Author Topic: Reforming Canada's Equalization Program  (Read 57 times)

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Offline cybercoma

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Re: Reforming Canada's Equalization Program
« on: February 02, 2017, 01:24:51 pm »
Just to be clear, provinces don't get equalization payments for being broke. This is the biggest misunderstanding about the program. It's about their capacity to fund their social programs at an equitable level to the rest of the country. A province could be flat broke because it 1) doesn't raise enough revenue, or 2) spends too much on programs, or 3) both. However, the equalization program is not dependent on their actual levels of taxation or spending. It's based on a calculated mean for the province, taking into consideration a number of different factors.

More importantly, federal taxation is the same across the board. The federal government collects money and distributes it nation wide as it sees fit and according to the terms of its programs. How much the federal government spends in any given province depends on what those provinces need and what federal programs and infrastructure exist there. NB gets a crapload of money from the federal government for Base Gagetown. However, everyone in Canada pays for its operation. Ontario gets a crapload of money for all of the federal infrastructure and human resources in Ottawa and across the province. Equalization payments are just another form of federal spending and it comes from the same pot of federal taxes that they charge to everyone equitably.