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Confused about equalization?
Why is it so controversial in #abpoli #ableg when it's by far the SMALLEST transfer the federal government sends provinces?
This book will help: https://books.google.ca/books/about/Fiscal_Federalism_and_Equalization_Polic.html?id=u6UxDwAAQBAJ&printsec=frontcover&source=kp_read_button&redir_esc=y
Why is it so controversial in #abpoli #ableg when it's by far the SMALLEST transfer the federal government sends provinces?
This book will help: https://books.google.ca/books/about/Fiscal_Federalism_and_Equalization_Polic.html?id=u6UxDwAAQBAJ&printsec=frontcover&source=kp_read_button&redir_esc=y
It's short, but like a typical political scientist, I'd focus on the first two chapters. It clearly explains why complaining about equalization legit makes no sense
Skeptical? Let me ask you a few questions.
Do you think Canadians should have access to comparable services no matter where they live?
It no, then equalization is moot. But you'd be in the minority. Most think this is a good principle.
Do you think Canadians should have access to comparable services no matter where they live?
It no, then equalization is moot. But you'd be in the minority. Most think this is a good principle.
If we agree folks should be able to access similar services no matter where they live, then the next question is this:
Who should get to decide the details of those programs?
The constitution gives them to the provinces, and many are ok with that.
Who should get to decide the details of those programs?
The constitution gives them to the provinces, and many are ok with that.
Note that Australia does that differently: most of the details of big programs are tasked to the federal government. It makes them very strong, and their state governments much weaker.
I don't think Canadians have appetite for THAT many constitutional changes.
I don't think Canadians have appetite for THAT many constitutional changes.
So, if we agree on levels of services and responsibility for policy, then we need to talk about the money. What should we do:
-get the feds, with their greater fiscal capacity, to send $$ to provinces who are struggling?
-get rich provinces to directly pay poorer ones?
-get the feds, with their greater fiscal capacity, to send $$ to provinces who are struggling?
-get rich provinces to directly pay poorer ones?
Germany did that second opinion for a long time. Canada never has.
We used that first option, and we follow the idea that provinces get equalization if they're using their fiscal capacity (read: they're taxing people) but still falling short.
We used that first option, and we follow the idea that provinces get equalization if they're using their fiscal capacity (read: they're taxing people) but still falling short.
Note that this is in ADDITION to the two biggest transfers: per capita $$ for health care and social programs
So, say a province is falling short. The question to ask is about fiscal capacity? What is it? Are they using it?
And this is where #abpoli #ableg has a problem: the Alberta Tax Advantage.
We have loads of fiscal capacity. We choose not to use it
And this is where #abpoli #ableg has a problem: the Alberta Tax Advantage.
We have loads of fiscal capacity. We choose not to use it
Think back to when Stephen Harper was Prime Minister. Hit government cut the GST from 7% to 5% to "lend" the fiscal capacity to the provinces. Most if not all with their own sales taxes promptly took that 2%.
Alberta? It's still sitting in the table, unused
Alberta? It's still sitting in the table, unused
Back before #COVID19, #abpoli #ableg's own budget documents said if we were using our fiscal capacity like other provinces we'd have $14+ billion more (read: no deficit, at least at that point) https://www.alberta.ca/alberta-tax-advantage.aspx
What's #sbpoli #ableg doing in response to #COVID19? Part of it is using even LESS of our fiscal capacity than before: https://www.cbc.ca/news/canada/calgary/kenney-economic-reboot-announcement-1.5631088
Here's the problem: some talk about a referendum on this to "force" the feds to negotiate.
That's not who I'd look at. I'd look at the other provinces.
Why would they agree to change this when they do hard work raising $$ that we refuse to do in Alberta?
That's not who I'd look at. I'd look at the other provinces.
Why would they agree to change this when they do hard work raising $$ that we refuse to do in Alberta?
Alberta's anti-equalization argument sounds an awful lot like, "give us this $$, even though we're still richer than you are, and you're taxing in ways we refuse to do. If you don't, it's just not fair!"
Folks, this argument is terrible.
Folks, this argument is terrible.
Let me put this another way.
Last year, I spent 4 months working in Quebec as a visiting scholar. It has a stipend, and in was taxed at Quebec's rates while I was there.
But because I live in Alberta, those taxes were returned to me when I filed my 2019 taxes.
Last year, I spent 4 months working in Quebec as a visiting scholar. It has a stipend, and in was taxed at Quebec's rates while I was there.
But because I live in Alberta, those taxes were returned to me when I filed my 2019 taxes.
My tax return was OBSCENELY high. I should have owed. I got nearly $4K back.
Is this a good thing? I'd rather have childcare capped at $20/day max for everyone. But that's not the point.
The point is that Quebecers pay for that childcare, far more than #abpoli acknowledges
Is this a good thing? I'd rather have childcare capped at $20/day max for everyone. But that's not the point.
The point is that Quebecers pay for that childcare, far more than #abpoli acknowledges
The same holds for EVERY other province.
If Albertans opposed to equalization want to persuade that equalization is unfair, they have to credibly claim Albertans shouldn't pay PROVINCIAL taxes like everyone else does.
I would tell us to STFU. I bet they will, too
If Albertans opposed to equalization want to persuade that equalization is unfair, they have to credibly claim Albertans shouldn't pay PROVINCIAL taxes like everyone else does.
I would tell us to STFU. I bet they will, too
