Canada has long contested policy choices in regards to equalization payments. Equalization is the central government of Canada making equalizing payments to Canadian provinces that are less wealthy than others in order to equalize all the provinces’ fiscal capacity. Provinces that receive equalization payments have traditionally been referred to as “have not provinces” as opposed to “have provinces”. The program of equalization was created with equality between provinces as its aim however with the federalism dynamics of the Canadian political system, equalization has inflamed regional tension due to perceived inequalities created by the program. There are political, economic, and equity dimensions and implications to equalization and each
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Ultimately the political, economic, and equity dimensions of have increased regional tensions in Canada. Equalization is perceived to be a “confiscatory” program (Lecours 575). Provinces with oil and gas industries argue that factoring natural resources into the equalization formula is outright unfair. Because of the diversity between Canadian provinces, each province has very specific and unique needs from the federal government. The current equalization formula fails to account for the differing perspectives between regions of Canada. This leads to frustration from the specific provinces, as provinces receiving equalization payments are perceived to be favored by the federal …show more content…
However, equalization as it currently is implemented in Canada’s federalist system has achieved none of the above. Poorer provinces are growing at a rate faster than that of richer provinces. Fiscal spending per capita greatly favors the Atlantic Provinces in comparison to B.C. and Alberta. Additionally, the equalization program has become a bargaining tool for the federal government to gain electoral support. Finally, equalization has increased feelings of western alienation and resentment for the federal government as the provincial governments of B.C. and Alberta continue to be the highest contributors to the program. It is for these reasons that equalization as it currently stands is not an appropriate fiscal balancing program for
Ultimately the political, economic, and equity dimensions of have increased regional tensions in Canada. Equalization is perceived to be a “confiscatory” program (Lecours 575). Provinces with oil and gas industries argue that factoring natural resources into the equalization formula is outright unfair. Because of the diversity between Canadian provinces, each province has very specific and unique needs from the federal government. The current equalization formula fails to account for the differing perspectives between regions of Canada. This leads to frustration from the specific provinces, as provinces receiving equalization payments are perceived to be favored by the federal …show more content…
However, equalization as it currently is implemented in Canada’s federalist system has achieved none of the above. Poorer provinces are growing at a rate faster than that of richer provinces. Fiscal spending per capita greatly favors the Atlantic Provinces in comparison to B.C. and Alberta. Additionally, the equalization program has become a bargaining tool for the federal government to gain electoral support. Finally, equalization has increased feelings of western alienation and resentment for the federal government as the provincial governments of B.C. and Alberta continue to be the highest contributors to the program. It is for these reasons that equalization as it currently stands is not an appropriate fiscal balancing program for