Friday, June 02, 2006

Equalization "Compromise": Yeah, Whatever

According to the Globe, Ottawa's long-awaited report on revamping the equalization program will recommend a cap be put on potential payouts to recipient provinces. The report's recommendations appear to be an effort at compromise, intended both to enrich the program and to ensure that Ontario and Alberta are treated fairly...

Yeah, whatever. Let's break this one down politically into small, easily digested pieces.

Tories are revisiting the equalization formula, addressing the "fiscal imbalance", because they see that the path to a majority government goes through Quebec. Hence they are looking to shovel money in the direction of Quebec. However, there are only two official "have" provinces in Canada that are in a position to provide that money, and one of them is the Tory stronghold of Alberta, where they threaten to leave Confederation whenever someone even looks funny at their huge piles of Petro $s. So, the mission is to payoff Quebec while keeping hands off Alberta's pile.

That leaves Ontario.

So if you see this guy hanging around your provincial capital over the next couple of months, he's our Premier and he's looking out for Ontario's interests. Be careful, he's more dangerous than he looks.

2 comments:

Anonymous said...

Ontario and Alberta do not pay for equalization. Like all other federal programs, it is funded by the revenues collected from all Canadians. If the amounts transfered increase, Ontario and Alberta will not be subjected to any special tax or burden. The difference is that the governments of those two provinces do not receive equalization payments. In theory, there is nothing unfair about this; the program is meant to transfer funds collected from all Canadians, including those who reside in "have-not" provinces, to provincial governments that have an inferior fiscal capacity. The dep. of finance site has a brief explanation of equalization and transfer payments here:

http://www.fin.gc.ca/FEDPROV/eqpe.html

http://www.fin.gc.ca/access/fedprove.html

What bugs me, as a citizen of Ontario, is that several provinces receiving equalization payments are cutting their taxes while mine are going up. Nova Scotians are getting a tax cut in this election year. The government of Saskatchewan recently cut corporate income taxes (on a partisan note, I'd love to ask Jack Layton what he thinks of an NDP government cutting corporate income taxes...). In Quebec, the government continues to waste money on senseless duplication and intrusions into federal jurisdiction with Revenue Quebec, their own versions of HRDC and parental leave, and the upcoming opening of new "embassies" in India, China and Europe.

If these provinces can afford to cut their taxes or waste money on useless projects, why do they need more federal cash?

Anonymous said...

Ontario is the biggest sucker ever . . . the province has been screwed over and made to feel like good little Boy Souts.

The problem isn't an imbalance, its the whole ponzi scheme called equalization.