CBC News Federal Election


Regional Disparity

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 success.

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 36 Link opens in new window), 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.

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