# Equalization payouts



## zylon (Oct 27, 2010)

If these numbers were listed in a newspaper article, my eyes would glaze over and I would skip the story. But show me a picture, and the numbers jump out at me - one in particular. I won't mention any names.

This is from @PremierBradWall which is why SK is shown in green.


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## zylon (Oct 27, 2010)

I haven't been able to find the *per capita benefit* for 2017.

In 2012 the per capita benefit was a follows:


PEI $ 2,350
NB .. 1,985
MB .. 1,353
NS .. 1,342
QC .... 934
ON .... 246






Source: https://en.wikipedia.org/wiki/Equalization_payments_in_Canada


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## AltaRed (Jun 8, 2009)

The situation is quite obscene given the state of affairs in the resource provinces but that is the fault of the equalization formula which is based on a lagging 3 year rolling average


> A province’s Equalization payment in any given year is based on a weighted three year moving average, lagged by two years. For example, the actual payment for a province in 2013–2014 is the sum of 50% of its payment for 2011–2012, 25% of its payment for 2010–2011 and 25% of its payment for 2009–2010.
> 
> This weighted moving average was introduced in 2007 to stabilize year-to-year fluctuations in provincial Equalization payments, and thus to address the volatility and uncertainty that was a feature of the pre-2004 formula. Using data that are at least two years old in the weighted average eliminates the need to recalculate payments each time those data are revised. Under the pre-2004 formula, the frequent revision of Equalization payments made it difficult for provincial governments to plan their budget.


. 

Three of the 4 provinces paying $18 Billion to everyone else this next fiscal year are hurting badly. I agree with a comment made somewhere that suggests the paying provinces ship the dollars through proposed pipelines. Wonder how QC will get its dollars from Energy East. Current recipients better get their fiscal houses in order fast because over the 2018-2020 period, there could be next to nothing coming from the previously productive udders of AB, SK and NF during that time frame.

Source: http://www.lop.parl.gc.ca/Content/LOP/ResearchPublications/2008-20-e.htm


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## bobsyouruncle (Dec 25, 2016)

Time for the west to split.

Then we can run a globally competitive economy, and save money on no French signage, labeling, etc.


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## new dog (Jun 21, 2016)

What ticks me off is in BC we have to pay annual premiums for health care for the family and Quebec does not have to. I believe Quebec also give some dental coverage to children under 10 which BC does not get. My problem is we should receive this first before giving money to them and they get it.


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## AltaRed (Jun 8, 2009)

new dog said:


> What ticks me off is in BC we have to pay annual premiums for health care for the family and Quebec does not have to. I believe Quebec also give some dental coverage to children under 10 which BC does not get. My problem is we should receive this first before giving money to them and they get it.


Except I think it is choice how a province delivers health and education. Quebec could reduce its income tax rates and then apply a health premium to all its residents... or BC could choose to increase its income tax rates and eliminate health premiums. It is a question of how a province wants to distribute its pain. It is not necessarily a question of providing more services at the expense of AB paying for them necessarily.

The various modifiers in the formula (see my link) is what could be worrisome. What happens in 2-3 years when the amount AB, SK and NF pay into the system diminishes because of loss of fiscal capacity in 2015-2017? Who picks up the slack? Or do total payments go down? Who continues to fund the cheques of perennial long time 'losers' in at least 4 provinces (NS, NB, PEI, QC)? How much does the bumbling gov't of ON cost those paying into the system?

Rumour has it that QC's hydro generating 'resource' revenues are exempt from being counted in fiscal capacity. I don't know if that is fact, but if it is, that is an obscene omission.


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## ian (Jun 18, 2016)

Just read an article on Muscrat Falls. The author's view is that this NL project is so bad that at some point the Federal Government will have to step in and bail out Newfoundland. Then watch the transfer payments. This is multiple billions for a mis managed project from day 1. Not dissimilar to Ontario's nuclear plant disasters. The difference being that Ontario had the population and the tax base to absorb the mess. NL unfortunately does not.

http://www.cbc.ca/news/canada/newfo...ls-will-need-bailout-says-professor-1.3925582


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## jargey3000 (Jan 25, 2011)

ian said:


> Just read an article on Muscrat Falls. The author's view is that this NL project is so bad that at some point the Federal Government will have to step in and bail out Newfoundland. Then watch the transfer payments. This is multiple billions for a mis managed project from day 1. Not dissimilar to Ontario's nuclear plant disasters. The difference being that Ontario had the population and the tax base to absorb the mess. NL unfortunately does not.
> 
> http://www.cbc.ca/news/canada/newfo...ls-will-need-bailout-says-professor-1.3925582


....as my (now-deceased) mom used to say...."There's no hope for this place!"....how right she was....
This - from CBC- during the hey-day of our "oil boom":
http://www.cbc.ca/news/canada/newfo...people-in-newfoundland-and-labrador-1.1191722


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## m3s (Apr 3, 2010)

The intent of equalization payments was to allow smaller provinces to have similar public services at comparable levels of taxation. Having lived in both Alberta and Quebec, the latter has far more public services (seemingly designed only to encourage French population growth and discourage any others..)



ian said:


> Just read an article on Muscrat Falls. The author's view is that this NL project is so bad that at some point the Federal Government will have to step in and bail out Newfoundland. Then watch the transfer payments. This is multiple billions for a mis managed project from day 1. Not dissimilar to Ontario's nuclear plant disasters. The difference being that Ontario had the population and the tax base to absorb the mess. NL unfortunately does not.


Similar to Quebec refusing Alberta to pipe oil through to the east, they also refused to let NL transmit the electricity through existing lines to the south. I doubt it's cheap to build that new power line from Goose Bay to NL to NS.. and unnecesary destruction of previously untouched land

Quebec has resources but no incentive to become a "have" province. They have received +50% of all equalization payments but represent -25% of the population. If Quebec did become a "have province", the idea of funding the west would most certainly result in another referendum


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## AltaRed (Jun 8, 2009)

^++1 No kidding! What a hypocrite QC has been for decades upon decades.


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## ian (Jun 18, 2016)

Absolutely agree with you about public services in Quebec vs Alberta. Have lived in both and there is a substantial difference. Especially if you have children.


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## m3s (Apr 3, 2010)

Notes from ground zero

Quebecers squabble over what social programs to spend their Billions of surplus money on

Maybe Alberta could learn a thing or two from these cats


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## olivaw (Nov 21, 2010)

I have lived in both provinces too. 

Quebec squabbles about which social programs to spend on. 

Alberta squabbles about which industries to subsidize

Neither gets it right.


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## m3s (Apr 3, 2010)

True.

I do miss Saskatchewan. Much less squabbles when the government sends each driver a cheque from their SGI profits at the end of the year.

Still waiting for that ticket to BC


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## sags (May 15, 2010)

Kind of a meaningless chart and numbers when it isn't in context.

Saskatchewan has a population of 1.5 million people.

Ontario has a population of 13.1 million people.

Ontario gets 1 Billion in transfer payments but sends a whole lot more revenue to Ottawa than Saskatchewan.


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## humble_pie (Jun 7, 2009)

m3s said:


> Still waiting for that ticket to BC



someone would migrate to BC because the transfer payment situation is so seductive?

now that's a first for any province

time was folks used to migrate to BC for the stunning geography. But i guess these days a stable transfer payments base will trump a rocky muntain high every time.

.


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## OnlyMyOpinion (Sep 1, 2013)

m3s said:


> Notes from ground zero
> Quebecers squabble over what social programs to spend their Billions of surplus money on
> Maybe Alberta could learn a thing or two from these cats


Alberta sent Quebec their billions (via transfer payments). 
I hope they can adjust to their coming austerity, They'll soon be squabbling over what social programs to cut.


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## m3s (Apr 3, 2010)

humble_pie said:


> someone would migrate to BC because the transfer payment situation is so seductive?


I'll take my $7,000 income tax refund and spend it exploring the mountains. I'll live in a van if I have to



OnlyMyOpinion said:


> Alberta sent Quebec their billions (via transfer payments).


Exactly. I just find it baffling to hear to the local radio talk like they're running a multi-billion surplus


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## OnlyMyOpinion (Sep 1, 2013)

Lighting this fuse again: Quebec to receive $1.4-billion equalization boost while oil-producing provinces face deficits

_Quebec will receive $13.1-billion in equalization payments next year – a $1.4-billion increase...
The three energy-producing provinces petitioned Ottawa last year to rework the federal transfer formula but Finance Minister Bill Morneau resisted and locked in the existing rules for five years.
Four other provinces will receive equalization payments next year, including $2.3-billion to Manitoba, $2-billion each for New Brunswick and Nova Scotia and $419-million for Prince Edward Island.
The governments of Alberta, Saskatchewan and Newfoundland and Labrador – where government finances are heavily influenced by the state of the energy sector – are all running budget deficits. In contrast, Quebec’s recently elected Coalition Avenir Québec government announced last month that the province’s finances for the year were sitting at a $3-billion surplus, although it later cautioned that the year-end figure could be lower._

But the part I like best: Legault wants nothing to do with oil pipelines other premiers crave

_Arriving for what is shaping up to be an acrimonious meeting of Canada’s first ministers in Montreal and where some of his counterparts want oil moved up on the agenda, Legault signalled that it’s a nonstarter for Quebec.
“There are some who maybe will want to talk about petroleum. I am going to talk to them about hydro electricity,” Legault said arriving at the downtown Sheraton Hotel for meetings.
Asked more specifically if he has any interest in resurrecting the failed Energy East pipeline proposal which TransCanada abandoned last year citing regulatory hurdles — and which was staunchly opposed in Quebec — Legault slammed the door.
“There’s no social acceptability (for oil) in Quebec,” Legault told reporters._

Hmm, so those tankers of foreign oil are accepted (and used) by whom? 
Rail cars full of Bakken oil still cross what provinces?

Insular and entitled is an understatement.


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## peterk (May 16, 2010)

Oh great news lol

To me the most annoying part isn't even the economic and social unfairness of it all, the producers providing so the takers can continually live in delusion... It's the fact that the productive regions are all unpleasant shitholes - while the worst offenders - Western BC and the island, urban Quebec, all of the Martimes, and more Ontario, are all the most geographically beautiful, culturally developed, architecturally and historically significant regions of the country.

The tax payers all get the privilege of living in either the desolate rural or semi-urban prairies or the soul crushing cores of Toronto and Vancouver.


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## kcowan (Jul 1, 2010)

> Insular and entitled is an understatement.


It seems clear to me that the Liberals do not even attempt to represent all Canadians. I wonder who they think they are representing?


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## sags (May 15, 2010)

Where did all the Provincial royalty money go ?


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## sags (May 15, 2010)

Alberta doesn't send money to Ottawa or Quebec for transfer payments.

_The most important thing to remember in all of this is that the federal government pays for equalization, and it does it out of the same general revenue pool used to fund all of its programs and services. In other words, every Canadian that pays federal taxes contributes to equalization payments on the exact same basis. A rich person in Quebec or New Brunswick will contribute more to equalization than a less wealthy person in Alberta or Saskatchewan. And because there are more Ontarians paying federal taxes than Albertans, more dollars for equalization actually come from Ontario than Alberta._

http://www.vueweekly.com/alberta-do...ts-and-ontario-contributes-more-than-alberta/


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## ian (Jun 18, 2016)

Some Albertan politicians love to claim that the Alberta Gov't is sending boatloads of money to Ottawa for equalization payments. This is patently false. They also like to intimate that this is a Liberal plot.

The facts are somewhat different. First of all, the current equalization formula was actually established and passed by the Harper Conservative Gov't. Our own Alberta UCP leader was a Harper Cabinet minister at the time and he voted for this formula. As did the other Alberta Conservative MP's. But, like most politicians his/their memory is somewhat dim on these details when they prove to be inconvenient.

The payments are funded from Federal tax revenues, including income tax. So essentially every taxpayer in Canada, most especially those the highest tax bracket, fund these payments. 

Some politicians in our part of the world like to present this in a false light. They very much like to imply that a payment is being made by their Province, out of Provincial revenues to fund equalization. This is a complete deliberate falsehood. It reminds me a little of the gay marriage issue when several Provincial Premiums were quite vocal in publicly advocating against it (include Alberta's Klein) while at the same time they (including Alberta) had been quietly requesting the Federal Justice Minister to hurry up and pass legislation allowing for gay marriage for some time. The goal being to save legal fees on challenges to the then current laws in the knowledge that these challenges would be successful and to move the heat to the Feds.


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## AltaRed (Jun 8, 2009)

AB taxpayers pay more indirectly because they pay higher income taxes per capita to Ottawa than anyone else and get less back in transfers. That is well known. Equalization does come out of federal coffers, so it is true AB is not feeding equalization directly. There remains, however, a very significant gap however on net-net numbers... funds that would stay in AB if it was independent.

This article explains it in layman language. https://nationalpost.com/news/canad...eeced-by-ottawa-just-not-in-the-way-you-think


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## kcowan (Jul 1, 2010)

AltaRed said:


> This article explains it in layman language. https://nationalpost.com/news/canad...eeced-by-ottawa-just-not-in-the-way-you-think


Thanks for the post Red. I am surprised to see that you represent part of the problem. I have another friend in Calgary who is moving to BC in the spring. Right now he is at his Condo in Baja Sur.


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