28 June 2018
The Equalization Payments Policy was part of P.E. Trudeau’s 1982 Constitution, designed specifically to turn Canada into a socialistic, welfare state where provinces are forced to share their wealth. Unfortunately, this has encouraged certain provinces to deliberately adopt policies that concentrate on spending & discourages the production of wealth. Some provinces that have natural resources for the production of energy have opted not to exploit those resources but will happily live off the resources of other provinces that do – this is both hypocritical & unfair!! Quebec & the Eastern Provinces have fossil fuel resources which they refuse to exploit but demand to share the earnings of those mined by Alberta & Saskatchewan – no wonder those provinces are complaining – they have every right to complain about being forced to support provinces like Quebec where the citizens enjoy better social services which are paid for by them.
I will include below the links to several articles on this topic. I am particularly pleased to introduce Brian Lilley of CFRA radio station who has an excellent article & an interview with ex-Premier of SK – Brad Wall. Brian was a resident of Quebec & knows the situation very well. He knows, what most Canadians know i.e. Quebec is the main beneficiary of the E.P. policy. This formula for the calculation of the transfer of taxes from “have” to “have-not” provinces is supposed to be negotiated every 3-4 years. Justin Trudeau’s govt. has decided to shelve this till 2024, mainly because Quebec wants to continue to benefit from the current set-up.
Most Western columnists point out that the policy has not worked out well for the country as a whole – it creates dissatisfaction between those who work hard & those who believe that they are entitled to live off those who do. The latter are the “socialists” or the “leftists” who are getting to be heard more & more & include various minority interests. Howard Galganov has an editorial on “Tyranny of the Minority” which is worth reading:
To continue with the topic of the Equalization Payments Policy, I have included two articles that support changing the EP Policy formula to stop the unfairness & one article that wants the situation to remain the same. Have a look at the names & where these writers are from. QC & ON are both provinces which support the idea of fiscal transfers (wealth redistribution), the basis of Socialism. The academic elites of QC & ON have successfully manipulated the 1982 Constitution to empower QC & the people of QC, mainly the Francophones & Quebec now controls the country. The French language has been legislated into a language of power – they are now totally in control in Quebec & NB & are moving very quickly to control ON.
For the last decade, Ontario has fallen under the control of left-wing governments which believe in generous social services & has grown a provincial debt that is insupportable (https://nationalpost.com/news/canada/how-crushing-is-ontarios-312-billion-debt-really). This is mostly the fault of citizens who don’t seem to care who’s paying for everything they want as long as they don’t have to. Fortunately, Ontarians are awake at last & understand that spending more than you earn cannot go on forever. The Ford govt. is now being given a chance to change things. It will not be easy as the situation is really bad in so many portfolios. However, Ontario can benefit from a revised EP formula – read on & find out how.
“There is more Western Alienation right now in Alberta and Saskatchewan,” says Brad Wall, “than I have ever seen.”
Wall, the former Premier of Saskatchewan, is taking time out of his private life to discuss Justin Trudeau’s equalization move on my radio show. It’s a Friday night and like most Canadians, Wall would prefer to be kicking back. Instead he is fired up.
“Maybe it would have been hyperbole to say that a year and a half ago,” Wall said of claims that Trudeau is playing favourites. Now with the demise of Energy East, the killing of Northern Gateway, the special treatment of Energie Saguenay in Quebec and approval of a carbon spewing cement plant with no environmental assessment Wall said many in the West now feel there are rules for Quebec and rules for the rest.
Like many, Wall believes Quebec is getting special treatment with this deal on equalization. The current formula favours Quebec and the three maritime provinces of New Brunswick, Nova Scotia and PEI.
The previous day the Trudeau Liberals announced that the equalization formula would be staying the same until 2024. That puts it not just beyond the 2019 election but beyond the election after that.
In essence, Trudeau and his team have made sure that as long as they are in government, Quebec will continue to get the bulk of the money in equalization while the other three are also rewarded handsomely. Vote Liberal and the money will keep flowing.
Equalization is mentioned in the budget a mere five times. Compare that to the word gender which is mentioned 359 times or innovation mentioned 197 times.
And yet in those five mentions, which discuss extending the program with increased finances, there is no mention that the formula must stay the same. It’s the same with the budget bill.
While Bill C-74 says it extends the fiscal plan and formula until 2024, premiers across the country had been expecting talks and negotiations on the formula in the coming year.
So while the Liberals will point to the budget plan and the bill, any reasonable person could be forgiven for thinking that this was merely extending payments and that the talks on the formula would still happen.
Current Saskatchewan Premier Scott Moe had just this week put forward a proposal on how he wanted to see the formula changed. He expected this to be a discussion at the summer meeting of the premiers.
Moe can be forgiven for thinking that Trudeau wanted to consult with the provinces. After all, the PM kept saying that he was going to be different than Stephen Harper, would engage in dialogue and consultations.
He said it in stump speeches, he said it in an August 2015 letter to Quebec Premier Phillipe Couillard.
“Transfers to the provinces are a very important issue in federal-provincial relations. Unlike Mr. Harper, I do not intend to deal with this issue unilaterally,” Trudeau wrote.
“With regards to equalization, we are completely open to engaging in a dialogue with the provincial governments.”
And yet Trudeau has done none of that.
He unilaterally imposed a new health transfer deal, much like the move Stephen Harper made that Trudeau so loudly criticized. Trudeau is forcing the provinces to enact a carbon tax or he says he will impose one and now he has unilaterally imposed the extension of the equalization formula.
This greatly rewards the areas where Liberals have seats.
Quebec $11.7 billion
Manitoba $2 billion
Nova Scotia $1.9 billion
New Brunswick $1.87 billion
Ontario $963 million
PEI $419 million
Newfoundland and Labrador get nothing and haven’t for years. British Columbia, Alberta and Saskatchewan similarly get nothing. See full details here.
Even though Alberta and Saskatchewan have faced difficult economic times of late.
Please read the rest & listen to the interview with Brad Wall:
Instead of a deadlock of grumbling and silence, Premier Moe’s concrete proposal is a place where the path to something better can start.
Updated: June 26, 2018
Premier Scott Moe discusses equalization at a press conference at the cabinet offices in Saskatoon. Matt Olson / Saskatoon StarPhoenix / Saskatoon
For decades, half of the country has loudly grumbled about Ottawa’s equalization scheme while the other half has remained diligently silent, and neither side has done anything. But Saskatchewan Premier Scott Moe is changing that with a proposal to reform the program.
Premier Moe’s proposal is simple: keep paying out half of the money through equalization’s current formula and pay out the rest as a per-capita transfer to each province.
Let’s compare that to the current scheme.
The federal government will hand out $19 billion to so-called have-not provinces through equalization this year, so each Canadian’s per capita bill is $516.
That’s where the equality in equalization ends. For example, the Quebec government will collect $11.7 billion from equalization and Manitoba will get $2 billion. Prince Edward Island will get $419 million, making it the biggest per capita winner, with the provincial government netting about $2,240 per Islander.
Ontario collects some equalization money, but, after accounting for the per-capita shares of the program’s costs, taxpayers there lose about $449 per Ontarian.
Alberta, British Columbia, Newfoundland and Labrador and Saskatchewan will get nothing from equalization.
Premier Moe’s proposal would change that.
For example, the Saskatchewan government would collect $301 million and Ontario’s take would jump by $3.2 billion.
On the other side, Manitoba would lose $674 million and Quebec would lose $3.7 billion.
Premier Moe’s plan has one benefit: taxpayers would have more of their money stay in their own provinces. That’s important for taxpayers from contributing provinces who have been sending $500 each to distant provincial governments with no accountability year after year. Those long-suffering taxpayers will appreciate the change.
The math is interesting, but the politics in other provinces might give this proposal a chance.
“The program has not worked for Alberta, even during the depths of our recession,” said Alberta Finance Minister Joe Ceci. He promised to review Saskatchewan’s proposal. Alberta opposition leader Jason Kenney, who has threatened to hold a referendum on equalization, called Saskatchewan’s plan a “worthwhile discussion.”
More importantly, equalization reform could be a lifeline for newly elected Ontario Premier Doug Ford. Ontario got hit with another credit rating downgrade before the new premier could even hang pictures in his office. Premier Moe’s proposal includes 3.2 billion reasons for Premier Ford to get Ontario on board for equalization reform.
Continue reading at this link:
Todd MacKay is prairie director of the Canadian Taxpayers Federation.
Premier Moe’s equalization plan would curb redistribution
It is easy to understand why focusing on equalization policy is a winning issue for Premier Moe. It is a way to blame others.
Daniel Béland, Gregory P. Marchildon, Andre Lecours & Rose Olfert
Updated: June 27, 2018
When provincial governments face difficult fiscal situations or see the federal government in a surplus position, a common political response is to find a justification to seek more money from Ottawa.
For example, in the early 2000s, Quebec and other provinces pushed the issue of “fiscal imbalance” onto the agenda to get more money from Ottawa, at a time when the federal government was running large budget surpluses. Today, both Alberta and Saskatchewan face fiscal challenges at home and, predictably, they blame fiscal federalism for contributing to their budgetary problems. Politicians in both provinces have found an easy culprit to mobilize their political base and seek a better fiscal deal with Ottawa: The federal equalization program.
Under the equalization program, required by the 1982 Constitution Act, the federal government has the responsibility to allocate resources from the federal treasury to those provinces whose fiscal capacity falls below the national average. The formula for the redistribution is routinely revised, and a proposal to reform the federal program has been voiced recently by Saskatchewan.
Saskatchewan Premier Scott Moe has put forward what he called a 50-50 formula. According to this new formula, only 50 per cent of the nearly $19 billion now paid as part of the equalization program would be distributed to provinces with a lower-than-average fiscal capacity. The other half of the equalization pool would be distributed across all 10 provinces on an equal per capita basis, unrelated to regional disparities.
Under this proposal, the “winners” would be Alberta, British Columbia, Saskatchewan, and Newfoundland and Labrador, the four provinces that currently do not receive equalization payments. The “losers” would be the six other provinces that currently receive equalization payments, but would then receive less.
From a purely political standpoint, it is easy to understand why focusing on equalization policy is a winning issue for Premier Moe. It is a way to blame others — the federal government (for the current formula) and recipient provinces such as Quebec — for the fiscal challenges facing Saskatchewan.
Although Premier Moe’s plan is dead on arrival because the Trudeau government just renewed the existing equalization formula until 2024, it is worth examination.
Continue reading at this link:
Daniel Béland, Johnson Shoyama Graduate School of Public Policy; Gregory P. Marchildon, University of Toronto; André Lecours, University of Ottawa; Rose Olfert, Johnson Shoyama Graduate School of Public Policy. They are among the co-authors of Fiscal Federalism and Equalization Policy in Canada (University of Toronto Press).
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