[Flash Walken]

Originally Posted by Brewmaster

There are a few issues with comparing Alberta to Norway. First one is that Norway is a Nation and is not subject to equalization payments like the province of Alberta. The fact is over $16 billion in equalization were directed to Quebec, Ontario, Manitoba, New Brunswick, Nova Scotia and PEI in the 2013-2014 year. The majority of this money is coming from Alberta.

Another difference is freehold mineral rights. ~20% of the mineral rights in Alberta belong to individuals, companies, reserves or parks. The province does not own these minerals and therefore receives limited revenue from freehold production.

Finally, as is shown in the graph posted by GP_Matt, oil sands is some of the most costly oil in the world to produce. The projects require huge upfront capital commitment years before seeing any return on investment. If Alberta had high royalties and taxes on the early development of these projects, very few of them ever would have gotten off the ground. The statistic that Norway received $46.23/bbl in royalties in 2012 tells me that the economics on their production is not even close to most of what we have in Alberta. There wouldn't be a single viable project in the oil sands if they were paying $46/bbl to the province.

Originally Posted by MarchHare

That's not how equalization works.

Originally Posted by Tinordi

Larf equalization is the reason Alberta mishandled its resource revenue...

Self serving nonsense

Until this year, Ontario would have received about $640 million from Ottawa under a program that protected provinces from seeing transfers drop in any one year — but that option was scrapped by then finance minister Jim Flaherty in December.

Meanwhile, Alberta — Canada's richest province — will see its total rise to $5.2 billion this year from $4.1 billion in 2013-14, a 26.8 per cent increase mostly due to Ottawa moving to a per-capita funding under the Canada Health Transfer program.

The only other province that comes close to Alberta's windfall is Quebec, which will see its total intake from Ottawa rise to $19.6 billion, or 9.9 per cent.

The Liberal government of Ontario has been one of the staunchest critics of the changes, complaining that it is being short-changed on equalization. But the federal government responded it is only applying the formula as adopted.
Both are right, says Mostafa Askari, the assistant PBO, although the federal government is responsible for setting the rules.

“The bottom line is the equalization program has moved away from being an equalization program to being another transfer program, because the way it is designed now it does not equalize to any national standard,” said Askari.
For have-not provinces, “their entitlement will be less, so obviously the larger have-not provinces (like Ontario) will be hit by a larger amount because of their size.”

The PBO looked into the controversial program after a request from Liberal MP Judy Sgro.

Askari said there was little point in examining the bottom line numbers since they are published in the budget each year. Total transfers this year will rise to $62.6 billion from $60.5 billion last year.

But what will surprise many Canadians is how changes introduced by Ottawa has diminished the “progressivity” of the equalization system.

http://www.thestar.com/news/canada/2...hdog_says.html

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