On Equalization Rhetoric…

Posted on: Monday, October 28, 2019
Posted at: 3:13 PM

The purpose of this particular post is to address the rhetoric surrounding equalization payments… and believe you me, there is a lot that gets lost in the rhetoric.

Therefore, this post contains links to various federal programs regarding Transfer Payments, as well as to the section of the Canadian Charter of Rights and Freedom which specifically guarantees equalization payments, etc.

Feel free to click through the links and educate yourself about Transfer Payments and what your particular province or territory receives annually from the Government of Canada…

NOTE:

All provinces receive transfer payments, but not all provinces receive equalization payments.

REPEAT: All provinces receive transfer payments, but not all provinces receive equalization payments.

Transfer payments are a collection of payments made by the Government of Canada to Canadian Provinces and Territories under the Federal-Provincial Fiscal Arrangements Act [PDF].

Also included under the Act is the Government of Canada’s Fiscal Stabilization Program, which helps provinces that are facing significant year-over-year declines in their revenues resulting from extraordinary economic downturns.

Transfer payments include, but are not limited to, the Canada Health Transfer (CHT), the Canada Social Transfer (CST), and equalization payments. The CHT and the CST support health care, post-secondary education, social assistance and social services, early childhood development and child care, etc.

REPEAT: All provinces receive transfer payments, but not all provinces receive equalization payments.

FYI:

• Equalization payments have existed since 1957.
• The purpose of equalization payments is to address fiscal disparities that exist across Canada…
• A province that does not receive equalization payments is often referred to as a have province, while one that does is referred to as a have-not province.
• Equalization payments are funded by the Government of Canada, through federal taxes, which are paid by all Canadians.
• Alberta received equalization payments between 1957-1964.
• Worth noting that Alberta received fiscal stabilization payments in 1986, and again in 2016.
• In 2007, the formula-based approach to equalization was reintroduced by the Harper government™, replacing the fixed-sum program.
• In 2009, the Harper government™ changed the equalization payment formula.
• Ontario never received an equalization payment until the financial crisis; Ontario received payments from 2009-2018.
• Per capita, Prince Edward Island has the highest equalization payment; per capita payments are lowest in Ontario.
• Yukon, Northwest Territories, and Nunavut are not included in the equalization program; instead, federal funding is provided through Territorial Formula Financing .

REPEAT: All provinces receive transfer payments, but not all provinces receive equalization payments.

The Government of Canada is bound by the Canadian Charter of Rights and Freedoms, AKA the Constitution, since 1982, to ensure equalization payments, if needed.

The Canadian Charter of Rights and Freedoms [PDF], Section 36 states:

(1) Without altering the legislative authority of Parliament or of the provincial legislatures, or the rights of any of them with respect to the exercise of their legislative authority, Parliament and the legislatures, together with the government of Canada and the provincial governments, are committed to:

(a) promoting equal opportunities for the well-being of Canadians;
(b) furthering economic development to reduce disparity in opportunities; and
(c) providing essential public services of reasonable quality to all Canadians.

(2) Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

For 2019-2020, the following provinces will receive equalization payments:

• Prince Edward Island
• Nova Scotia
• New Brunswick
• Québec
• Manitoba

REPEAT: All provinces receive transfer payments, but not all provinces receive equalization payments.

For 2019-2020, the following provinces will not receive equalization payments:

• Newfoundland and Labrador
• Ontario
• Saskatchewan
• Alberta
• British Columbia

REPEAT: All provinces receive transfer payments, but not all provinces receive equalization payments.

2019-10-28  »  somecanuckchick