Quebec may not be able to keep its gold-plated welfare state, but either way it is time to break the province’s 55-year “welfare trap” dependence on equalization payments, according to an economic note by the Montreal Economic Institute.
Equalization
Artificially Cheap Hydro Power: Your equalization dollars at work
The federal government paid 34% more equalization to Quebec that it should have under more equitable rules that would treat hydro revenues the same as oil in the equalization formula. Alberta and Ontario taxpayers are effectively paying Quebec (and Manitoba) to consume artificially inexpensive power.
Radical Environmentalism Damages Economies and Lives
The radical green agenda failed long ago. Its damage to environment, economies, education and people’s lives has been enormous.
WA threat to split from Canberra
Premier Colin Barnett says WA will split from Canberra if the Federal Government doesn’t reward the state for driving the national economy.
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Equalization Reform Required
Defenders of equalization in its current form argue the program allows for roughly comparable levels of services in all provinces. Actually, it does not, which is why Ontario Premier Dalton McGuinty has long and justifiably complained about federal transfer programs. New equalization payments to Ontario will not change that.
Have-Not Status Is All About Gaming The Rules
Should Ontario ever change the slogan on its licence plates, it might consider a variation on a certain bank tagline. “We’re richer than you think” would be a balm on the wounded self-esteem of Canada’s newest have-not province.
Ontario Party Would Get Some Federal Attention
Now consider this scenario: The Ontario Party is formed in time for the next federal election and it has a simple focus. What’s good for Ontario is good for the Ontario Party. There are 308 seats in the House of Commons, 106 of them representing Ontario. Just the existence of a credible party from Ontario would force the others to pay attention to us, but if the Ontario Party won even 30 seats, it would effectively prevent any of the big parties from winning a majority.
Canada’s Own Financial Bubbles: Have-Not Provinces
Our regional subsidy system is not transparent, it is not sustainable and it is driven by excess. It is almost by any definition a bubble.
McGuinty and Charest: a fine bromance
“My dispute is with Ottawa,” he told reporters at the end of Ontario Chamber of Commerce “economic summit” to which he had invited Mr. Charest. “Ottawa makes the rules and we have to play by them.” There is a surface logic to this argument but it ignores the fact that Ottawa was hoping in 2006 that the provinces could reach a consensus on equalization reform. It never came.
Three Questions For Ontario Candidates
The vice is tightening on Ontario and unfortunately the federal government is doing much to help it close. Ottawa is still taking about $80 million every working day from Ontario to fund subsidies, including equalization, for Manitoba, Quebec and the Atlantic provinces.
The Death of a Nation
It is one thing to support a people that is oppressed by an authoritarian government and Tibetans are actually in danger of losing their culture. But it is more disturbing when people choose to break up nation-states because they refuse to share their wealth, for linguistic or ethnic reasons.
Equalization a Moral Failure
In our personal lives, we generally recognize three basic moral principles in our economic relationships with others. The first is to do everything we can to ensure that we do not become an unnecessary burden on our neighbours. The second is a core principle adopted from the practice of medicine. It is to do no harm. The third principle is to share where sharing is required but to do so in a way that does not breed dependence. The failure to measure the system against its principal goal means that federal regional subsidies fail this final moral test.
The Genius of Adam Smith
More fundamentally, Smith’s insights remain valid because he was not merely a supporter of markets and a critic of overweening governments, but also a student of human nature. Smith painted humans as complex and often internally conflicted creatures whose prudence, benevolence and ingenuity is nevertheless best encouraged in a free and open society with minimal government, clear laws and strong external defences.