Equalization makes us poorer, encourages bad policy and fosters bitterness. Unfortunately we can’t just take it out behind the barn and kill it with an axe. It’s wedged into the Constitution and besides, its original purpose of protecting Canadians against the possibility of a provincial government collapsing financially is not unworthy. But we could certainly make it less costly, harmful and unfair.
Satirist P.J. O’Rourke says, “Beyond a certain point complexity is fraud … when someone creates a system in which you can’t tell whether or not you’re being fooled, you’re being fooled.” So take Canada’s multi-billion-dollar equalization program … please. It’s so complicated even experts have trouble with it, and regular citizens are excluded completely.
Equalization doesn’t just reward failure. It encourages it. Seven Canadian provinces were chronic recipients of the program from the very beginning and all have been economic and financial underperformers that bleed ambitious young people to more dynamic parts of the country. Newfoundland and Saskatchewan are no longer recipients of equalization and are struggling to reverse economic and demographic decline, but Quebec, Manitoba and the other three Atlantic provinces are still stuck in it.
In Canada’s fiscal Olympics, large equalization payments constitute the brass, tin and lead medals. They recognize and reward persistent policy failure lasting decades.
Quebec, most of the Atlantic provinces and Manitoba now find themselves fighting Ontario for ownership of the podium.
Canadians have given Quebec a quarter of a trillion dollars in equalization payments since 1957, half of all the money the program has handed out. Over that span of more than 50 years, Quebec has always been the biggest beneficiary, and has never been a net contributor to equalization.
With Pauline Marois and her Parti Quebecois leading in the polls as the province approaches its Sept. 4 election, all that money doesn’t seem to have won us friends or influenced people.