Fiscal Imbalance

[Jerry J. Fortin]

It is not possible to make an arrangement that will make both Alberta and Quebec happy because they are at opposite sides of the equation. One is receiving equalization and the other is paying equalization. There is no middle ground or common cause to work with.

Harper is on record for changing the political power structure and devolving the federal perogatives by transfers of political power to the provinces. Taxation is already available to the provinces and equalization is a form of taxation. My money will be on the feds suggesting that the provinces retain a higher portion of the take from federal taxation by means of a per capita formula. This fits with the Ontario concerns and address the Quebec issues. It would soften the blow to Alberta as well. But there will be a price associated with this kind of action. The provinces will have to gain access and control to numerous federal programs in their own jurisdiction because the funding for those programs will be slashed to accomodate the reduced tax grab from the feds.

In short the only viable method of increasing provincial cuts from the federal taxation pie is to hand over specific programs and the per capita funding of those programs to the provinces. It is a revenue neutral move in theory but in pratice it will cost the provinces dearly. It will give them what they want but complicate their lifes greatly. The provinces will have to eat a bunch of bureaucracy to do it. The feds will save twice from the effort but the bottom line is that the provinces will actually lose in the process.

[jdobbin]

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.

The original intent of transfer payments was to make sure that certain provinces didn't fall below standards nation-wide because their provinces were too big, had too small a population, had fewer natural resources or just had businesses that were highly cyclical like agriculture.

I don't think you can assume that provinces that have received equalization are just badly governed provinces.

The federal government has always had an interest in ensuring services in the provinces and territories set a certain standard.

[Jerry J. Fortin]

Why is it not possible to say that a province that receives equalization is not governed badly? Are you suggesting that the federal standards create the need for equalization?

[jdobbin]

Why is it not possible to say that a province that receives equalization is not governed badly? Are you suggesting that the federal standards create the need for equalization?

Exactly.

It is a federal program. If it didn't exist, Manitoba could get rid of its Medicare system, completely turn it over to private insurance and have taxes lower than Alberta. That's not possible in Canada because of national standards.

[Jerry J. Fortin]

Fed standards are just one of the little bonuses of confederation. I am decidedly not a federalist for just that reason.

[jdobbin]

Fed standards are just one of the little bonuses of confederation. I am decidedly not a federalist for just that reason.

It's in the constitution now so the only way to eliminate it is to amend the Charter.

And the only way to leave the country non-violently is to also amend the constitution.

[Leafless]

That's not possible in Canada because of national standards.

National standards?? What national standards??

You must mean Canada's socialistic form of goverence.

Currently we are a nation of socialist.

[jdobbin]

National standards?? What national standards??

You must mean Canada's socialistic form of goverence.

Currently we are a nation of socialist.

You'll have to name a country that doesn't have some form of transfer payments. I can't think of one including the United States. We are all nations of socialists.

[Leafless]

National standards?? What national standards??

You must mean Canada's socialistic form of goverence.

Currently we are a nation of socialist.

You'll have to name a country that doesn't have some form of transfer payments. I can't think of one including the United States. We are all nations of socialists.

I am talking equalization payments.

Perhaps you can name me one other country where as 31% of federal spending is on transfer payments of which 46% is equalization payments to spend in whatever area they wish restricted to no specific area, which is plain dumb.

The logic behind equalization payments is subzidizing in our case a province who in effect cannot raise it's revenues to an established standard in comparison to more successful provinces receives equalization payments to be equal to that standard.

I fully beleive this is total nonsense and a huge strain on federal resources and amounts to nothing more than national welfare on a perpetual basis and only strains other areas in need of federal aid.

http://www.pco-bcp.gc.ca/aia/default.asp?L...=19970226_e.htm

http://www.oag-bvg.gc.ca/domino/reports.ns...FNW9F.CNDJQE.M9

[jdobbin]

I am talking equalization payments.

Perhaps you can name me one other country where as 31% of federal spending is on transfer payments of which 46% is equalization payments to spend in whatever area they wish restricted to no specific area, which is plain dumb.

The logic behind equalization payments is subzidizing in our case a province who in effect cannot raise it's revenues to an established standard in comparison to more successful provinces receives equalization payments to be equal to that standard.

I fully beleive this is total nonsense and a huge strain on federal resources and amounts to nothing more than national welfare on a perpetual basis and only strains other areas in need of federal aid.

http://www.pco-bcp.gc.ca/aia/default.asp?L...=19970226_e.htm

http://www.oag-bvg.gc.ca/domino/reports.ns...FNW9F.CNDJQE.M9

Every country is different with how it transfers money. I have no idea what the percentages are in other nations when it comes to transfer payments. Some people in the U.S. say that defence spending in the U.S. is a form of regional transfer payment because Congress ensures spending goes to all 50 states. If that is the case, then 49% of U.S. transfers go out regionally.

http://www.warresisters.org/piechart.htm

[Leafless]

Every country is different with how it transfers money. I have no idea what the percentages are in other nations when it comes to transfer payments. Some people in the U.S. say that defence spending in the U.S. is a form of regional transfer payment because Congress ensures spending goes to all 50 states. If that is the case, then 49% of U.S. transfers go out regionally.

http://www.warresisters.org/piechart.htm

Again you are including only transfer payments in general.

The U.S. it seems has nothing that even closely resembles 'equalization payments' which is as you know is a separate item from transfer payments.

Equalization payments puts Canada in a 'social class' by itself unless you can provide proof some other country is doing likewise.

In other words that $10-billion dollars plus (equalization) would really give our military the boost it deserves.

[jdobbin]

Again you are including only transfer payments in general.

The U.S. it seems has nothing that even closely resembles 'equalization payments' which is as you know is a separate item from transfer payments.

Equalization payments puts Canada in a 'social class' by itself unless you can provide proof some other country is doing likewise.

In other words that $10-billion dollars plus (equalization) would really give our military the boost it deserves.

Australia, a country similar to ours has equalization.

http://www.parl.gc.ca/information/library/...s/prb0460-e.htm

[Technocrat]

Australia too huh... hey they have a pretty high standard of living as well... hmmmm.... maybe these 'socialist' policies are actually working. My my my...

In other words that $10-billion dollars plus (equalization) would really give our military the boost it deserves.

Great lets spend 10 billion on tanks and bombs... ohhh joy. Of course we could spend it to put a roof over peoples heads, feed the hungry, educate our children... shit we could even update, upgrade and restructure the countries health care system.

[jbg]

The U.S. it seems has nothing that even closely resembles 'equalization payments' which is as you know is a separate item from transfer payments.

Equalization payments puts Canada in a 'social class' by itself unless you can provide proof some other country is doing likewise.

In other words that $10-billion dollars plus (equalization) would really give our military the boost it deserves.

It amounts to the same thing. All federal spending is allocated according to arbitrary and politically driven "formulas" which approximate the results of equalization.

[geoffrey]

Military spending is a great welfare tool actually, gives people a solid career that would otherwise not have one.

Not saying all military people are second class people, most are there because that's what they want to do and our guys/gals are damned good at what they do.

[jbg]

Military spending is a great welfare tool actually, gives people a solid career that would otherwise not have one.

Not saying all military people are second class people, most are there because that's what they want to do and our guys/gals are damned good at what they do.

In my country, military volunteers are often from geographical areas that are economically imploding or chronically depressed, such as upstate New York, the Great Plains states of Kansas through North Dakota, and similar regions. I would not be surprised to see an overweight, in your military, of people from Manitoba, Saskatchewan, and the Atlantic Provinces.