Recommendation 1 is to reform fiscal stabilization and hold an equalization referendum. Okay, fair enough to debate.
The analysis presented around Recommendation 1, however, is 100% false. It's mistakes like this that undermines the credibility of the panel's work. #ableg
The analysis presented around Recommendation 1, however, is 100% false. It's mistakes like this that undermines the credibility of the panel's work. #ableg
It's not that these numbers are made up. Not at all. You can review them for yourself here: www150.statcan.gc.ca/t1/tbl1/en/tv.…
These represent the gaps between federal revenue from Albertans and spending in the province. It's not specifically about equalization. Not at all.
These represent the gaps between federal revenue from Albertans and spending in the province. It's not specifically about equalization. Not at all.
To learn more, I wrote about how to measure such fiscal transfers, and how to account for them by program, for the Canadian Tax Journal here: trevortombe.com/publication/tr…
TL;DR: Gap due to strong econ. And EQ accounts for as much 'transfer' out of Alberta as the GST. #FunFact
TL;DR: Gap due to strong econ. And EQ accounts for as much 'transfer' out of Alberta as the GST. #FunFact
That graph is probably hard to intuitively digest. Here's two tables to clarify:
1) Per capita amounts by province and by major federal revenue/spending instrument.
1) Per capita amounts by province and by major federal revenue/spending instrument.
Then, 2) here's the *difference* between each provinces revenue/spending amount and the national average. These are the "implicit transfers".
It basically decomposes the gap between aggregate federal revenue and spending, and adjusts for aggregate federal surpluses and deficits nationally.
These imbalances affect provincial economies, so fair to critique and think of reforms. Reasonable people can disagree.
These imbalances affect provincial economies, so fair to critique and think of reforms. Reasonable people can disagree.
(shameless self-citation) The most recent work examining the macro-economic effect of federal fiscal imbalances is by myself and @jenwinter_YYC, and forthcoming in the Canadian Journal of Economics. PDF here: econ.ucalgary.ca/sites/econ.uca…
Worth noting this is a challenge for all federations. And Canada is not a jurisdiction that transfers an unusual amount across boundaries. Less than 2% of GDP (U.S. shifts ~2.5%.) And we're at a low point historically, actually, both in terms of revenue and spending.
And to the extent that the aggregate transfers are a problem that you want to change, the panel didn't recommend anything that would materially affect them ... which is .... interesting 🤔
