Quote:
Originally Posted by Makarov
As I understand it, the system is based on potential revenues rather than actual revenues (this is certainly the case with respect to tax revenue; I'm just not sure about natural resource revenues.) Anyway, this is interesting. Do you have a source you could point me to so that I could learn more about this?
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Read on page 2 where it says
“With the exception of natural resource revenues, the equalization formula estimates fiscal capacity in each of the above categories by determining how much per capita revenue each province could generate if all provinces had identical tax rates. In the case of natural resource revenues, because of the wide range of resources and royalty structures across the provinces, instead of creating a national average tax rate to measure fiscal capacity, actual resource revenues are used”
http://www.parl.gc.ca/Content/LOP/ResearchPublications/prb0820-e.pdf