Quote:
Originally Posted by crazy_eoj
It is exactly by province. I don't know what you are trying to say. Maybe check the GOC website?:
" Equalization is the Government of Canada's transfer program for addressing fiscal disparities among provinces. Equalization payments enable less prosperous provincial governments to provide their residents with public services that are reasonably comparable to those in other provinces, at reasonably comparable levels of taxation "
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Essentially, they take all the income tax of all Canadians, and put aside a certain percentage in a big pot earmarked for re-distribution back to the provinces it came from. Instead of Alberta getting say 20% of the total based on amount Alberta resident taxpayers paid in, Alberta gets 10% of the total, and the rest is given to other provinces.
While its not direct lifting of cash from province to province, it is an indirect loss and most definitely a flawed system rewarding bad politics and economics in other provinces, especially Quebec, and punishing growing provinces with high income earners and high infrastructure requirements, like Alberta. If there was no transfer program,
theoretically the money earmarked to the provinces would return to each province by the percentage that their residents paid towards the total. The east would scream and pout, but ironically, with 25 billion dollar annual deficits, its probably something Ontario should be demanding.
Better yet, but file it under never going to happen...federal income tax could be lowered and provincial tax made to compensate... and that would mean billions more per year staying in Alberta.