Equalization is broken and discouraging economic growth

Subhead:The Buffalo Roundtable, featuring Sheila Gunn Reid, Tamara Lich and Stockwell Day, break down how Canada's equalization system is discouraging economic growth through provinces deliberately refusing to develop their natural resources.# YouTube-embed:SlP91CO8oSo The Fraser Institute has released a report declaring that equalization is broken. In 15 of the last 25 years, one or more provinces with higher living standards received equalization payments while provinces with lower per-capita GDP received nothing. The most glaring example: Ontario collected payments from 2009 to 2018 while British Columbia — which had a lower GDP per person than Ontario in each of those 10 years — received zero. Former federal Opposition leader and Alberta finance minister Stockwell Day joined the Buffalo Roundtable on Wednesday to break it down alongside hosts Sheila Gunn Reid and Tamara Lich. "If you can't raise taxes in your province because of bad economic policy, you shouldn't be bailed out and subsidized by other provinces who are willing to be more fiscally prudent," Day said. The former Reform Party leader pointed to Bob Rae's NDP government in Ontario in 1993 as a case study. There, socialist economic policies drove away entrepreneurs and investors while Alberta, under Ralph Klein, was cutting costs, lowering taxes and attracting business.

Equalization is broken and discouraging economic growth The Buffalo Roundtable, featuring Sheila Gunn Reid, Tamara Lich and Stockwell Day, break down how Canada's equalization system is discouraging economic growth through provinces deliberately refusing to develop their natural resources. The Fraser Institute has released a report declaring that equalization is broken. In 15 of the last 25 years, one or more provinces with higher living standards received equalization payments while provinces with lower per-capita GDP received nothing.

The most glaring example: Ontario collected payments from 2009 to 2018 while British Columbia — which had a lower GDP per person than Ontario in each of those 10 years — received zero. Former federal Opposition leader and Alberta finance minister Stockwell Day joined the Buffalo Roundtable on Wednesday to break it down alongside hosts Sheila Gunn Reid and Tamara Lich. "If you can't raise taxes in your province because of bad economic policy, you shouldn't be bailed out and subsidized by other provinces who are willing to be more fiscally prudent," Day said.

The former Reform Party leader pointed to Bob Rae's NDP government in Ontario in 1993 as a case study. There, socialist economic policies drove away entrepreneurs and investors while Alberta, under Ralph Klein, was cutting costs, lowering taxes and attracting business. Sheila added that the formula also fails to account for provinces that deliberately refuse to develop their own natural resources — noting Quebec's undeveloped natural gas fields while it collects equalization drawn from Alberta's oil revenues.

The Buffalo panel also reacted to good news: Alberta is responsible for nearly 80% of all new jobs created in Canada, with 2,677,000 people employed as of last month, up 3% from the previous year, compared to just half a percentage point nationally and comes after Meta announced its largest ever foreign investment will be in Alberta. Day called it "fantastic news" and noted that 40% of the world's 3.5 billion internet users rely on Meta products. "Alberta lands this one," he said, adding that the federal Liberals would inevitably claim credit but that Alberta would benefit regardless.

Sheila and Tamara noted the Meta deal proves a straightforward point: remove the roadblocks facing the oil and gas sector and private capital flows in. "This is just a prime example of what happens when you move all that," Tamara said. The Buffalo Roundtable, where weekly guests join Rebel News hosts to discuss the top issues facing Western Canada, airs live every Wednesday at 11 a.m. MT / 1 p.m. ET.

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