The cruel hand of equalization
The time has never been better for the Atlantic provinces to lessen their dependence on federal transfers and to become masters of their own fate. Energy prices are high, shortages are emerging in Canada's major U.S. markets, and the Prime Minister has responded favourably to U.S. requests to speed up the development of new energy supplies. Yet, on average, about 40% of provincial budgets in the four Atlantic provinces still come from federal transfers, most in the form of equalization. AIMS President Brian Crowley and AIMS author Ken Boessenkool outline a straightforward solution to this dilemma in this op-ed piece published in The National Post. Removing nonrenewable natural resources from the equalization formula would provide the Atlantic provinces with the incentive to rely on natural resources development as a centrepiece of their economic strategy in place of pleading for larger transfers from equalization. Gone would be the days when an Atlantic province might forfeit a nickel