Alberta and Ontario Must Work Together To Fix Fiscal Federalism in Canada

Ben Eisen, Blog, Commentary, Equalization

The Calgary Herald published a strong editorial over the weekend discussing the need for ongoing cooperation between Alberta and Ontario.

Specifically, the article drew attention to the fact that both Alberta and Ontario are disadvantaged by the existing structures of fiscal federalism in Canada and, more specifically, by equalization and other major intergovernmental transfers. Ontario and Alberta (and British Columbia) face high costs in the delivery of public services, but these costs are not adequately factored into the calculations that determine how much money each province will receive.

The result has been that, in some important respects, governments of the traditional “have-not” provinces have been able to provide public services that are more expansive and accessible than what is available to residents of Alberta, BC and Ontario.

The Frontier Centre has been studying this issue for several years, and a major research paper on the topic that we published in the winter of 2010 can be found here. With the governments of Alberta, BC and Ontario all facing significant budget crunches, the need is even more urgent now than it was then to reform fiscal federalism in this country.