National Post Ed. Board on Equalization

Blog, Equalization, David Seymour

Today’s National Post Editorial is entitled “The Budget We’d Like to See.” It includes an endorsement of the direction set out on Equalization by Frontier’s President Peter Holle and Director of Research Marco Navarro-Genie in a Friday Op-ed in the Post.

The whole thing is worth a read, the part on equalization is:

To further demonstrate its bona fides, the government should use this budget to begin reforming Canada’s antiquated and inefficient equalization system. A 5% cut to equalization would yield only a $750-million saving in the coming fiscal year. Still, it would signal to provinces that have become overly dependent on federal cash to fund their social programs. As Peter Holle and Marco Navarro-Genie of Winnipeg’s Frontier Centre for Public Policy pointed out on these pages last Friday, “have-not” provinces have used equalization to grow their civil services, pay for popular social programs such as cheap university tuition and daycare fees and subsidize consumer electricity rates without having to manage their budgets efficiently.

Concurrent with cuts to equalization, the Tories could transfer more taxing power to the provinces. This would enable provinces to continue to pay for their current programs on their own; that is, provided they could convince their voters the programs were still worthwhile when they are no longer heavily subsidized by taxpayers in other provinces.