CANADA'S EQUALIZATION PROGRAM!

Equalization is a Government of Canada program administered in much the same way as Health Care, Dental Care. Although this money transfer program is meant to address financial differences among provinces. It began 1957.

"Parliament and the Government of Canada created the principle of making equalization payments to ensure that Provincial Governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation."

Equalization is financed by the "Have" provinces and provided to the "Have Not" provinces.

“Have” provinces are those able to generate significant revenue, and provide a certain level of expected services to the citizens of their province.

“Have Not” provinces do not have the ability or choose not to use that ability to generate significant revenue to provide that same level of services to their province.

The “Have” provinces pay to the Government of Canada who then pay it out to the “Have Not” provinces.

Although all Canadians are subject to the same federal income tax system and its progressive rate structure, Provinces are free to set their rates of income tax as they choose. The three territorial governments do not receive Equalization.

Equalization payments are unconditional – receiving provinces are free to spend the funds according to their own priorities. Regardless of what they are.

In Quebec’s case below they save a portion in their “Generation Fund”. Which generates a high rate of return.

Although the program when it started had noble intentions, as a way to unite Canadians. The program has underwent changes and as it stands today is unfair an inefficient for the citizens of the richer provinces as well as the province which have been on the receiving end of payments for decades. Since it keep those provinces in a state of dependency and underdevelopment.

Equalization also encourages provinces to maintain large public sectors, keep taxes high and intervene more in their economies which drives out investment and lowers employment and productivity, basically it has become a poverty trap. NO Province should receive these welfare payments for decades. Yet we do have provinces which do that and seem to strive for this outcome yearly.

The General policy of the PPC is that the Equalization Payments Money Transfer Program should be ENDED completely. Or at very least change the formula to make provinces accountable and responsible for their policy decisions.

Transfer payments below are in MILLIONS - so for instance the total payout in 24-25 is 25.3 BILLION $

What Is Equalization?

The Transfer payment amounts for 2025-2026 have already been announced and very little has changed from previous years. The western provinces of BC, AB, SK all supporting all the central and eastern provinces, with not surprisingly he lions share of 13.6 Billion dollars going to Quebec once again.