Quote:
Originally Posted by V
That's pretty simplistic and incorrect.
The only reason? You would have been more correct to state that Albertans pay more not because they have more resources, but because they exploit those resources and sell them. Quebec has plenty of untapped natural resources simply because equalization incentivizes them to not exploit their natural resources.
Additionally, not all natural resources are treated equally in the equalization formula, and some have-not provinces sell hydro power at artificially low prices to maintain higher equalization payments.
Taxes also play into the equalization formula. Increasing corporate tax rates to minimize development of resources artificially moves a province further into have-not status.
I know I'm far from an expert in this field, but I do know that equalization payments are not decided on one simple variable of how many resources a province has available to exploit. I also know you know that as well, so I'm not sure if you were just aiming for brevity.
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What you have also highlighted is that Alberta's (UCP) own strategy of lowering the corporate tax rate is in fact contributing to larger equalization payments.
Not only did Kenney write the current equalization formula, but when he was in power he took steps that materially increase the amount of equalization payments we ultimately owe to Canada as a province.