Quote:
Originally Posted by Robbob
At least next year Alberta will probably stop paying into the pot. The 2016-17 equalization calculation apparently is calculated on the last 3 years. One year of boom is still there, so come 2017-2018 we should start seeing some eastern provinces start to sweat.
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It will take a lot more than this recession to have this situation happen. Since the calculation is based on averages Alberta needs to drop below the country average for the province to receive equalization. Alberta has been around 150% of average for the past decade (152.9 in 2012 is the quick wiki number).
What this basically means is the recession will drop Alberta's earning power but it also drops the average so maybe Alberta becomes 120-130% and still be a net contributor. Nothing less than a huge boom in Ontario or Quebec(not going to happen) or depression level events in Alberta (15% unemployment and -10% GDP) will get Alberta below the national average.
You are correct though that it will put a pinch on the provinces that rely on equalization because as the average goes down so does the amounts they end up receiving.. it's just not going to give Alberta any equalization anytime soon.