Thursday, June 08, 2006

Equalization, Schmequalization

Today there's another blurb from Jean Charest about folding resource revenue into the federal-provincial equalization formula, which is Liberal code for "shuffling more money from Alberta taxpayers to Quebec."

Charest's argument is that this money isn't, in fact, coming from Alberta, BC and Ontario, who are the "have" provinces under the existing system, but from the federal government. He bases this assertion on the large surpluses that the feds have been running for the last few years.

Excuse me? All that money is still from Alberta, BC and Ontario. When your province takes more money out of the federal pot than it pays in federal taxes, it might be pleasant to believe that there's a bottomless well of money sitting there in Ottawa waiting for you to draw on it. It probably takes your mind off the fact that all the excess money that came back to your province after the services your own taxes paid for, was covered by some other province's success. And that, therefore, in relative terms, you're a failure.

The mythical "federal taxpayer" makes a fine argument when you're running a have-not province. That doesn't make him any less mythical. A finite amount of money arrives in the federal coffers, and because of the equalization formula, every penny of "surplus" there is actually from a "have" province. Besides which, arguably there is no surplus. Sure, we have a surplus over the fiscal year. But that's not the same as an accumulated surplus. There's still an accumulated debt. Until that's paid off the surplus is just an accounting illusion.

Here's hoping the federal Conservatives aren't so desperate for Quebec votes that they'll take a page from the Red Book and just start buying them.


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