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Bill Black: Fraser Institute estimates of federal-provincial transfers overstated

The Government of Canada provides equalization payments to provinces that are less prosperous than the average. These payments are an important aspect of federalism. The federal income tax rates apply equally to people in every province.

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The intention is to help less prosperous (“have-not”) provinces provide core services at a reasonably acceptable level. All provinces receive payments from Ottawa supporting health care and other needs.

In recent years, the main beneficiaries have been Quebec and the Maritime provinces. Due to its offshore oil projects, Newfoundland and Labrador is now a “have” province.

Federal taxes from Alberta, Ontario, and British Columbia have been the main sources of the funds. Alberta’s taxpayers are the biggest source per person.

A report by the Fraser Institute begins with a calculation of amounts transferred to have-not provinces in the years 2007-19. To make the number bigger, they ramp prior years’ amounts up for inflation to 2018. This might be interesting for historians but is not indicative of the current situation.

The opening declaration is deeply flawed: “Equalization forms only a small part of these transfers. Consider Atlantic Canada: over the period from 2007........

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