Trudeau: “Canada isn’t doing well right now because it’s Albertans who control...

[Zulu29]

Originally Posted by Rerun

Actually I think it might be something that Ralph Klein said.

Which if you look up was in reference to the NEP....

[Makarov]

Originally Posted by V

Well, this just isn't true, period, and I'm pretty sure you know that. Alberta has been middle of the road to upper tier, although they've averaged about 4th since 2000. Nothing outlandish. Considering they have the highest provincial GDP, I'd say it's pretty impressive that they've been able to avoid anywhere near the top spot.

I find it odd that you cherrypick your information. You don't need to, your points are usually valid without it.

http://parklandinstitute.ca/download...ingTheMyth.pdf

http://taxpayer.com/sites/default/fi...nf%20Adj_0.pdf

I wasn't cherry-picking. I was just being lazy. I based that statement on an interesting article I remembered reading during the election in Alberta (Does Alberta have a Spending Problem by the University of Calgary's School of Public Policy). According to that article (based on StatsCan data), in terms of program spending (i.e., not including debt servicing), Alberta spends more per capita than any other province except Newfoundland. So, yes, I was too lazy to refer the article again and just lazily stated that Alberta spent the most. Sorry about that but I hope that my point still stands.

(Incidentally, I'm not criticizing the Alberta government for spending a lot on programs. It can afford to so it should. However, its a bit rich for Albertans, who enjoy some of the most generous provincial programs with no sales tax and low income taxes, to tell "entitled" Quebeckers to suck it up and tighten their belts.)

[Makarov]

Originally Posted by SeoulFire

There is a difference between understanding and not agreeing with them. Never have and probably never will believe in propping up the unsustainable and taking away any real incentive to improve or develop. There are also a number of good arguments/criticisms on why they do not work and are not efficient....

Nor have I ever believed in the ability of the federal government to construct any policies that are for the benefit of Canadians as a whole and not just the regions key to getting elected. The west always has and always will be neglected, ignored, or screwed as the voter strength is just not sufficient for the fed parties to care.

As noted already, Alberta was a net equalization recipient for a decade and yet was able to develop its economy enough to become the "Prairie Tiger" that it is today. Indeed, the author of the article I posted earlier comes to the following conclusions regarding the argument that equalization stifles innovation and growth or creates a culture of dependency in recipient provinces:

Concern has been expressed about Equalization causing recipient provinces to become dependent upon transfers and that Equalization ######s economic adjustment and growth. Here we look at some broad indicators that may provide evidence on this issue. All provinces have received Equalization at some time. However, only five provinces have consistently received Equalization during the existence of the program. Those provinces are Prince Edward Island, Nova Scotia, New Brunswick, Quebec and Manitoba. We call those the ‘core’ recipient provinces. Attention is focused on them because it is there that negative consequences should be most apparent.

First considered is the importance of Equalization payments to provincial revenues. That trend is shown in Figure 12, below. While there is some variation over the years,there does not appear to be any trend in the core recipient provinces towards greater dependency on Equalization payments as a source of provincial revenues.

Another indicator is the size of Equalization relative to gross domestic provincial product (GDPP). That trend is reported in Figure 13, below. Again, although there is some fluctuation, no trend is apparent. In particular, over a 29 year period, Equalization does not appear to be becoming a more important source of provincial output. But, neither is there evidence of it becoming less
important.

A lack of relative improvement in economic productivity – that is, a lack of convergence towards the mean – would be a better indicator of a detrimental impact of Equalization on the recipients’ economies. The trend in relative GDPP
is a measure that provides insight. However, the comparison is more complicated than might be anticipated. Alberta, especially, has experienced rapid growth and large increases in GDPP per capita during its latest boom. Swings in energy prices and the accompanying booms and busts are sufficiently large that even Canadian per capita GDP reflects those cycles and makes comparison to that national standard difficult to interpret. Hence, the first indicator of relative productivity reported here is the per capita GDPP of the core provinces as a percentage of GDP per capita in Canada excluding Alberta. That is shown in Figure 14, below, for the years 1981 to 2009. Despite resource booms in other provinces besides Alberta, there is a gradual upward trend suggesting that per capita GDPP in the core recipient provinces is improving. An alternate comparator is Ontario, a province with a productive economy although lacking in natural resource revenues. The trend relative to Ontario’s per capita GDPP is shown in Figure 15, below. That figure shows the recipient provinces’ per capita GDPP declining relative to Ontario’s during the 1980s but, after 1989, increasing and, over 20 years, moving from about 75 percent to 87 percent of the Ontario levels. Thus, the per capita GDPP indicators imply that the core recipients economies are improving relatively despite the fact that resource rich provincial economies, notably Alberta’s, are performing better.

Summarizing this section:
 The provincial governments and economies of the five core Equalization
recipient provinces do not appear to be becoming more dependent on
Equalization payments over the past 25 to 30 years.

 Rather than stagnating, the per capita GDPP figures suggest that the core
recipient provinces’ provincial economies are improving and improving
relatively.

LINK

Obviously, those conclusions are not gospel, but I don't see a lot of evidence that equalization acts as a disincentive to innovation or economic growth. Indeed, it may be that the opposite is true.

[HPLovecraft]

Makarov has posted some really quality information in here. From reading this thread, it's my conclusion that he's about the only one in here actually educated on the topic beyond personal opinions. Good stuff.

[SeoulFire]

Originally Posted by HPLovecraft

Makarov has posted some really quality information in here. From reading this thread, it's my conclusion that he's about the only one in here actually educated on the topic beyond personal opinions. Good stuff.

It all depends on the personal spin and the source of the information. Tons of information on this at the Fraser Institute questioning the efficiency, equality, equity, legality, etc and it also provides some models of reform to improve the system - not just to abolish it.

The articles are there with a different perspective than the ones posted but I doubt they would be of interest to those with a left-leaning, socialist, free **** for everybody slant.

[Rerun]

nm ... wrong thread.

[Makarov]

Originally Posted by SeoulFire

It all depends on the personal spin and the source of the information. Tons of information on this at the Fraser Institute questioning the efficiency, equality, equity, legality, etc and it also provides some models of reform to improve the system - not just to abolish it.

The mere existence of "information" is not particularly persuasive. If that "information" is incorrect, incomplete, or irrelevant, or if the conclusions drawn in that "information" do not logically follow from the data, it has little or no value (indeed, it may have negative value in the sense that it is misleading or distracts from the real issues.) Case in point: the Fraser Institute.

Originally Posted by SeoulFire

The articles are there with a different perspective than the ones posted but I doubt they would be of interest to those with a left-leaning, socialist, free **** for everybody slant.

Quite the contrary. Your reference to information published by the Fraser Institute piqued my interest so I decided to take a look. The first article I found is entitled "Some Inconvenient Facts about Equalization".

I'll quickly discuss each "inconvenient fact" (and I apologize for turning the Trudeau thread into the equalization thread; perhaps a mod should split this discussion into a new thread?):

(1) Inconvenient Fact #1: Canada’s founders didn’t want transfers between governments;

Well, this is an easy one to dismiss because it is totally irrelevant to a discussion of the merits of the equalization program.

(2) Inconvenient Fact #2: Public services are often more generous in havenot provinces;

In support of this "inconvenient fact", the article relies on the following evidence:

In theory, as Section 36(2) of the Constitution Act, 1982 states, equalization is meant to “provide reasonably comparable levels of public services at reasonably comparable levels of taxation” (Department of Justice, undated). In practice, nothing of the sort occurs.

For example, Quebec, the biggest equalization recipient (which receives almost half of the $14.8 billion federal transfer to six provinces), also has the lowest tuition fees for post-secondary education among all the provinces (Statistics Canada, 2011). It also has universal $7 per day daycare (Quebec, undated). One of the more comprehensive studies (Eisen and Milke, 2010) noted how social and government services including the above-noted benefits in Quebec and other “have-not” provinces, are actually often more generous and lavish in such provinces when compared to the “have” provinces such as Alberta and British Columbia.

As has already been pointed out in this thread, this is simply incorrect. The natural resource rich provinces of Newfoundland, Alberta, Saskatchewan, ec. all spend more on social programs than the other provinces. Cherry-picking particular programs is incomplete, incorrect, and totally misleading.

The authors also state:

This policy means that low-income taxpayers in “have” provinces pay for the benefits of the well-off in recipient provinces. That’s an indefensible transfer of income and is fiscally Kafkaesque—think of a waitress in Vancouver whose federal taxes are partly transferred to “have-not” provincial governments.

This completely ignores two key facts: (1) equalization accounts for a small portion of federal government expenditures (roughly 5%); and, (2) Canada has a progressive tax code, which means that high wage earners in a havenot province pay many, many times more taxes than low wage earners in a have province. This means that, totally contrary to the authors' assertion, high wage earners in havenot provinces subsidize the services of low income wage earners in have provinces (as they should.)

(3) Inconvenient Fact #3: Equalization is actually a transfer of wealth from high-cost provinces to low-cost provinces;

In support of this fact, the authors state:

For example, in so-called “have-not” provinces, and according to a Royal LePage survey of housing prices in the first quarter of 2012, a bungalow in Halifax, Charlottetown, Saint John, Quebec City, Montreal, and Winnipeg varies in price from a low of $170,000 (in Charlottetown) to a high of $380,000 (in Quebec City’s most expensive neighbourhood; a similar bungalow goes for $239,000 in that city’s cheapest neighbourhood). In contrast, in “have” provinces a similar bungalow will set a buyer back between $291,700 and $697,800 in Calgary; and between $477,000 and $1.4 million in greater Vancouver (Royal LePage, 2012).

Equalization is supposed to reduce inequalities in government services. However, because costs are lower in “have-not” provinces, services can be provided at a lower cost—a civil servant needs a much higher salary in Vancouver than Charlottetown for an equivalent standard of living. Thus “equalizing” funds available for services means recipient provinces can afford a higher level of services than the provinces that fund them (McMahon, 2001 and 2011).

It sounds like a plausible argument. Unfortunately, a real estate price survey from Royal LePage has exactly nothing to do with the cost of delivering public services in different provinces. A much more relevant statistic (although surely not the only one) would be average public sector wages in each province. Curiously, those statistics do not support the authors' argument. For example, PEI, Nova Scotia, and New Brunswick (all havenot provinces) have the third, fourth, and fifth highest average public sector wages. BC and Ontario (traditionally have provinces) have the two lowest (Alberta is fourth lowest.) [Source (not the best source but I don't have time to look for anything more authoritative.] Therefore there does not appear to be any correlation between equalization status and the cost of delivering public services.

(4) Inconvenient Fact #4: Transfer programs weaken the economies of poorer provinces;

The authors rely exclusively on a "series of studies by Fred McMahon" which apparently show that:

As pointed out in a series of studies by Fred McMahon, lagging regions in Canada have been catching up more slowly than poorer regions in the United States, Europe, and Asia (2001). In fact, “over-equalization” weakens the economies of poorer provinces.

Unfortunately, this fact, if true, means nothing without knowing if there are any sort of "equalization" programs present in these regions, or what other factors might be influencing "catch up" of poorer regions to more productive regions (such as rapid industrialization in Eastern Europe and Asia, etc.).

I would also note that Fred McMahon, whose studies are cited and relied on in the article, is also one of the two co-authors of the article. It seems a bit disingenuous for Mr. McMahon to simply cite himself but not to provide any of the data or arguments that ultimately underlie his position in this article.

(5) Inconvenient Fact #5: Equalization is likely not enforceable in court;

This may well be true. However, it is again totally irrelevant to a discussion of the merits of the program itself.

There are a couple of other articles on equalization published by the Fraser Institute that I am curious to look at, but I will have to do so when I have more time (or, if there is one in particular that you (SeoulFire, or anyone else) found persuasive, please recommend it to me and I'll take a look and see if it changes my mind.)

[crazy_eoj]

Originally Posted by Makarov

As noted already, Alberta was a net equalization recipient for a decade and yet was able to develop its economy enough to become the "Prairie Tiger" that it is today. Indeed, the author of the article I posted earlier comes to the following conclusions regarding the argument that equalization stifles innovation and growth or creates a culture of dependency in recipient provinces:



LINK

Obviously, those conclusions are not gospel, but I don't see a lot of evidence that equalization acts as a disincentive to innovation or economic growth. Indeed, it may be that the opposite is true.

Doesn't the two points you have posted just show that even though the recipient provinces GDPP is growing they continue to be just as relient on equalization as ever? To me it suggests a lack of ability to reduce dependance on the payments...?

[crazy_eoj]

I'm only going to respond to couple of points I disagree with you about, much of what you wrote I think is correct as well.

Originally Posted by Makarov

(2) Inconvenient Fact #2: Public services are often more generous in havenot provinces;

In support of this "inconvenient fact", the article relies on the following evidence:

As has already been pointed out in this thread, this is simply incorrect. The natural resource rich provinces of Newfoundland, Alberta, Saskatchewan, ec. all spend more on social programs than the other provinces. Cherry-picking particular programs is incomplete, incorrect, and totally misleading.

Spending more doesn't equal better outcomes, ask anyone who has been to a hospital in the past 10 years. Spending has more than doubled, has nyone seen a 100% increase in service or outcomes? The Author of the other study noted that as well and cautied that comparing spending doesn't accurately reflect outcomes either.

It sounds like a plausible argument. Unfortunately, a real estate price survey from Royal LePage has exactly nothing to do with the cost of delivering public services in different provinces. A much more relevant statistic (although surely not the only one) would be average public sector wages in each province. Curiously, those statistics do not support the authors' argument. For example, PEI, Nova Scotia, and New Brunswick (all havenot provinces) have the third, fourth, and fifth highest average public sector wages. BC and Ontario (traditionally have provinces) have the two lowest (Alberta is fourth lowest.) [Source (not the best source but I don't have time to look for anything more authoritative.] Therefore there does not appear to be any correlation between equalization status and the cost of delivering public services.

Average public sector wages has no greater representation of cost of delivering public services than real estate surveys.

We could compare combined tax rates across provinces, assuming that it should cost more to live in jurisdictions where it would cost more to deliver servies. Curiously, and as demonstated in the UofA study (pg 10), there is an inverse relationship to tax rates and equalization payments. The more you tax the more likely you are to recieve (or to need to recieve) equalization. Even more curiously is that the high average public wages and high tax rates seem correlate....

[SeoulFire]

I will preface this by saying that I do not really have the time or energy to debate this - nor do I particularly care about this issue going forward. I am currently in the midst of preparing for a permanent move out of Canada - one which I have been greatly looking forward to since my ill-planned move to Canada 3.5 years ago.

I d, however, find it interesting that you chose a glossy three pager rather than the research behind it.

(1) Inconvenient Fact #1: Canada’s founders didn’t want transfers between governments;

Well, this is an easy one to dismiss because it is totally irrelevant to a discussion of the merits of the equalization program.

It can be viewed as relevant if you include the oft quoted theme of:

The equalization program marks our compassion as a nation. Because of equalization, no citizen of Canada is a second class citizen, regardless of where he lives. The citizens of Cape Race, Newfoundland, of Montmagny, Quebec, of York, P.E.I., of Watrous, Saskatchewan, and of Vancouver, B.C. are all entitled to roughly the same level of services in government. That is the essence ofCanada. That is why this country remains united.

the equalization program as we know it embodies some of the great ideals and the great values of Canadians. I cannot think of a much greater ideal under our democracy than sharing one’s wealth, sharing one’s resources. It is an ideal and a value that all of us cherish. It recognizes that there are those provinces and those people who have it a little better than others.

I may be off here but I think that it was introduced in 1982 that it was a principal or guiding factor (above taken from http://www.fraserinstitute.org/publi...s=equalization )

If you write this off as irrelevant then you would also have to write off the assertion that it has been the "great ideals and values of Canadians" - unless it is with an asterisk.

(2) Inconvenient Fact #2: Public services are often more generous in havenot provinces;

In support of this "inconvenient fact", the article relies on the following evidence: (cut)

As has already been pointed out in this thread, this is simply incorrect. The natural resource rich provinces of Newfoundland, Alberta, Saskatchewan, ec. all spend more on social programs than the other provinces. Cherry-picking particular programs is incomplete, incorrect, and totally misleading.

In asserting that it is "simply incorrect" are you outright dismissing the:

more comprehensive studies (Eisen and Milke, 2010) noted how social and government services including the above-noted benefits in Quebec and other “have-not” provinces, are actually often more generous and lavish in such provinces when compared to the “have” provinces such as Alberta and British Columbia

I have not read the study but you feel pretty confident that it is "simply incorrect" without so much as a glance?

(3) Inconvenient Fact #3: Equalization is actually a transfer of wealth from high-cost provinces to low-cost provinces;

(cut)

Curiously, those statistics do not support the authors' argument. For example, PEI, Nova Scotia, and New Brunswick (all havenot provinces) have the third, fourth, and fifth highest average public sector wages. BC and Ontario (traditionally have provinces) have the two lowest (Alberta is fourth lowest.) [Source (not the best source but I don't have time to look for anything more authoritative.] Therefore there does not appear to be any correlation between equalization status and the cost of delivering public services.

The curious part to me is that the authors did not take this (and your) data a step further - there is no incentive to be efficient in the have-not provinces. At a quick glance, the correlation is inverse.

(4) Inconvenient Fact #4: Transfer programs weaken the economies of poorer provinces;

(cut)

I would also note that Fred McMahon, whose studies are cited and relied on in the article, is also one of the two co-authors of the article. It seems a bit disingenuous for Mr. McMahon to simply cite himself but not to provide any of the data or arguments that ultimately underlie his position in this article.

As mentioned before, it is a glossy three pager pulling points from studies. Fully backing up those points would kind of defeat the purpose of the publication.

(5) Inconvenient Fact #5: Equalization is likely not enforceable in court;

This may well be true. However, it is again totally irrelevant to a discussion of the merits of the program itself.

There are a couple of other articles on equalization published by the Fraser Institute that I am curious to look at, but I will have to do so when I have more time (or, if there is one in particular that you (SeoulFire, or anyone else) found persuasive, please recommend it to me and I'll take a look and see if it changes my mind.)

I could argue that the fact that as they may be unconstitutional, illegal, non-enforceable in court etc the merits of the program are irrelevant.

I am interested in the one linked above (The Uneasy Case for Equalization Payments) but have yet to read it. I also don't expect anybody to actually change their mind nor do I expect my mind to be changed. Moreover, as I am making a permanent move out of the country, my opinions on government actions are also quite irrelevant.

[Rerun]

So back to the topic "Trudeau: “Canada isn’t doing well right now because it’s Albertans who control..."

... however interesting the minutia of the federal transfer payment scheme is... not

Do you think JT has damaged himself irreparably here in Alberta and somewhat in the rest of western Canada, or will he be able to recover by the time the next election rolls around in 2015 (assuming he's the leader of the Liberal party... if he isn't this all moo)?

[Stay Golden]

Quebec and especially their politicians firmly believe it is their inherent right that the rest of Canada supports them financially. Meanwhile their demands grow every year and it doesn't matter which party is in power they play the merry go round politics with Quebec.
Quebec should be forced to be the like the rest of Canada once and for all and if not cut them off of transfer payments period. They bleed the rest of Canada like a parasite.

[zamler]

Originally Posted by Rerun

Do you think JT has damaged himself irreparably here in Alberta..

Oh yea, I do. He had a major uphill battle as it is, even if he was genuinely respectful. But his comments laid bare his true inner feelings about Alberta, you don't say those things unless you have a deeply seeded belief in them.

[CaptainCrunch]

Originally Posted by Rerun

So back to the topic "Trudeau: “Canada isn’t doing well right now because it’s Albertans who control..."

... however interesting the minutia of the federal transfer payment scheme is... not

Do you think JT has damaged himself irreparably here in Alberta and somewhat in the rest of western Canada, or will he be able to recover by the time the next election rolls around in 2015 (assuming he's the leader of the Liberal party... if he isn't this all moo)?

He's done here, the scars that his father left are still pretty close to the surface, and his boy basically rubbed salt in them and gave us the don't trust him moment.

Its done harm to him, and combined with the former Liberal Natural Resource Critic's comments have done a lot of harm to the Liberal brand in Alberta especially come the next federal election.

But the Alberta Boogey man is a key arrow in the Liberal Strategy in any federal election, so they'll turn it around to state that they're fighting the misguided red necks in Alberta anyways. They know that its unlikely that they'll never get a beach head in this province so they might as well make us a convenient example that we don't think like the rest of Canada anyways.

[moon]

Originally Posted by Rerun

Do you think JT has damaged himself irreparably here in Alberta and somewhat in the rest of western Canada, or will he be able to recover by the time the next election rolls around in 2015 (assuming he's the leader of the Liberal party... if he isn't this all moo)?

I guess he has damaged himself irreparably in Alberta but really he would have got 0 (maybe 1 in Edmonton) seats before the comments and likely the same number after.

Look at this thread the people that support the Liberal and would vote for him before are making excuses for him and those that won't vote Liberal don't like the comments.

Trudeau didn't have a chance in Alberta before the stupid comments and still doesn't have a chance after, all it did was show what an idiot he is but it seems most Liberal supporters don't care if he is an idiot or not, which explains his shocking popularity even before these comments came out.

[getbak]

The thing I find oddest about his comments is that he made them in 2010, when Canada was doing better than most countries on the planet. By what measure was he claiming that Canada wasn't doing well?

[CaptainCrunch]

Liberal Party standards

[Tiger]

Originally Posted by moon

Trudeau didn't have a chance in Alberta before the stupid comments and still doesn't have a chance after, all it did was show what an idiot he is but it seems most Liberal supporters don't care if he is an idiot or not, which explains his shocking popularity even before these comments came out.

your right that Trudeau doesn't have a chance in the West. His only chance is to win the East. So is he an idiot for making the comments or is it the right thing to do in his situation?

[Rerun]

Originally Posted by Tiger

your right that Trudeau doesn't have a chance in the West. His only chance is to win the East. So is he an idiot for making the comments or is it the right thing to do in his situation?

Why spot the other teams 90 some seats before the game even begins? Doesn't make sense.

Nope, that wasn't the game plan. His game plan was to come out here to show there's a new sheriff in town and he's looking for some new western deputies.

Unfortunately one of his skeletons fell out of the closet while he was schmoozing up us rednecks.

[zamler]

Originally Posted by getbak

The thing I find oddest about his comments is that he made them in 2010, when Canada was doing better than most countries on the planet. By what measure was he claiming that Canada wasn't doing well?

Because the Libs are not in power. Canada doing well to him means the Liberal party doing well.

Originally Posted by Tiger

your right that Trudeau doesn't have a chance in the West. His only chance is to win the East. So is he an idiot for making the comments or is it the right thing to do in his situation?

How is confirming he's a self entitled jerk off the right thing to do?