quebec? ~ $13 Billion dollars annually? I’m lead to believe that Hydro Quebec Revenues are not included in the Equalization formula. How would that change their payments? And PEI receives nearly half a Billion Dollars annually = ~$3,500 per permanent resident. Make it make sense.
Things most Canadians should question. Again…the Laurentian elite dictate to the federal government. For decades if not more.
If natural resources are to be counted towards certain provinces’ GDP then they should be counted for all. What’s the difference between O&G and hydro electricity other than one is in Alberta and the other in Québec?
Equalization is flawed because it’s used by unscrupulous governments to pander… and perhaps by others to extort… that was never the intent. As the saying goes, we’re all equal, some more than others.
The part which baffles me is how Quebecois are all convinced they are subsidizing Alberta instead of the other way around. The politicians & media in Quebec must have next level propaganda skills.
Can’t disagree there. The Laurentian elite are the determinants if policy in Quebec…over and above the federal government.
Much of the premise behind equalization payments is so that low productivity Provinces can adequately finance social programs, especially healthcare.
Where the noble intention falls apart is the rigid enforcement of Canada Health Act that punishes these same Provinces for trying innovative ways to get a handle on the cost side while striving for a better quality healthcare system. This rigid enforcement creates a perverse welfare state of Provinces that muddle along with a failed status quo instead of confronting the real challenges head on.