Some Thoughts On Equalization

The federal government makes equalization payments.
The federal government makes equalization payments.

Our national debates about Canada’s equalization program have been marked by conflict, excessive vitriol and obscure technical jargon, but also reveal little research on the impact of the program, while revealing the federal failure to measure comparability of provincial programming across Canada, the principal stated goal of the program.

Many people have tuned out. They cannot effectively deal with discussions that are inaccessible to them.

That is tragic, because the equalization program negatively affects the lives of all Canadians. Equalization-type arrangements have also been incorporated into other federal programs — ranging from disparate access among provinces to public supports like employment insurance, to disproportionately high levels of federal public-sector hiring in favoured provinces — which also negatively impact many individuals.

Canadians are poorer because of equalization in several ways.

Atlantic Canadians are poorer because equalization has enabled such excessive expenditures on each Atlantic province’s public sector that it should make political leaders in those provinces blush.

In turn, these excessive public sectors have led to high-tax regimes, which mean less money in people’s pockets. They have also produced local economies that are no longer competitive. The four Atlantic provinces are at the bottom of the list of all Canadian provinces and U.S. states in terms of economic growth.

[Interesting Read]

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