Ontario to lose equalization payments as Alberta’s economic fortunes fall
Karen Howlett and Jane Taber
A Reset is Needed in Atlantic Canada
AIMS Fellow David MacKinnon suggests that the new government in Ottawa has a unique opportunity to help reset the region out of dependency and into the path of prosperity.
Wealth redistribution has hurt some provinces, says former bureaucrat
Election campaign should focus more on Canada's crumbling "fiscal architecture" among other important, yet ignored, concerns, says AIMS Fellow David McKinnon. By: Robert Benzie
Western premier says scales tipped against rich provinces
Appeared in the New Brunswick Telegraph-Journal.
Radio: Declining Equalization Payments
All three maritime provinces rely heavily on equalization payments from the federal government to fund their programs. Ontario's emergence as a "have-not" province however has placed pressure on the equalization system and is leading to reduced equalization payments as a share of GDP in all three provinces. Last year, approximately two-thirds of all [...]
Radio: Canada’s Equalization Program Needs To Be Reformed
Canada's equalization program is motivated by good intentions. However, it creates perverse incentives for provincial governments to shun sensible economic opportunities. For example, although natural resource development is an important driver of economic growth in Canada and despite several studies that point towards the economic benefit of shale gas development, provincial governments in [...]
These Provinces Can Expect More Unemployment, Less Investment, and Lower Income
AIMS Director of Research Ben Eisen and Fraser Institute Senior Fellow Mark Milke discuss their new paper "Nova Scotia, New Brunswick, and the Equalization Policy Crutch" and argue that evidence from across North America indicates that natural resource development is an important driver of economic growth.
Public Policy Groups Criticize Equalization Grants
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.
The Downside of Equalization
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.
Eisen on the Maritimes, Equalization, and Natural 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.