Fiscal Imbalance

[jdobbin]

http://www.cbc.ca/canada/newfoundland-labr...al-impasse.html

The National Post and the Globe and Mail are saying the fiscal imbalance is something the provinces are just making up.

http://www.canada.com/nationalpost/news/ed...39-bba803eb0c1b

Who is going to end up unhappy when Harper makes a decision?

[geoffrey]

Well I can tell you if Harper touches oil and gas revenues, I'm on the separtist bandwagon for sure and I'd love to see us bail right on out of this country.

Nothing short of completely eliminating equilisation will make me happy. This is the policy completely responsible for my provinces inflating labour rates and worker shortage... it pays have-not's to keep people on welfare so they don't have to move out here. It encourages provinces to tank their economy through aggressive anti-business taxes... don't worry, Alberta will pick up the tab.

Our province pays 4x per capita more than anywhere else, and they want to increase that. How is that reasonable or fair. Time to cut the fiscal flow to Ottawa Klein (or replacement of Klein), build those firewalls Harper wanted.

Until we force the other provinces into fiscal and economical prudence, they'll be welfare basket cases forever. There is no motivation in this ultimate welfare system.

[jdobbin]

Well I can tell you if Harper touches oil and gas revenues, I'm on the separtist bandwagon for sure and I'd love to see us bail right on out of this country.

Nothing short of completely eliminating equilisation will make me happy. This is the policy completely responsible for my provinces inflating labour rates and worker shortage... it pays have-not's to keep people on welfare so they don't have to move out here. It encourages provinces to tank their economy through aggressive anti-business taxes... don't worry, Alberta will pick up the tab.

Our province pays 4x per capita more than anywhere else, and they want to increase that. How is that reasonable or fair. Time to cut the fiscal flow to Ottawa Klein (or replacement of Klein), build those firewalls Harper wanted.

Until we force the other provinces into fiscal and economical prudence, they'll be welfare basket cases forever. There is no motivation in this ultimate welfare system.

It seems unlikely that equalization will end with Harper. Every industrialized has an equalization formula except the United States. The United States uses federal transfer programs instead.

[Leafless]

Until we force the other provinces into fiscal and economical prudence, they'll be welfare basket cases forever. There is no motivation in this ultimate welfare system.

I partly agree with what your saying but I wouldn't refer to smaller provinces or provinces producing as much as some of the others "welfare basket cases". In fact the same situation exist if you look at the small town situation right across Canada where as residents stay or remain all their lives in that town in many cases poor or not, the word initiative does not at always apply and is replaced by the word perseverence.

If Alberta wasn't swimming in black gold would you feel the same way about equalization and transfer payments?

I think the feds are to generous and that Canada's smaller economies should deal with that reality themselves but I am not for totally eliminating equalization and transfer payments and support it for basic services.

There are suggestions that Premier Charest is purposely trying to sabotage the talks since he is close on making a side deal with Ottawa on it's own. This is the kind of nonsense that creates problems when the premier of a 'have not province' is pulling strings at a meeting that is supposed to benefit ALL provinces.

http://www.canada.com/edmontonjournal/news...dbd&k=47390

[jdobbin]

I partly agree with what your saying but I wouldn't refer to smaller provinces or provinces producing as much as some of the others "welfare basket cases". In fact the same situation exist if you look at the small town situation right across Canada where as residents stay or remain all their lives in that town in many cases poor or not, the word initiative does not at always apply and is replaced by the word perseverence.

If Alberta wasn't swimming in black gold would you feel the same way about equalization and transfer payments?

I think the feds are to generous and that Canada's smaller economies should deal with that reality themselves but I am not for totally eliminating equalization and transfer payments and support it for basic services.

http://www.canada.com/edmontonjournal/news...dbd&k=47390

Alberta once did receive generous equalization. It may once again receive equalization decades from now once its oil is depleted according to some experts.

This article makes a good point that it is not province's money that they are talking about, it's Ottawa's. Harper will indeed make some Albertans mad but this isn't an NEP program.

[Charles Anthony]

Who is going to end up unhappy when Harper makes a decision?

I do not care who is happy or unhappy. I care about fair policy.

If there is a fiscal imbalance, the only fair solution is to reduce federal taxes. Period. No ifs, ands or buts.

The federal government should not be making cash handouts to the provinces to deal with this "imbalance" if it truly exists. If the provinces should need more money for their operations, the provinces should raise their own provincial taxes (or cut spending) and deal with the political fallout that would result.

Just to be nit-picky on protocol, the CanWest linked article requires a subscription for access.

[jdobbin]

Who is going to end up unhappy when Harper makes a decision?

I do not care who is happy or unhappy. I care about fair policy.

If there is a fiscal imbalance, the only fair solution is to reduce federal taxes. Period. No ifs, ands or buts.

The federal government should not be making cash handouts to the provinces to deal with this "imbalance" if it truly exists. If the provinces should need more money for their operations, the provinces should raise their own provincial taxes (or cut spending) and deal with the political fallout that would result.

Just to be nit-picky on protocol, the CanWest linked article requires a subscription for access.

The National Post, among many papers, have been really tightening up on what is available free in the paper. Some newspapers like the Winnipeg Free Press have no free content at all.

Here is a link that appears to work:

http://www.canada.com/nationalpost/news/st...a9f&k=65931

A lot of people say this fiscal imbalance is something the provinces have made up. Equalization of services is something the federal government *wants* to keep provinces from falling below certain standards when it comes to infrastructure, services and the like. There is *no* industrialized country that doesn't do it in some way.

[Riverwind]

A lot of people say this fiscal imbalance is something the provinces have made up. Equalization of services is something the federal government *wants* to keep provinces from falling below certain standards when it comes to infrastructure, services and the like. There is *no* industrialized country that doesn't do it in some way.

Most countries don't have a province like Quebec spends huge sums of money on programs that no other province has (i.e. $7/day daycare and duplicated tax bureaucracy) and then claims that there is not enough money to pay for essential services like health and education.

The fiscal imbalance is a myth created by Quebec politicians.

[BubberMiley]

Well I can tell you if Harper touches oil and gas revenues, I'm on the separtist bandwagon for sure and I'd love to see us bail right on out of this country.

Your patriotism and loyalty are pretty thin. Are you sure you would be satisfied, and wouldn't then just want to separate Calgary from those socialists in Edmonton?

[jbg]

If Alberta wasn't swimming in black gold would you feel the same way about equalization and transfer payments?

I think the feds are to generous and that Canada's smaller economies should deal with that reality themselves but I am not for totally eliminating equalization and transfer payments and support it for basic services.

A lot of people say this fiscal imbalance is something the provinces have made up. Equalization of services is something the federal government *wants* to keep provinces from falling below certain standards when it comes to infrastructure, services and the like. There is *no* industrialized country that doesn't do it in some way.

Most countries don't have a province like Quebec spends huge sums of money on programs that no other province has (i.e. $7/day daycare and duplicated tax bureaucracy) and then claims that there is not enough money to pay for essential services like health and education.

The fiscal imbalance is a myth created by Quebec politicians.

Alberta, economically, could be a nation. Quebec cannot be one, any more than the so-called "independent" nations such as Pakistan, Congo or Zaire are nations. Quebec and Alberta have opposite difficulties of nationhood, then.

Alberta speaks the same language as its surrounding "provinces" and has a similar culture. Its problem is that it has historically been treated as a colony, to be economically tapped. Quebec on the other hand insists on the trappings of nationhood, and wants others to pay. Much the way a 16 year old wants his own car.

The difference is that 16 year old will eventually become 26 and will be able to afford the next one on his own. Quebec never will have that capacity. Alberta's problem is perhaps soluable within Canada, since Canada will be much the poorer without it. Quebec, on the other hand, will either have to lower its standard of living, or economically liberalize, something that is culturally anathema to Francophone culture.

And I, as an American,don't know whether Quebeckers or other Canadians will make that choice.

[geoffrey]

Well I can tell you if Harper touches oil and gas revenues, I'm on the separtist bandwagon for sure and I'd love to see us bail right on out of this country.

Your patriotism and loyalty are pretty thin. Are you sure you would be satisfied, and wouldn't then just want to separate Calgary from those socialists in Edmonton?

Sure, as long as we get the Rockies, go for it.

Patriotism is a ridiculous irrational complex. It's much better to look out for yourself and your family and what is best rationally for both parties. And when Alberta is constantly bailing out provinces that don't give a fiscal f***, then really I don't see why it's in Albertans best interest to stick around. If I saw improvement from our transfer dollars then ok. But what I see is the gap becoming wider and other provinces becoming more socialist. It's having the opposite effect it was intended to, so lets cancel it now or do what's best for everyone and just stop paying the Federalism bill next month when it comes in the mail.

[jbg]

Patriotism is a ridiculous irrational complex. It's much better to look out for yourself and your family and what is best rationally for both parties.

I'm an American. I feel very differently about patriotism. Our country was stitched together with the blood, sweat and tears of those who fought for independence initially, and then fought for the liberty of all English-speaking people. It is not for Americans to say that our country is articificial. Your reality may be different, so end of rant.

And when Alberta is constantly bailing out provinces that don't give a fiscal f***, then really I don't see why it's in Albertans best interest to stick around. If I saw improvement from our transfer dollars then ok. But what I see is the gap becoming wider and other provinces becoming more socialist. It's having the opposite effect it was intended to, so lets cancel it now or do what's best for everyone and just stop paying the Federalism bill next month when it comes in the mail.

That's a different story. That should be renegotiated.

[geoffrey]

I'm an American. I feel very differently about patriotism. Our country was stitched together with the blood, sweat and tears of those who fought for independence initially, and then fought for the liberty of all English-speaking people. It is not for Americans to say that our country is articificial. Your reality may be different, so end of rant.

Sorry to say, but I find American patriotism just as, if not more, irrational. You had nothing to do with building the nation, yet you feel some responsibility toward it and some right to it. I can't agree. Your American because you were born there not because you built the nation. It's foolish to have pride in something you had no part in creating. Waving a flag or singing an anthem doesn't change reality, ever.

I'm only as loyal to my country as my country is to me. And like a previous poster has mentioned, the ROC views Alberta just simply as a rich colony to pilfer to pay their bills. I haven't seen any loyalty from Canada.

I don't know how long you've been following Canadian politics, but during a long ago campaign in the 1980's, a Liberal Party staffer uttered a phrase to the media that summed up the situation in Canadian politics... "screw the west, we'll take the rest."

Are you in the US now? What do you think Texan's would say if the federal government instituted a policy to take Texan oil revenues and distribute it to another State with more services that can't afford them because they've run their economy into the ground? That's the situation in Canada with Alberta.

And when Alberta is constantly bailing out provinces that don't give a fiscal f***, then really I don't see why it's in Albertans best interest to stick around. If I saw improvement from our transfer dollars then ok. But what I see is the gap becoming wider and other provinces becoming more socialist. It's having the opposite effect it was intended to, so lets cancel it now or do what's best for everyone and just stop paying the Federalism bill next month when it comes in the mail.

That's a different story. That should be renegotiated.

It should be cancelled.

[BubberMiley]

...so lets cancel it now or do what's best for everyone and just stop paying the Federalism bill next month when it comes in the mail.

You can be the one to get the ball rolling and refuse to pay your taxes.

[jdobbin]

Are you in the US now? What do you think Texan's would say if the federal government instituted a policy to take Texan oil revenues and distribute it to another State with more services that can't afford them because they've run their economy into the ground? That's the situation in Canada with Alberta.

Have certain provinces run their economies into the ground or do they just have less revenue?

And the U.S. government does collect more taxes from Texas and re-distribute them elsewhere through transfer payments.

[jbg]

Sorry to say, but I find American patriotism just as, if not more, irrational. You had nothing to do with building the nation, yet you feel some responsibility toward it and some right to it. I can't agree. Your American because you were born there not because you built the nation. It's foolish to have pride in something you had no part in creating. Waving a flag or singing an anthem doesn't change reality, ever.

I'm only as loyal to my country as my country is to me. And like a previous poster has mentioned, the ROC views Alberta just simply as a rich colony to pilfer to pay their bills. I haven't seen any loyalty from Canada.

The United States gave significant aid to the "Dust Bowl" of the 1930's, during the Depression. Now the area is in the midst of an oil boom, and yes, the revenues do help the national defense, and other areas of the country.

A word on my personal loyalty. My ancestors came to this country between the early 1890's and 1900, roughly. Some may have come a few years later. They were Jews. The Russian peasant mobs were breaking into houses, beating and killing us. We were fortunate to have a country to welcome us that didn't care what religion we were, cared only what we could bring to the table.

I am reading, right now, a treatise written by the family of my tennis partner. His ancestors were still in Germany during the 1930's. After Kristallnacht (a terrible German police riot against the Jews) they fled to Australia, and to the US. The people that didn't make it out died.

So yes, I am loyal and indeed patriotic towards the countries that gave my people a chance at survival, and cared what they could do, not who they are.

I don't know how long you've been following Canadian politics, but during a long ago campaign in the 1980's, a Liberal Party staffer uttered a phrase to the media that summed up the situation in Canadian politics... "screw the west, we'll take the rest."

Are you in the US now? What do you think Texan's would say if the federal government instituted a policy to take Texan oil revenues and distribute it to another State with more services that can't afford them because they've run their economy into the ground? That's the situation in Canada with Alberta.

It should be cancelled.

How well would democracy work if any given state/province, city, or county, or part of any of those could leave when the economic trends favored them, and either come back or seek what would now be "international" assistance when things went the other way. What if oil drops back to $9 USD?

[Hicksey]

I understand where Geoffrey is coming from because I often feel the same way when I see more than half of my paycheque going to the government. But I think the realities of a country that is little more than a union of independent regions, demands that such a program exists. I don't know exactly how it should be managed but I do know that Geoffrey makes an excellent point that if all these other provinces want to run all these social programs that aren't offered in other provinces, it should be the responsibility of that province alone to fund them. If they cannot find the extra money in their budgets to support the programs both today and tomorrow, they shouldn't be starting them in the first place.

My main concern when it comes to fiscal imbalance is taxation.

We need a constitutional amendment regarding government spending. It should state that the government cannot raise taxes at any level unless there is a cumulative deficit. This means that if the provinces and municipalities collectively run a deficit and the federal government runs a surplus, that surplus pays the deficit until it is paid or as much of it as the surplus could. Under this no level of government could raise taxes on anything or anyone as long as there is a cumulative surplus. And if there is a cumulative deficit, a tax increase of only the amount of the deficit plus inflation could be allowed to happen. All new social programs would have to be approved by ballot, by Canadians at each federal election.

As much as it seems unfair, I have the same thing to say to you, Geoffrey, as I would to someone from Quebec (or any other of the have-not provinces): You may be an Albertan, but you're a Canadian first. At times the interests of Canada may be at odds with yours. If you're not willing to share some when times are good for you, then don't come asking when things are not. There was a time in the not too distant past that your oilfields weren't paying you as they are now, those times may come again.

That being said, I also believe that the other provinces are taking advantage of yours. Its one thing to ask for help, another entirely to believe they're entitled to the fruits of resources.

[geoffrey]

Are you in the US now? What do you think Texan's would say if the federal government instituted a policy to take Texan oil revenues and distribute it to another State with more services that can't afford them because they've run their economy into the ground? That's the situation in Canada with Alberta.

Have certain provinces run their economies into the ground or do they just have less revenue?

And the U.S. government does collect more taxes from Texas and re-distribute them elsewhere through transfer payments.

Certain provinces most certainly have run their economies into the ground, oil doesn't end at the Alberta border, Saskatchewan has plenty of oil and natural gas. No oil company goes there though because their government puts punitive royalties and corporate taxes on them. Why should my province pay for Saskatchewan's poor policy?

It's no secret that Alberta has always had the tax advantage over the rest of the country. That's why we have an economy. The maritimes are punitive towards business, almost to the point where it seems they'd all rather be unemployed then give a corporate tax cut. Same in Quebec with a government dedicated to screwing corporations through very pro-labour policy.

Why should we pay for this? All these provinces give massive welfare handouts and have elaborate social programs. And it's all their own faults, Canada was blessed in that all provinces have a massive amount of exploitable natural resources. Some provinces refuse their own prosperity, and I shouldn't pay for it.

[jdobbin]

Certain provinces most certainly have run their economies into the ground, oil doesn't end at the Alberta border, Saskatchewan has plenty of oil and natural gas. No oil company goes there though because their government puts punitive royalties and corporate taxes on them. Why should my province pay for Saskatchewan's poor policy?

It's no secret that Alberta has always had the tax advantage over the rest of the country. That's why we have an economy. The maritimes are punitive towards business, almost to the point where it seems they'd all rather be unemployed then give a corporate tax cut. Same in Quebec with a government dedicated to screwing corporations through very pro-labour policy.

Why should we pay for this? All these provinces give massive welfare handouts and have elaborate social programs. And it's all their own faults, Canada was blessed in that all provinces have a massive amount of exploitable natural resources. Some provinces refuse their own prosperity, and I shouldn't pay for it.

Equalization to Saskatchewan is very low. Both B.C. and Saskatchewan will probably be off the equalization payments shortly. Prices for resources in each of those provinces have pushed them back into have status. Newfoundland may be off equalization in a short time as well.

Provinces not so blessed by natural resources will have a harder time getting off equalization.

[geoffrey]

jdobbin... can you tell me which province has no resources? They all have them, they just choose to forbid businesses from being successful. Take Quebec for example, their industry is falling apart because of ridiculous labour policy (they have lots of forestry, water and electricity). The people of Quebec have voted to destroy their economy, I shouldn't have to pay for the ignorance.

[jdobbin]

jdobbin... can you tell me which province has no resources? They all have them, they just choose to forbid businesses from being successful. Take Quebec for example, their industry is falling apart because of ridiculous labour policy (they have lots of forestry, water and electricity). The people of Quebec have voted to destroy their economy, I shouldn't have to pay for the ignorance.

Not all resources are as lucrative as oil. B.C. went into have not status mostly as result of a collapse in forestry and mineral prices.

Alberta spent a good portion of its early years in a "have not" status.

[geoffrey]

jdobbin... can you tell me which province has no resources? They all have them, they just choose to forbid businesses from being successful. Take Quebec for example, their industry is falling apart because of ridiculous labour policy (they have lots of forestry, water and electricity). The people of Quebec have voted to destroy their economy, I shouldn't have to pay for the ignorance.

Not all resources are as lucrative as oil. B.C. went into have not status mostly as result of a collapse in forestry and mineral prices.

Alberta spent a good portion of its early years in a "have not" status.

When Trudeau torched our economy in the 80's (plus world economy, I know I know) we still were a contributor. We're diversified to the point that an oil crash hurts... but we'd still be richer than everyone else.

So it's not oil. It's not natural gas.

It's definitely governance problems, and anti-business agendas/electorates. Something we in Alberta (or Ontario) should not be liable for.

[Michael Hardner]

It's imagine to see what Mr. Harper has in the bag for this issue. All the solutions that I can conjure up are zero-sum: one province gains, another loses. If he thinks that he's got enough credibility with westerners to buy votes in Quebec, he's probably wrong.

[Jerry J. Fortin]

Mr. Harper has successfully gathered up all the Premiers and got them to publicly announce that they cannot get their collective crap together. He acquired lots of information about each provincial stance freely. He now has all the political tools to exercise his constitutional perogative and arbitrarily impose a federal solution to the problem. That is his right because we are talking about a federal program. Oh it may be a provincial problem but he holds the keys to a political solution.

I give Harper two bonus points for political manipulation, those fools were rightly played by Harper. I also now have all the confirmation I ever needed to prove that he is intent upon formatting a means to maximize the political power available to him within his minority government capacity. He has just shown Canadians that the provinces are not capable of playing at the federal level of politics in this nation. He comes out looking smarter than they do in this exercise.

The issue of fiscal imbalance is a little football that can be tossed around without hurting the political fortunes of parties at the federal level. Putting the provinces at odds with the feds is a new one, usually this sort of thing is initiated at the other side of the equations by the provinces. Harper is a force to be reconned with.

[Michael Hardner]

Your post sidesteps the point I made. How exactly can he keep Quebec and Alberta happy ?

Do you think he's planning to ditch the program, and push power (including taxation power) to the provinces ?