Should we rework the equalization payments for the provinces?

[punked]

did you ever think the equalization scheme is unfair to the ROC?

CANADIANS VOTED ON IT BUDDY!!! In fact you know who the only province who you agree with on Constitution is? Quebec? So I guess if you don't like the Constitution and what is in it you better move to Quebec because your government voted FOR IT!

[Bonam]

And you continue to not understand that there's nothing Quebec could possibly do to get less money without some miraculous way of growing their per capita GDP, which sits at around half that of Alberta.

You mean something crazy like allowing the exploitation of the plentiful resources that are found in Quebec, like Alberta and other provinces do? Like reducing their provincial tax burden to create a more business friendly climate in line with other provinces? Like streamlining their red tape and making it no more onerous than in other provinces? Like getting rid of their special provincial systems for things where all other provinces participate in nation-wide systems, to save administrative costs and reduce complexity? Like getting rid of punitive regulations against businesses whose primary language is English and thus allowing more businesses from across the country and North America to set up shop in Quebec and contribute to economic growth?

Nah, that'd be crazy. Let's hope for "miracles" instead.

[punked]

You mean something crazy like allowing the exploitation of the plentiful resources that are found in Quebec, like Alberta and other provinces do? Like reducing their provincial tax burden to create a more business friendly climate in line with other provinces? Like streamlining their red tape and making it no more onerous than in other provinces? Like getting rid of their special provincial systems for things where all other provinces participate in nation-wide systems, to save administrative costs and reduce complexity? Like getting rid of punitive regulations against businesses whose primary language is English and thus allowing more businesses from across the country and North America to set up shop in Quebec and contribute to economic growth?

Nah, that'd be crazy. Let's hope for "miracles" instead.

They can make the laws in their province because I sure don't want them making the laws in mine. You want to change Quebec you better move there.

[Bonam]

They can make the laws in their province because I sure don't want them making the laws in mine. You want to change Quebec you better move there.

There has to be a limit though. Let's say a province was really stupid, raised taxes on businesses to 95%, all companies left the province, and its GDP went way down. And the province was perfectly happy never to change its policies and subsist purely off of equalization payments. Is that something the rest of Canada should just accept? At a certain point, economically self-destructive policies in a province that cause it to become an ever bigger burden to the rest of the country should not simply be enabled by giving them ever more equalization payments.

[punked]

There has to be a limit though. Let's say a province was really stupid, raised taxes on businesses to 95%, all companies left the province, and its GDP went way down. And the province was perfectly happy never to change its policies and subsist purely off of equalization payments. Is that something the rest of Canada should just accept? At a certain point, economically self-destructive policies in a province that cause it to become an ever bigger burden to the rest of the country should not simply be enabled by giving them ever more equalization payments.

If it got to that point you could get the 50+7 formula through. That however ISN'T close to what is happening. Let Quebec make the laws for Quebec. It is that simple. If you think differently then you better not vote Conservatives they think Quebec is a nation on itself if I recall.

[WIP]

Oh sure, now that Ontario has gone from having to support the nation through its manufacturing base, to becoming a have-not province itself (thanks in some part to other provinces using 'oil' to inflate the value of the Canadian Dollar), now all of a sudden, it's time to end the Equalization Program!

[Smallc]

You mean something crazy like allowing the exploitation of the plentiful resources that are found in Quebec, like Alberta and other provinces do?

They are being exploited, but they don't bring in the same kind of money.

[westguy]

Even if Alberta did vote for it, that doesn't mean Quebec should be a chronic user instead of developing their own economy

[Smallc]

They have their own developed economy. It simply can't match the average caused by the resource boom in the west.

[geoffrey]

Oh sure, now that Ontario has gone from having to support the nation through its manufacturing base, to becoming a have-not province itself (thanks in some part to other provinces using 'oil' to inflate the value of the Canadian Dollar), now all of a sudden, it's time to end the Equalization Program!

High dollar hurts Alberta companies exporting oil as much as it hurts Ontario. In fact, it can make energy relatively cheaper for Ontario and Eastern companies that import oil from the Middle East. Ontario needs to stop blaming others and start looking at their recent track record of public policy.

[punked]

Even if Alberta did vote for it, that doesn't mean Quebec should be a chronic user instead of developing their own economy

Maybe if that is what Albert wanted they should have asked for it. No one held a gun to the people if Alberta head.

[jbg]

I don't believe its fair that Quebec consistently complains how badly it is treated by the other provinces yet it get the best deal in the country. Equalization payments were meant as a means of giving have not provinces the ability to meet their basic necessities rather then subsidize their social programs to such a level that the rest of the country can only dream of.a

You left out Quebec's biggest drain on the country; it's insistence on using a moribund language that isn't even spoken in France. France makes far more use of English than Quebec does Canadian, a language somewhat similar to English. Quebec's crazy language policies chase away businesses and affluent residents, further deepening their "have not" status.

[Accountability Now]

Oh sure, now that Ontario has gone from having to support the nation through its manufacturing base, to becoming a have-not province itself (thanks in some part to other provinces using 'oil' to inflate the value of the Canadian Dollar), now all of a sudden, it's time to end the Equalization Program!

WIP...have you ever left Ontario? Do you realize there is a global economy dicating things here which doesn't really care whether Alberta or Ontario profit? More importantly, have you heard of a group called OPEC who tend to control oil prices. As much as anyone would like to believe that Alberta could control the dollar....it just can't. There are other provinces who have oil and choose not to develop it just yet. Take Saskatchewan for instance. They have similar amounts if not more oil than Alberta but their socialist goverments have not wanted to go in that direction. Newfoundland is a great example of a have not province that has turned things around for themselves.

The other reality here is that everything happens in waves. Alberta will go through tough times when oil tanks and Ontario will rebound and be a have province soon enough. That is the sole reason for equalizaiton.

[WIP]

WIP...have you ever left Ontario? Do you realize there is a global economy dicating things here which doesn't really care whether Alberta or Ontario profit?

And, that's why I say to hell with their dictating the terms! Before the first globalization agreements and the increased power of GATT and WTO, each nation was free to set their own tariff, import and foreign ownership laws....yes, we used to have that in Canada! Hard to believe now, but a long, long time ago, U.S. and other multinational corporations couldn't just waltz in and buy up things like Potash or the steel mills here in Ontario. We listened to the bleating all through the 70's that tariffs and foreign ownership restrictions were causing high unemployment (which was bullshit) and that removing tariffs and laws against foreign ownership and outsourcing would free our economy and the people to work more productively and more profitably. How's that been working so far?

More importantly, have you heard of a group called OPEC who tend to control oil prices.

OPEC only sets the price of oil for its members....which means in real terms it is Saudi Arabia and friends. OPEC is not able to set the prices anymore....which you should have been grateful for, because the Saudis worked to keep the prices stabilized for many years. The recent spikes in oil demand that weren't matched by Saudi increase in supply has been taken to mean that the Saudis are already over the curve of pumping out the giant G'war Oil Field, and didn't increase supply because they couldn't, and none of the other friends in the region could increase their supplies enough to prevent runs on oil in the futures markets.....and that's why the world ended up in a recession five years ago that it will not be able to grow it's way out of. But, with a decline in conventional oil, has that inspired the industry and governments and business in need of oil to go easy on petroleum? Not that I can see in most places in the world! The oil industry has gone hogwild into tar sands, shales, deep sea and Arctic drilling, with no thought for what comes next. And that's the insanity of modern day capitalism....which just flies by the seat of its pants, extracting as much profit as possible along the way.

As much as anyone would like to believe that Alberta could control the dollar....it just can't. There are other provinces who have oil and choose not to develop it just yet. Take Saskatchewan for instance. They have similar amounts if not more oil than Alberta but their socialist goverments have not wanted to go in that direction.

Sounds like Saskatchewan has more sense than other provinces! What sense does it make to use up non-renewable resources in a matter of years or even decades...leaving nothing for future generations who might have other, less intensive resource requirements?

Newfoundland is a great example of a have not province that has turned things around for themselves.

And, what's galling, is that so many Newfies are bitching now about paying into the pot that they were collecting from ever since they joined Confederation in 1949. The oil will run out, and I wonder if Newfoundland is doing much of anything with this bounty to establish a long term post-oil economy!

The other reality here is that everything happens in waves. Alberta will go through tough times when oil tanks and Ontario will rebound and be a have province soon enough.

It doesn't have to go in waves! The boom and bust cycles are a primary feature of capitalism, and the main reason for reforms that started in the early 20th century to smooth out the cycles and even things out a little. And, of course today we have had about 30 years of a deliberate, organized strategy by banks and business to roll back all of the taxes and regulations that limited obscene profits for a few at the top, and demand that governments at all levels, all around the world, hollow out their social support programs that were instituted to minimize the harms of capitalism. Right now in the U.S., they are about to do the unthinkable....and it's not just Republicans doing it...it is a coordinated, bipartisan action to start defunding their Social Security and Medicare systems.

That is the sole reason for equalizaiton.

Well, I would say the actual reasons go beyond the business cycle to include regional disparities like some provinces just having much more limited resources than others. The equalization payments should at least provide a minimum of support to have not provinces so we don't end up with gross inequities like in the U.S. -- where there is great wealth in some places, and third world poverty in others, like Louisiana, many de-industrialized cities, and some native reserve communities.

[bush_cheney2004]

.... Right now in the U.S., they are about to do the unthinkable....and it's not just Republicans doing it...it is a coordinated, bipartisan action to start defunding their Social Security and Medicare systems.

Why is it "unthinkable"? They also created Social Security and Medicare out of thin air. It's not like they have always existed.

--where there is great wealth in some places, and third world poverty in others, like Louisiana, many de-industrialized cities, and some native reserve communities.

Sure...."native reserve communities" in Canada are veritable paradises in comparison...LOL!

[Accountability Now]

WIP...you must be a politician. You answered 10 questions that no one asked but didn't even come close to the one brought up. I questioned your comment on "other provinces inflating the price of the dollar" and how absurd that is. That was the only part of your previous arguement that I disagreed with. The bottom line is that if the brain trust in Alberta could be so cunning to manipulate the dollar then why are they forecasting a deficit this year?

You did raise a number of good points which I agree with but please continue to argue that way. I hate seeing people argue on rhetoric.

[WIP]

WIP...you must be a politician. You answered 10 questions that no one asked but didn't even come close to the one brought up.

Which one of the questions you asked, was the one you wanted me to answer, then?

[Accountability Now]

Which one of the questions you asked, was the one you wanted me to answer, then?

As per my previous thread, I questioned your comment on "other provinces inflating the price of the dollar" and how absurd that is.

Do you honestly think the brain trust in Alberta or any other province can manipulate the national currency considering all the other global factors out there?

[WIP]

As per my previous thread, I questioned your comment on "other provinces inflating the price of the dollar" and how absurd that is.

Do you honestly think the brain trust in Alberta or any other province can manipulate the national currency considering all the other global factors out there?

Well, the Alberta brain trust is in Ottawa now, running the country! And as everyone is well aware, they are hell-bent on expanding tar sands development to the max come hell or high water. And oil, like every other commodity that is exported, will raise the value of our dollar in comparison to the U.S. dollar, or other currencies.

From my understanding, Canadian oil sold to the U.S. is priced in U.S. dollars. And the world price for oil determines whether Canadian oil prices rise or fall. When oil goes up in price, the oil companies receive more U.S. dollars. Oil companies operating in Canada, pay their employees in Canadian dollars, they need to exchange U.S. dollars for Canadian dollars. So when they have more U.S. dollars, they supply more U.S. dollars and demand more Canadian dollars. A greater supply of U.S. dollars lowers the value of the U.S. dollar. And, the Canadian dollar goes up in value because of the increase in demand for Canadian dollars.

A rising currency value is going to have mostly negative impacts on manufacturing exports. The upside is that it lowers the costs of imported machinery needed for upgrades. But, since employees are payed in Canadian dollars, a higher dollar means higher export costs and a downward trend in manufacturing exports. Canada benefited from this situation in automotive manufacturing when our dollar was worth 60 to 70c U.S.. U.S. production in Michigan, Ohio and Indiana declined in favour of lower labour costs in Ontario and Quebec. Now....especially with what has been essentially a complete collapse of the UAW as a bargaining agent, $14.00 hr. U.S. wages, makes the U.S. the go to destination for building cars at cheaper prices.

Worth noting that globalization (just wait till we get stuck with this secret transPacific Partnership deal) that allows money to flow freely across international borders, has the overall tendency to drive wages to bargain basement prices. And automotive manufacturing hasn't been much more immune to this trend than textiles. The only reason why outsourcing of automotive has been slower to act, boils down to the fact that cars and most of the components they are made of are bigger and heavier than clothing and electronics etc.. So, shipping cars from China has higher per unit transportation costs than shipping Iphones and cheap shirts. Worth noting that China's new state-of-the-art steel mills that were built mostly with foreign investment, with the intentions of flooding the market with cheap steel, have turned out to be the first casualty of the new age of high oil prices that started taking hold five or six years ago! This is part of the reason why the talk in China started shifting to creating their own consumer economy. Higher transportation costs will take down one globalization scheme after another, as we discover that these so called brains who are the captains of industry, are really stupid, shortsighted egotists, who can't see further than the next quarterly report!

And the silver lining for the rest of us, is that high oil prices will do what our politicians have had neither the courage nor the integrity to do -- stand up and refuse the parade of globalization free trade agreements that have been forced on the nations of the world by bankers and businessmen working mostly behind the scenes. Eventually, transportation costs get too high to ship products half way around the world from central locations set up on the basis of cheap labour.

The problem for us in wide scale development of unconventional oil - like tar sands, is the environmental costs. Harper, and all those who are looking at the dollar signs to be made selling crud across the border or to China, aren't factoring in the billions of dollars in environmental damage that will be done if they get everything on their wish list - like the two pipelines needed to ship it out to foreign markets. Whatever money can be made from these operations won't be worth the incalculable costs of trying to survive in an increasingly hotter, more volatile climate.

[Accountability Now]

Well, the Alberta brain trust is in Ottawa now, running the country! And as everyone is well aware, they are hell-bent on expanding tar sands development to the max come hell or high water. And oil, like every other commodity that is exported, will raise the value of our dollar in comparison to the U.S. dollar, or other currencies.

From my understanding, Canadian oil sold to the U.S. is priced in U.S. dollars. And the world price for oil determines whether Canadian oil prices rise or fall. When oil goes up in price, the oil companies receive more U.S. dollars. Oil companies operating in Canada, pay their employees in Canadian dollars, they need to exchange U.S. dollars for Canadian dollars. So when they have more U.S. dollars, they supply more U.S. dollars and demand more Canadian dollars. A greater supply of U.S. dollars lowers the value of the U.S. dollar. And, the Canadian dollar goes up in value because of the increase in demand for Canadian dollars.

So.....you're saying that because Harper has his seat in Calgary that he's Alberta? He was born and raised in Toronto....or did you not know that? And he's only one guy. Currently there are 165 Conservatives in power. Of which 73 are from Ontario!!!!!! If you take the Conservatives from Alberta (26), BC (21), Saskatchewan(13) and Manitoba (11)....you still only have 71. Ontario can vote any way it wants and the Entire West can't do anything about it!!

Furthermore, the Oil companies do sell the oil in USD and their costs are in CDN dollars. As such when the dollar is low that means it gets converted to less CDN which means less profit! When the USD is high then they get more CDN dollars for their USD which means more profit. Which one do you think the oil companies want??????

Seriously....your argument is horrible. I can agree that a high CDN dollar is not good for manufacturing just like its not good for oil but I will never agree that "certain provinces" are inflating the price of the dollar to their benefit.

[westguy]

Yes we should re-work the equalization payments in Canada. it is unfair to some provinces and benefits some who are chronically dependent on them

[Smallc]

Yes, those with less should just die, because you don't understand the program.

[Accountability Now]

Yes, those with less should just die, because you don't understand the program.

LOL!

[westguy]

I understand that Quebec sucks $8B/yr out of the ROC every year and has received $257B since it started 50 yrs ago. Just becuz it was accepted 50yrs ago dioes not make it equitable.

[westguy]

as caustic as ever becuz we disagree Smallc