I just heard Finance Minister Jim Flaherty say that the Equalization program as currently structured is unsustainable. The New Brunswick government has relied on tens of millions more each year in Equalization and it is now the single largest source of revenue the province takes in.
The interesting thing is that the program was enriched by Harper when he first got in to appease Quebec. I would be curious to see if this is Harper firing a shot over the bow of Quebeckers so to speak. The Harper giveth. The Harper taketh away. Because any major changes to equalization will be most acutely felt in Quebec because it gets the most (on a dollar basis).
The reality is the Graham, McGuire et. al. were right back in 2006 when they framed the debate about self-sufficiency.
However, they have yet to show a pathway to less equalization. The last forecast I saw predicted additional increases every year until at least 2010/2011.
It’s one thing to know what needs to be done. It’s quite another thing to actually do it.