Fiscal imbalance in Canada : a look at the opportunity costs in equalization

Summary: "Ontario, Alberta, and British Columbia taxpayers have faced a long-standing fiscal gap between the federal transfers they receive and the transfers they deserve based on their share of federal revenue. The gap between the winners and losers of equalization has widened considerably since 1963. ... Economists and public policy analysts have identified problems with the equalization program. Findings suggest that the program acts as a drag on growth, bloats the public sector in recipient provinces and harms Canada's productivity. Instead of equalizing fiscal capacities between jurisdictions as intended by the pioneer of equalization theory, public choice economist James Buchanan, it further harms their capacity to raise revenue. We must ask whether the program as it stands is worth the cost to Alberta, Ontario and British Columbia"--