Quote:
Originally Posted by CaptainCrunch
Great then lets follow their lead, lets cut all government salaries and change our tax rates. But that doesn't change that the equalization formula is not working when a province running a surplus and a economy that's not in jeopardy is getting a 10% increase in the money they're receiving, and receiving 2/3rds of the pot.
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Whether or not a province is running a surplus or a deficit shouldn't really be a consideration in the formula as it can simultaneously punish provinces for being fiscally prudent (slashing services, raising taxes, attempting to use surpluses to pay down debt) and encourage others to spend recklessly. Which is why it is ignored. Alberta could institute a 5% sales tax, still the lowest in the country to maintain 'the Alberta advantage' and solve a major part of the balance sheet problem, so why don't we just do that before complaining other places have things better because of equalization?
Similarly, what metrics are used to judge economic health?
Alberta you'd consider in jeopardy because our unemployment rate is high, and Quebec's not because theirs is low? We have the highest employment and participation rate in the country, the latter helping to contribute to the higher unemployment. And the people who are employed get some high wages compared to the rest of the country. So looking at stuff like that, in a province with low income taxes and not much urgency to change them, and no sales tax and no urgency to change it, why would people believe things are as bad as we say? 'Just because things aren't in a boom doesn't mean they're bad. Things are still better than in most of Ontario or Quebec or virtually all of Atlantic Canada.'
So I guess my point is if we're going to go into negotiations, what are we negotiating for? 'A more fair formula' means what, exactly? Okay, adjust the hydro rates to put everybody on the same page that way, but what does that really affect? What if that barely shifts the needle, everybody is treated equally and it's still basically the same because there aren't many ways to make Alberta's position look objectively worse than the rest of the country? Will that satiate the mob?
Is the end game a 'more fair formula even if it means things don't really change that much' or is the end goal '#### Quebec'? Until the outcome is clearly defined, we can't really expect to have any leverage in negotiations we definitely can't just drag the feds into.