Equalization

[Jerry J. Fortin]

1. You sound as if you actually were there during the depression... Most people of Alberta have since immigrated there and have nothing to do with the depression. It was no personal hardship for you.

Well lets think about that for a second. Okay lets see, my grandmother died of scarlet fever, along with three of eight other children in the dirty thirties. They may have been saved with modern healthcare, such was not available at the time. I still consider this a personal loss, you are free to view it as you will. My family came here from Quebec in 1903, where they buried my first Canadian forefather in 1732. Been in country for a while.

2-3. By diversify interests, you mean oil and more oil right? Acting like your province is well off because of personal effort is like me walking into my backyard, finding a hidden gold mine, becoming a millionaire and claiming that I build my life off of blood, sweat and tears. Oil allows Alberta to live in the illusion that far right wing policies are better, because they are pumping money out of the ground. 100 years down the road, Alberta will have peaked and fallen. Oil economy has a limited time span.

Actually we are developing secondary industry based on available resources. Those resources do include oil, but are not limited to merely oil. Our agricultural industry has evolved, and expanded. Our forestry industry is adapting to more value added products. Alberta is very much more than simply oil. Since we have had confederation for a little more than 100 years now, things are pretty much set in place in political terms. You can look at it from the perspective that either left or right winged partisan efforts will yield an x or y result, but in truth politics kills more jobs than it creates, unless you want everyone working for the government in some bureaucratic gulag. I will take my place among other Alberta citizens and suggest that I will take my chances with what we already have and plan on building from that point forward. Unlike other places I guess our citizens prefer to do as much as we can for ourselves.

4. You mean that you are converting it to the advantage of the foreign entities (American and Other)... at the cost of creating a toxic ecosystem.

Dude, give your head a shake! Think about what you are saying. The BAD oil sands are just below the surface in Fort Mac. You think that maybe all that oil stuff just laying there under the surface us really environmentally positive. Maybe, just maybe that bad oil sand stuff has been polluting the area for a little while now, like maybe a few million years. It could be said that through the process of removing the oil from the sand we are actually cleaning up mother natures mess. How have those heavy water spills from your nuclear efforts in your corner of the woods, played out.

5. Alberta isn't the economic engine. It's a double edged sword. Developing tar sands at the expense of everything else. Our dollar goes up, killing Ontario's ability to compete as a manufacturing base. And in some sick and twisted way, westerners seem to want that to happen.

So according to you, Alberta oil has killed Ontario's ability to compete as a manufacturing base. Apparently because of this, again according to you, westerners are "in some sick and twisted way" responsible. I don't think so buddy, I just don't think that is even remotely close to reality. Interesting argument you are pushing here. While I said that the feds did this or the feds did that, no mention did I make about other provinces. Nice to see how an easterner views us out here in the polluted cultural wilderness. I don't plan to move eastward, but I do invite those who want to work to move westward. You see it seems like we are more inclusive to the rest of the nation than they are to us. Go figure, we are the bad guys out here in the west.

Edited February 13, 2012 by Jerry J. Fortin

[Vineon]

A new study out says the nations wealth-sharing scheme violates the constitution with the equalization formulas which short changes some provinces. In the 1990's-early 2000's, ie. Ontario needed 4.56 Bil MORE for services and Quebec needed 6.39Bil. less to provide the same level of services. One thing that shouldn't have to happen is to having one province going after the other province, so Ottawa needs to make these equalization more equal and balance by need? Thoughts? http://www.thestar.com/news/article/1126602--canada-s-wealth-sharing-plan-is-unconstitutional-study-says?bn=1

The study is based on a wrong premise. Equalization amounts aren't calculated based on the amount of services offered but based on the ability to tax for services. Québec is free to pay itself additional services with it's own provincial taxes, which it does and which explains why it has more services and still gets this much in equalization payments.

Should Québec suddenly decide to cut in half or double spendings in their social programs, it wouldn't technically affect the amount it receives from equalization.

I don't know the statistics exactly but the last time I checked, the German bailout of Greece is much smaller than the ongoing equalization transfers between Alberta and the Maritimes/Quebec.

I dont know. I sort of dislike calling something a transfer that I don't feel is one. Equalization 'payment' is right. The 'transfer' in all 'transfer payments' is one from Ottawa to the provinces. Should people insist on calling equalization a transfer, that would be fine, but they should thus stop insinuating the 15 bils number still holds true and start substracting what the 'have-not' provinces contribute for.

If we call it a 'transfer', Alberta's contribution to the entire equalization pot would be no more than about 1.9 billion for the last year. That would be about what it pays in taxes spent by Ottawa for equalization while receiving no equalization payment in return. Unless I'm wrong, that's quite a long shot from the hundreds of billions going directly from Germany to Greece even when looked into per capita.

Edited February 15, 2012 by Vineon

[August1991]

Alberta's wealth comes from resources.

Ontario's wealth comes from people.

Good point. People can move. Resources can't.

I dont know. I sort of dislike calling something a transfer that I don't feel is one. Equalization 'payment' is right. The 'transfer' in all 'transfer payments' is one from Ottawa to the provinces. Should people insist on calling equalization a transfer, that would be fine, but they should thus stop insinuating the 15 bils number still holds true and start substracting what the 'have-not' provinces contribute for.

If we call it a 'transfer', Alberta's contribution to the entire equalization pot would be no more than about 1.9 billion for the last year. That would be about what it pays in taxes spent by Ottawa for equalization while receiving no equalization payment in return. Unless I'm wrong, that's quite a long shot from the hundreds of billions going directly from Germany to Greece even when looked into per capita.

The better argument is that, by an accident of history, resource revenues belong to provincial governments - not the federal government.

Equalization is an attempt to correct this obvious flaw in Canada's constitution.

[August1991]

Alberta's wealth comes from resources.

Ontario's wealth comes from people.

Good point. People can move. Resources can't. Edited February 18, 2012 by August1991

[August1991]

The study is based on a wrong premise. Equalization amounts aren't calculated based on the amount of services offered but based on the ability to tax for services. Québec is free to pay itself additional services with it's own provincial taxes, which it does and which explains why it has more services and still gets this much in equalization payments.

Should Québec suddenly decide to cut in half or double spendings in their social programs, it wouldn't technically affect the amount it receives from equalization.

OK. But what if the cost of government services (office rents etc) are lower in one province? Equalization ignores this difference.

IOW, equalization considers the ability to tax but ignores the cost of government services. In theory, equalization is supposed to make the individual decision to move within Canada "tax-free". Well, what about "service-free" too?

There are pundits/economists in Quebec now claiming that 99% of Quebecers live better than 99% of Americans, and that Quebec has a more advanced economy than Ontario. How to justify such arguments? One way is that the cost of living is lower in Quebec.

----

However one justifies equalization, or third-world aid, I simply think that the transfers should go directly to people: money in their hands. That's what the old federal Liberal "Baby Bonus" did.

If I had the power to decide Canada's CIDA budget, I would fire all the "development bureaucrats" and send the divided money, a stipend every month, to every women in Africa with a cellphone bank account.

Does this create a dependency? Well, does the use of a cellphone or the ability to read create a dependency? In the civilized world, on a regular basis, we too are all dependent inheritors of the past - Galileo, Leibnitz, Newton, Voltaire. We modern people receive a "stipend" every month because of the discovery of, for example, calculus.

Dependency? OCD seems to be a genetic feature of humans - not any particular generation.

Edited February 18, 2012 by August1991

[Newfoundlander]

Equalization needs major reforms. If the federal government is going to provide equalization to provinces they should have some say in how it's spent.

[Smallc]

Equalization needs major reforms. If the federal government is going to provide equalization to provinces they should have some say in how it's spent.

That would probably be unconstitutional. Provinces already have strings attached with other transfers.

[Newfoundlander]

That would probably be unconstitutional. Provinces already have strings attached with other transfers.

Well then we should get rid of it.

[Smallc]

Well then we should get rid of it.

Why? The idea of equalization is a good one. It gives all provinces at least a minimum fiscal capacity. Have provinces still have more fiscal capacity than have not provinces. This is, after all, massive economic disparity within this one country (PEI with a per capita GDP of about 30K, and Alberta with one of about 80K). Why should one province be deprived because another won the geographic draw, as it were.

I don't see a reason for strings, either, because each province is going to have its own necessary priorities to fund.

Edited February 19, 2012 by Smallc

[cybercoma]

That would probably be unconstitutional. Provinces already have strings attached with other transfers.

It's not unconstitutional. The provinces agree to the "strings" in exchange for healthcare funding. Otherwise, the provinces can turn down the health transfer and the strings. Explain to voters, however, that you turned down billions in healthcare funding from the fed because you don't want to meet the federal "standard" of care.

[Smallc]

It's not unconstitutional. The provinces agree to the "strings" in exchange for healthcare funding.

I'm talking specifically of equalization, which is part of the Constitution Act, 1982.

[Newfoundlander]

Why? The idea of equalization is a good one. It gives all provinces at least a minimum fiscal capacity. Have provinces still have more fiscal capacity than have not provinces. This is, after all, massive economic disparity within this one country (PEI with a per capita GDP of about 30K, and Alberta with one of about 80K). Why should one province be deprived because another won the geographic draw, as it were.

I don't see a reason for strings, either, because each province is going to have its own necessary priorities to fund.

Well we have a province like Quebec recieving billions in equalization payments and offering $8 a day health care while adding to their debt.

[Smallc]

Well we have a province like Quebec recieving billions in equalization payments and offering $8 a day health care while adding to their debt.

Child care, and Quebec was running surpluses until the recession, just like the rest of Canada. Oh, and if Quebec can have $7 a day child care, so can any other province if they choose to make that a priority.

[Newfoundlander]

Child care, and Quebec was running surpluses until the recession, just like the rest of Canada. Oh, and if Quebec can have $7 a day child care, so can any other province if they choose to make that a priority.

Some province's try and live within their means. Quebec ran surpluses because they were getting equalization payments.

[Smallc]

Some province's try and live within their means. Quebec ran surpluses because they were getting equalization payments.

That's nonsensical. They were going to get it anyway, so why would they not use it?

[Newfoundlander]

That's nonsensical. They were going to get it anyway, so why would they not use it?

They're getting more because they're overspending.

Did you look at the report that says they're getting to much?

Edited February 19, 2012 by Newfoundlander

[Smallc]

They're getting more because they're overspending.

no they aren't. How much you spend has nothing to do with how much you get.

[punked]

Because it has to with per capita GDP numbers if they are spending more then they would be having a higher per capita GDP so they would be getting less. Come on Newfoundlander you can follow these numbers.

[Newfoundlander]

no they aren't. How much you spend has nothing to do with how much you get.

Ok

So what exactly is the sense of having this program if have not province's are providing better services then have not provinces? If Quebec can afford $7 daycare why do they need equalization?

Edited February 19, 2012 by Newfoundlander

[Smallc]

So what exactly is the sense of having this program if have not province's are providing better services then have not provinces? If Quebec can afford $7 daycare why do they need equalization?

Because they couldn't afford it without? Seriously, by having that program, it means they sacrificed something else. They can do that. It's just as constructional as equalization,

[Vineon]

Is nobody even going to mention that Québec has higher provincial taxes?

[Newfoundlander]

Because they couldn't afford it without? Seriously, by having that program, it means they sacrificed something else. They can do that. It's just as constructional as equalization,

Their sacraficies have been policies that would allow for economic growth, like lower taxation level and less debt.

[Smallc]

Their sacraficies have been policies that would allow for economic growth, like lower taxation level and less debt.

Lower taxes generally come after you can afford them. They couldnt afford it even if they spent less money. Alberta, after all, has the second largest per capita government in the country, after your own province.

[Newfoundlander]

Lower taxes generally come after you can afford them. They couldnt afford it even if they spent less money. Alberta, after all, has the second largest per capita government in the country, after your own province.

So Quebec can afford $7 daycare but wouldn't be able to afford lowering their taxes or their debt?

Do you have stats that show Alberta has the second largest per capita government?

Edited February 19, 2012 by Newfoundlander

[Smallc]

So Quebec can afford $7 daycare but wouldn't be able to afford lowering their taxes or their debt?

Sure they would. Of course, they would disagree with you that early education doesn't promote growth. If quebec was sitting in Alberta's shoes, they'd be just as wealthy. Quebec itself, in world context, is also extremely wealthy, so they're obviously doing something right. They simply aren't sitting on the resource wealth of some provinces.

The stats were in a G&M article that I cant find, since I don't remember the title.

Edited February 19, 2012 by Smallc