A few years ago I set up a Google News Alert to monitor stories about Canada’s Equalization program. It seemed to me then (the time of McGuinty’s fairness campaign) that the program was under seige from a number of groups and that would one day ripple into practical implications for places like New Brunswick.
On average I would say there is at least a handful of stories each and every week – mostly in Western Canada – criticizing the unfairness of the equalization program. The public – again mostly in the West – is regailed with stories of how places like New Brunswick have cadillac schools and more doctors per capita – all paid for by Albertans.
This story, however, receives specific mention. It’s an op-ed written by a guy named Ian MacDonald who is a bit of a caped crusader against Equalization (I have seen many articles in his name on this topic over the years). This one is particularly interesting because he names a number of Quebec public services such as $7/day daycare, the low university tuitions, the new funding for free in vitro fertilization and many more – with each being punctuated with “Thanks Alberta” after them.
If you have been reading this blog you will know that I support the Equalization idea – that there should be transfers like this to smooth out ability to provide government services. It’s in nobody’s interest for places like New Brunswick to not be able to fund public services, which will lead to less economic development over time and further the cycle of poor public services and eventually lead to third world conditions inside Canada.
However, we (and Quebec) have gotten really dependent on this program and other more temporary transfer programs and I am increasingly convinced these programs are going to be slowly trimmed back over the next 5-10 years both for fiscal realities and as a direct result of the ongoing public assualt on Equalization.
The last time I mentioned in the media the idea of Equalization as a mechanism to help drive economic development (a hand up vs. a hand out), I was scorned by a UdeM professor who indignantly stated something to the effect that Equalization was never meant to support economic development.
Why not? Why set up a program that penalizes economic development efforts? If New Brunswick generates more own source revenue, the federal equalization program ratchets down almost in parallel. Why? Why not set it at some five year level and agree with the province on strong economic development targets?