Ideas Matter – Equalization – Welfare Trap?

Publication, Equalization, Frontier Centre

Equalization is not a simple helping hand. It is rife with perverse incentives similar to those that plague low-income individuals caught in the “welfare trap.” It rewards poorer provinces for forgoing local revenue, instead making them reliant on taxpayers in other parts of the country. It also frustrates democratic accountability: voters and politicians can make spending decisions knowing they will not have to bear the full consequences of those decisions.

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