Equalization

Redact All You Want, We’ve Gone Overboard on Equalization

What exactly does the government have to fear from a study of equalization payments? We don’t know. But according to a February report published by the Ontario Chamber of Commerce (“Dollars & Sense: A Case for Modernizing Canada’s Transfer Agreements”), the government has much to fear – most importantly the revelation that Canada’s equalization program now distributes billions of dollars a year to provinces that least need the help.

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Sweden’s Equalization Milk Cow

Sweden’s complex equalization system encourages less successful areas to compound their relative disadvantage in order to maximize payments. They tend to impose higher tax levels, employ more citizens in the public sector and resist reforms in service delivery that have proven successful in the Stockholm area.