In the Media

Two independent Canadian public policy groups don’t have much good to say about equalization grants. The Fraser Institute and the Atlantic Institute for Market Studies says the grants act as a disincentive for the development of natural resources in New Brunswick and Nova Scotia. AIMS Director of Research Ben Eisen says equalization makes it easier for “political actors” to turn their backs on developing natural resources, even though they’re a potential source of jobs, revenue, and economic growth.

Equalization in Canada means that Saskatchewan, a "have" province, is sending money to "have-not" provinces like New Brunswick and Nova Scotia. Those two provinces have raked in more than $27 billion in equalization since 2005. And it's those payments, according to the Fraser Institute and the Atlantic Institute for Market Studies, which discourage those provinces from developing their natural resources. Ben Eisen, director of research and programs at AIMS says equalization makes it easier for the two eastern provinces to forgo natural resource development that would help spur economic growth. At the same time, Saskatchewan is developing natural resources here and sending some of that revenue to places like New Brunswick and Nova Scotia. Eisen says if governments there want to help create jobs at home, raise income for workers, and increase tax revenues, they should pursue policies that do not harmfully restrict resource development.

AIMS Director of Research Ben Eisen discusses a paper he coauthored with Mark Milke of the Fraser Institute, wherein they argue that Canada's equalization formula discourages natural resource development.

Last week, a group of university and private sector analysts released a report on shale gas that included an economic study that predicted New Brunswick could create between 5,900 and 7,900 full-time jobs, both directly and indirectly, if the industry annually drilled between 150 and 200 wells. That would translate into between $1.4 billion and $1.8 billion in economic growth. Another report released this week by the Atlantic Institute for Market Studies stated that shale gas could help enrich the region.

An essay published by two of Canada’s leading think-tanks–the Fraser Institute and Atlantic Institute for Market Studies–suggests New Brunswick and Nova Scotia dependence on federal equalization money is acting as a disincentive for natural resource development in those two provinces. New Brunswick has received $14.5 billion in equalization over the past decade and this gift of cash funnelled from the more prosperous regions of Canada still represents close to 40 per cent of provincial revenues.

Equalization is acting as a disincentive for natural resource development in New Brunswick and Nova Scotia, according to a commentary released Tuesday by the Fraser Institute and the Atlantic Institute for Market Studies.

Across almost every major economic indicator, Nova Scotia and New Brunswick under-perform the rest of Canada and rank amongst the poorest regions in the country. Nova Scotia and New Brunswick rank eighth and ninth, respectively, amongst the provinces for average household income. Only Prince Edward Island has a lower average household income level.

The Fraser Institute and the Atlantic Institute for Market Studies will release a new essay on Tuesday about equalization payments, natural resource development, and the economic malaise in Nova Scotia and New Brunswick, and veteran provincial affairs reporter Chris Morris will be on hand to break it down and deliver it to the Telegraph Journal. The essay, “Nova Scotia, New Brunswick, and the Equalization Policy Crutch” examines the effect of the federal equalization program on the two most populous Atlantic provinces.

The Atlantic Institute for Market Studies releasing an essay with the Fraser Institute on how New Brunswick and Nova Scotia rely on equalization payments yet shun natural resource development.