When you are thinking of the provinces, Prime Minister, it is important
not to picture teenage siblings squabbling over their role in the family.
That's not it at all. The point is they are all different individuals,
with different needs. In a sense, they are all distinct societies. Canada is home to a great diversity
of economic regions, from the resource-heavy economies of the East, West
and Far North to the commercial and industrial heartland of Central Canada.
Each region must deal with its own unique set of circumstances. Population,
geography and infrastructure play major roles in a region's economic
Inevitably, some areas are wealthier than others.
The equalization program was established to try to level the field. (There
is also a special formula for the territories.) Unfortunately, equalization
is a perennial point of contention. Established in 1957, and enshrined
in the Constitution (see Section
it transfers money to "ensure that provincial governments have sufficient
revenues to provide reasonably comparable levels of public services at
reasonably comparable levels of taxation." In real terms, it takes
money from the rich provinces and gives to the poorer provinces.
But many complain the system is broken. The "have" provinces
(Ontario and Alberta) complain about having to subsidize the "have-nots" (all
other provinces and territories). Some of the "have-nots" complain
that the federal government claws back too much whenever they enjoy a boom
in the economy – especially when energy royalties are high. And
they want a new deal – for Ottawa to give out more money and to
take back some of the responsibility for some social programs.
To top it off, most every province and territory complains about special
funding given to La belle province (except for
Quebec itself, naturally). The auditor general says money directed to Quebec
under the banner of the now-infamous sponsorship
program was skimmed off as commissions by ad agencies and other middlemen
to the tune of $100 million. It's money some provinces say could have been better
used to help fund universities or transit.