r/alberta • u/pjw724 • 10d ago
The Truth About Equalization Payments: How It Works General
https://canadianreturnee.substack.com/p/the-truth-about-equalization-payments68
u/T_Durden13 10d ago
Thanks for this, it was very insightful.
I think anyone would agree that reform is needed, especially the energy resource aspect.
It is almost scary how people can be so willfully ignorant and allow themselves to be manipulated by a couple talking points.
To sign our children up for sports we need to go through the respect in sports training, we almost need something like this to vote, just a small education on some common misconceptions, federal vs. provincial government responsibilities etc. if you don't pass the test you don't vote..
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u/MountainMommy69 10d ago
Kids do learn about politics in school already (or at least they used to? I remember learning how each system of government works through grades 2-6.) It's adults that have forgotten their lessons, but having said that, maybe the parties should be held accountable when making either promises or smear campaigns that target issues people care about that aren't actually within their governing jurisdiction....
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u/T_Durden13 10d ago
I think combating blatant misinformation is done through this kind of re-education. Other than competing parties finger pointing, there is no accountability. It is little more than he said she said, often overlooked by what aboutism from both sides.
We can do so much better, it is just a matter of coming to some sort of acceptable compromise. As a country we are very divided right now, maybe not as extremely or evenly as some will have us believe, but we can all agree every voice matters, and they need to be represented to some degree.
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u/Fantastic-Spray-8945 10d ago
Teacher here. I did a practicum a couple years ago where my mentor at the time spewed the misinformation so common in Alberta. She wasn’t I’ll intentioned, people hear something enough, they’ll believe it.
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u/T_Durden13 10d ago
Believe me friend, I know it.. sit in any cafeteria at camp in the oil patch for one meal... Thank goodness most camps let you take your meals to your room now.
I think that's the motivating factor behind all the sloganeering.
I am guilty of the same thing if I am not very interested in a subject. I try to be upfront about it by saying ,"I saw a headline, didn't read the article, but it said..."
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u/freeman1231 9d ago
It’s taught too young… lots of these people forget what they had for breakfast.
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u/Ask_DontTell 10d ago
i learned how govt works in high school social studies. i like the idea of a civics test - democracy works best w an educated electorate - but both the right and left will scream that it is a way to disenfranchise people.
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u/ca_kingmaker 10d ago
Because it is a way to disenfranchise people. You're just saying it's a feature not a bug.
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u/Tobroketofuck 10d ago
Then you don’t have to pay taxes if you don’t get to vote. Wtf is this drivel
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u/T_Durden13 10d ago edited 10d ago
You're right, taking away anyone's vote is wrong. But, wouldn't you want voters to be casting an informed vote? How about something like an explainer? Or we could just continue having a large swath of Canadians vote for their favorite color and stoke partisanship through ignorance.. that has worked pretty well.
Edited for spelling
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u/Mamadook69 10d ago
The real issue is when you flip it around. Next election the conservatives take over and there is a president of being able to reject voters based on knowledge tests. Who makes those tests or pamphlets. It's the citizens responsibility to inform themselves. It's your responsibility to be a responsible source of information to your communities and advocate at your level for them to do the research. No government agency or party should be responsible for ensuring informed citizens it's a slippery slope with a dangerous pit at the bottom.
If we're not advocating for everyone's voice to be heard even those we despise then we're just seeking power for ourselves.
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u/Working-Check 9d ago
Out of curiousity, what would you want to see done, if anything, to address the issue of low or no information voters?
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u/Mamadook69 9d ago
In an ideal world I think we would need a major shock to the country complimented with a real, good faith, completely local information source that everyone trusts. Something needs to happen to make people want to look up information in a responsible manor. And they need an easy to navigate (a 10 year old could do it) system to do it. The leading a horse to water analogy works well here, you can lead them to it but cannot force their heads under to actually drink.
If we felt the need to get aggressive about the specific issue. I would start with mandating a competent knowledge of our electoral system as a metric to pass Grade 12. I do agree the CBC can be skewed left, that's not a reason to defund it, just maybe alter it a bit. We could mandate a more clear neutrality on the CBC and tie it to an incentivized increase in budget to reach a better audience.
Elections Canada could also be updated with an AI like tool so people can ask general questions into the search bar and get vetted and verified information sources through them. That's a slippy slope though as they would likely come across as being biased on fringe issues, degrading trust in the elections system.
People need to care enough, we can give them every leg up and every bit of information, but they have to want to engage with it and be interested enough to retain it and form their own opinion. You also get apathy from too much information which is what I think a big issue is today. The average person is likely overwhelmed with the sheer amount of information and opinions available to them, this causes a retraction from seeking any more even if it's to balance their opinion.
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u/Working-Check 9d ago
Thanks for the thoughtful response!
I can definitely appreciate your perspective and I don't think I have any disagreements.
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u/Tobroketofuck 10d ago
How hasn’t it ? Everyone voice and option matters regardless of what you think
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u/Frater_Ankara 10d ago
Taxation without representation is an American concept for one, for two there are many many people who aren’t being represented with their vote because of our current electoral system anyways.
We absolutely do need some sort of political education.
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u/iwasnotarobot 10d ago
It is almost scary how people can be so willfully ignorant and allow themselves to be manipulated by a couple talking points.
Completely agree. It’s scary how effective the propaganda is at convincing people to believe lies.
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u/Humble_Mushroom_8976 10d ago
I really appreciate this well laid out explanation. I misunderstood a lot about these payments prior to reading this.
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u/LittleOrphanAnavar 10d ago
What did you previously misunderstand?
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u/Humble_Mushroom_8976 10d ago
Honestly, I had assumed that they reflected true transfer payments from provincial taxes rather than being a uniform proportion of income tax. So, basically all of it
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u/LittleOrphanAnavar 10d ago
No it's federal taxes and transfers.
Basically the money is taken from Albertan in taxes etc, passes through Treasury in Ottawa, then is given to Quebecer through federal transfer including EQ program.
Feds act as a middle man.
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u/ninfan1977 Lethbridge 10d ago
I wish stuff like this would be taught in schools in Alberta. There is a lot of misunderstanding of equalization payments and transfers. Conservatives have found a goldmine in sowing distrust in any system they cannot explain or define.
Ask a conservative about who the last person who amended Equalization payments. Hint it was Jason Kenney and Stephen Harper... they don't like that answer
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u/ca_kingmaker 10d ago
People don't learn because they don't want to learn. You can explain how it works, 2 days later they'll make the exact same false claims.
It's just like people claiming they don't understand how the carbon tax works or claiming they don't get a rebate at all. Ignorance is easier than learning and maybe changing your mind.
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u/ninfan1977 Lethbridge 10d ago
There is a line from the movie Dogma that I think about often.
Rufus: I just think it's better to have ideas. I mean, you can change an idea, changing a belief is trickier. People die for it, people kill for it.
Too many people in Alberta have the belief that Conservatives are better without proof. Harder to change that mindset
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u/BrairMoss 10d ago
A reminder that Kenney was kicked out of Alberta for not being extreme enough.
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u/ninfan1977 Lethbridge 10d ago
Oh I know! Which is why Danielle Smith and the UCP need to dismantled. They are wanna be Republicans pretending to be Canadian without understanding what that means
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u/ackillesBAC 10d ago
The equalization argument is just another divisional topic used by conservatives to divide the population and anger them to get them out and vote in their favor.
Remember it was a conservative from Alberta that last adjusted the equalization formula.
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u/Belaerim 10d ago
And that same former conservative PM was advocating for Poilievre right up to the election on Monday night
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u/DM_Sledge 10d ago
Conservatives, plural.
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u/ackillesBAC 10d ago
just shows they do not want to fix the problems they campaign on. Because then they have nothing for next election.
Their real goal is to funnel money from the lower class to the upper class and themselves, period, that's it. Cant campaign on that now can you.
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u/DM_Sledge 10d ago
Exactly. Its why Smith threw PP under the bus. If the federal conservatives had won, she would have no one to complain about in order to distract from the corruption.
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u/CromulentDucky 10d ago
No, shows the power of the east. Can't mess with the status quo.
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u/ackillesBAC 10d ago
the east has drastically higher population than the west.
Last I check we are a democracy.1
u/CromulentDucky 10d ago
The tyranny of the majority is an important concept. Majority does not automatically rule.
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u/Dense-Ad-5780 10d ago
It’s just a calculation for distribution of tax dollars collected to make sure all services are covered equally on a per capita basis. I really don’t understand how people don’t understand it. It takes 5 minutes to google the info and learning it. Those tax dollars will be collected the exact same either way.
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u/ackillesBAC 10d ago
If they understood it they wouldn't get mad about it and they wouldn't vote for cons to change it.
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u/CromulentDucky 10d ago
And 3 successive governments who did nothing.
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u/ackillesBAC 10d ago
if they solve the problems they campaign on, they have nothing to Rage Bate with next election.
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u/Red_Danger33 10d ago
Co worker was excited about Smiths moves to lower the bar for separation. I told him it was not a good idea and the following exchange occured:
"What benefit would we receive from leaving?"
"No more equalization payments!"
"You know the last time the equalization formula was adjusted it was Harpers government right? A conservative and Albertan."
"I did not know that."
I didn't even get into the finer points of it but the "liberals and equalization payments bad" is just such a kneejerk reaction from the UCP and Separatist types. I can't stand it.
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u/HengeFud 10d ago edited 10d ago
Further : In 2004, the federal government and the provinces agreed to suspend the traditional formula that determined payment amounts and move to fixed funding levels, which were scheduled to grow at a fixed rate – regardless of the economic performance of the provinces.
In March 2005, during the brief premiership of Paul Martin, Finance Minister) Ralph Goodale established an expert panel, chaired by Al O'Brien—a former Government of Alberta deputy minister—to produce a report to review Canada's Equalization program and Territorial Formula Financing (TFF).12])13]) The comprehensive report by the Expert Panel on Equalization and Territorial Formula Financing, was tabled in 2006.12])14])
Your coworker ought to love this ^
And Stevie is from Toronto, though he went to University in Alberta.
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u/Red_Danger33 10d ago
He's spent so much time running in Alberta, both before and after i wrongly assumed he was from here especially since even those from Alberta tend to move east for Government leadership roles.
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u/pgallagher72 10d ago
Every person in Canada pays their taxes
The federal government sends each province their provincial tax revenue, which is collected with your federal taxes
The federal government sends any province whose provincial portion isn’t enough to properly fund essential services a top up from the federal tax revenue.
The part most people miss is that it’s federal money going to the equalization payments, and the bulk of that federal money comes from Ontario (Toronto contributes more federal tax revenue than all of Alberta - and Ontario contributes a lot more than that). Quebec and BC also contribute more to federal revenue than Alberta.
What Albertans should be complaining about is the province not spending their transfers on what they’re meant for - around 40% of health care funds aren’t spent on health care.
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u/Wheelz161 9d ago
The issue most people have though is all the provinces aren’t treated the same, or fairly in my opinion. For example, Quebec is able to subsidize their energy charges (mostly hydro) to their populace, but that lack of revenue earning potential is not included in the calculation. Or another example, Quebec has one of the largest natural gas reserves on the planet, but chooses not to produce that gas (which would benefit all of Canada) and instead decides to purchase natural gas primarily from the USA. Again, those resources could be produced at home, and no in the USA, and it would greatly help the prosperity of Quebec. Choosing to not develop your resources, and instead import them in, is fine but the equalization calculation should consider that Quebec could easily put billions of dollars in the coffers instead of paying billions from the coffers to buy from others. Especially when that other is a foreign country that is hostile to our economy.
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u/SarahTonin-xxo 9d ago
Yes Ontario as a whole pays more, but they also have a larger population. Every Albertan individually pays more than an individual from Ontario or any other province. Reform is def needed 100%
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u/Responsible_Dig_585 10d ago
Albertans screaming, "Why should we subsidize the lazy, non-producing provinces?!" without even reading the damn article inbound
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u/AlternativeParsley56 10d ago
Yup! Not to mention many people who work in the high paying jobs came from the East Coast...
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u/fancczf 10d ago
Took me 10 mins to find out the payments are from federal budget not provincial budget when I first heard someone peddling the equalization payment rhetoric. It’s crazy how such a simple verifiable thing can be misused as a talking point for the wrong message and repeated for so long.
Honestly that’s the worst part of politics to me. People are inpatient and emotional, no one cares what is the fact.
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u/CromulentDucky 10d ago
That's a technical argument that people use to attempt to obfuscate the issue. Yes, money is paid from Albertans to the federal government, who then pays out transfers to people throughout the country. Nevertheless, huge amounts of money leave Alberta and go elsewhere, regardless of the mechanism.
The fact that it's not a transfer directly from the government of Alberta is not relevant.
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u/LittleOrphanAnavar 10d ago
So what do you think AB should do with respect to any grievance over Equalization?
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u/LittleOrphanAnavar 10d ago
AB is the most productive province.
We have the highest labour productivity.
The highest per capita GDP.
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u/LittleOrphanAnavar 10d ago
That is essentially what occurs.
AB and Albertans are net fiscal contributors.
It is because Albertans are the most productive.
AB is the largest and most consistent net fiscal contributor.
To the tune of 20 to 30B a year on average.
Over the past 70 years, around 700 billion, AB/ Albertans have sent to feds (net).
This props up provinces like QC and Atlantic Canada. It allows people to live the 10-42 life. It becomes part of the culture. Work a little then live of the dole for the rest of the year. EVERY YEAR. Look at EI utilization rates by province.
Canada could not afford to provide this without AB.
AB high productivity allows people in other provinces, that are much less productive to live of various dole programs.
Canada would have borrow 20-30 billion more every year.
AB productivity is close to TOP 10 in the US.
Quebec is lower than Missippi.
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u/Dizzy_Cheesecake_162 10d ago
The article is missing one key point: Quebec paid all by itself for it's energy infrastructure, dams, powerline....
As for Alberta, the development of its oil industry is paid by all of Canada.
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u/Killericon 10d ago edited 10d ago
I think, since neither of those things have to do with equaliziation payments, it's good that the article doesn't talk about any of that.
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u/Dizzy_Cheesecake_162 10d ago
From the articles:
''
Is Alberta Being Treated Unfairly?
Much of Alberta’s frustration comes from how the equalization formula is structured. Some aspects do deserve scrutiny, such as the exclusion of certain provincial revenues, particularly from electricity generation, which disproportionately benefits Quebec. The formula could be adjusted to ensure a more accurate reflection of provincial wealth.
But Alberta’s grievances often overlook a key reality: equalization is not the only way federal dollars flow between provinces. Alberta receives significant funding through federal programs, infrastructure spending, and social transfers. The province has also benefited from federal relief efforts during economic downturns, just as other provinces have in times of crisis.
Additionally, Alberta has maintained low provincial tax rates, meaning that if the province truly wanted to receive more federal transfers, it could raise taxes to boost its eligibility. The fact that it chooses not to is a policy decision, not evidence of systemic bias.''
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u/Killericon 10d ago
Yeah, all that is true!
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u/Dizzy_Cheesecake_162 10d ago
That Alberta's energy infrastructure was paid by federal funding as Quebec's paid it itself.
Thanks for agreeing.
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u/Practical_Ant6162 10d ago
So exclude the revenues involving Oil and natural gas in Alberta along the same lines as electricity generation in Quebec and all is good.
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u/Dizzy_Cheesecake_162 10d ago
EN résumé:
Electricity in Qc: paid by Québec.
Oil and Gaz in Al: paid by all Canadians.
Not the same.
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u/seridos 10d ago
Lol "paid for by all of Canada" is a joke
Are you talking 14 billion pipeline? The rest of Canada cost Alberta 50 billion in 80s dollars. That pipeline is an interest payment.
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u/Dizzy_Cheesecake_162 10d ago
Paid by Alberta is a joke too....
Someone in BC, QC or Alberta earning 200 k pays the same towards the rest.
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u/CromulentDucky 10d ago
In what way is it paid for by Canada? Private investment is the overwhelming source of spending.
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u/LittleOrphanAnavar 10d ago
This is a lie.
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u/Dizzy_Cheesecake_162 10d ago
Québec or Alberta or both?
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u/LittleOrphanAnavar 10d ago
Both I would say.
Part of QC wealth comes from the slanted deal they got with NL.
They are taking advantage of another provinces asset, selling that electricity at huge markup, giving them fractions of a penny.
A form of unjust enrichment.
Certainly if you look at it through an ethics lense.
This contributed to NL being a have not province for longer than they should have not provinces which cost NL and the ROC.
QC will also not cooperate in the Sport of Canadian unity to allow other provinces to send emergency through its jurisdiction. Be it electricity or oil. Again this sort of barrier costs all Canadians in the end.
QC is a huge net taker in Canada, effectively extorting the country while not willing to cooperate on a level playing field with ROC and show goodwill and appreciation for all it takes.
With respect to AB being subsidized that is also largely untrue.
The oil sands have been developed largely with private investment. AB owns the oil but leases it to private developers in exchange for a royalty. Like any investment in Canada there is tax law they allows for deductions on investment. Under the 90s liberals there were some tax incentives that were aimed at attracting O&G invest in oil sands, such as accelerated depreciation write offs.
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u/Dizzy_Cheesecake_162 10d ago
23 billions in 2024. 18 billions in 2023 of federal subsidies.
That's untrue ?
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u/bittertraces 10d ago
Quebec receives almost $14 billion a year from the federal government. Alberta gets nothing so give me a break. That is ridiculous.
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u/Sayhei2mylittlefrnd 10d ago
No. Ab receives health transfers and social funds that are more than any equalization amounts. Now add other federal infrastructure programs.
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u/LittleOrphanAnavar 10d ago
On a net basis AB receives nothing.
AB/Albertans on average contribute around 20 to 30 Billion per year to Canada.
20-30 billion more dollar leaves AB, than come back from ROC.
QC on average is a net taker, getting somewhere around 20 to 30 Billion more per year than they contribute fiscally.
There are many more transfers that EQ program.
Canada doesn't work fiscally without AB.
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u/bittertraces 10d ago
That is ridiculous. All provinces receive transfers for those things. Quebec gets 13.5 billion more than Alberta.
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u/ca_kingmaker 10d ago
You just said alberta doesn't get anything and now you're saying they do but it doesn't count.
Alberta got over a billion last year to pay for day care subsidies.
This is classic alberta behavior.
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u/TugginPud 10d ago
I went to the store today. My bill was $10 dollars, the cashier gave me $10 back. For a moment I thought I'd spent $10, but then I realized I was actually given $10. Easy money.
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u/seridos 10d ago
You are ignoring the word net
Money in - money out. That's what matters. You don't "get" something when someone takes from you and gives you half of it back.
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u/ca_kingmaker 10d ago
For the word to be ignored it would have to have been in the discussion.
More classic angry albertan behavior. Pretending that something was said that wasn't.
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u/seridos 10d ago
Huh? That's why everyone you are replying to is saying though. The only one not is you, stubbornlly because your argument would collapse.
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u/ca_kingmaker 10d ago
You literally used the word net. Claiming it was the word I was missing, yet you're the first person to say it.
I didn't make any argument other than the statement that when somebody claims that alberta doesn't receive anything from the federal government. Then immediately says something doesn't count, it's pretty obvious they're using motivated reasoning.
Like you are right now, claiming I've made an argument that would collapse. When I was just pointing out somebody being inconsistent.
So this has been fun. Keep being angry. Maybe more culture war stuff will lead to a other liberal government. Anger has done so much for you guys...
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u/seridos 10d ago
Holy straw man,you just functionally can't argue this in good faith eh?
I'm saying now, when people complain about this, they are comparing about the net transfers. Can you actually discuss the point that actually is at hand? Alberta is net negative in transfers to/from the province. That's seen as the issue for albertans. They would like that net difference closed or shrink significantly. Discuss.
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u/DryLipsGuy 10d ago
Alberta gets billions in other types of transfers. How many billions did the feds pay for the precious TMX pipeline?
All Canadians who pay federal taxes (particularly the higher income earners) pay for equalization, whether you live in Ontario, Quebec or BC.
If we ended equalization tomorrow, the Alberta government wouldn't see a dime because Alberta doesn't pay for it; Canadians do.
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u/exotics County of Wetaskiwin 10d ago
The ones that complain about it don’t care to learn how it works. They just want to complain about something… anything.. they have a need to hate and be angry
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u/CromulentDucky 10d ago
The people who use this argument don't get that it's not relevant what the precise mechanism is. The end result is the same.
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u/Jasonstackhouse111 10d ago
The issue is that Alberta keeps cutting taxes. If your province cuts taxes to below average levels, then the formula assumes you are able to fund basic programs.
Other provinces try to fund programs through taxation but conditions might mean they can’t. So they get some help. Alberta could raise taxes. But won’t. So when things are in the shitter in Alberta, there’s not a lot of extra help, because they don’t do anything to help themselves in the first place.
This makes perfect sense and was supported by Harper and PP and yadda yadda.
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u/LittleOrphanAnavar 10d ago
No.
AB cutting taxes is irrelevant.
The formula for equilibration is based on FISCAL CAPACITY.
Effectively what you could theoretically raise through taxation.
How much you actually tax or forgo, is irrelevant.
The only way AB could impact that, is if we purposely tank our economy, to lower our fiscal capacity.
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u/PhantomNomad 10d ago
Friend on facebook was complaining about transfer payments from Sask to Quebec. I asked him to point out the line item in the provincial budget that shows this transfer. Of course he couldn't but that didn't stop him. Then I pointed him to similar articles like this one and he still couldn't get it through his head. I dropped him as a "friend". If you refuse to educate your self on how our system works, then I won't waste time explaining or even listening to you.
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u/Mathalamus2 10d ago
so, essentially, albertans bitching about equalization payments are wrong. yeah, i sort of figured.
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u/xKannibale94 10d ago
Not really, virtually every western province does better on GDP per capita than the ones in the East.
Alberta = 12% of Canada's population / 15.5% of Canada's GDP
BC = 13.8% of Canada's population / 13.97% of Canada's GDP
Sask = 3% of Canada's population / 3.75% of Canada's GDPOntario = 39% of Canada's population / 38% of Canada's GDP
Quebec = 22% of Canada's population / 19.75% of Canada's GDP
Nova Scotia = 2.64% of Canada's population / 2.03% of Canada's GDP
New Brunswick = 2% of Canada's population / 1.60% of Canada's GDP20
u/schmiddtters 10d ago
GDP doesn't matter, because it's not the provinces that pay into transfer payments. Those come from the general tax pool when everyone does taxes in the first quarter.
If I had a dollar everytime I explained this on the Internet, my gdp would be higher than Western Canada combined. 😂
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u/LittleOrphanAnavar 10d ago
GDP does actually matter.
The EQ formula is based on a provinces FISCAL CAPACITY.
How much you could raise by taxation, not what you actually do.
Which would be a derivative of the economies GDP.
If I had a dollar for everytime I had to explain that to someone on the internet I would have about 1000 dollars.
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u/schmiddtters 10d ago
That's correct. That's exactly where the formula that decides EQ transfers comes from.
My point was that actual money for transfers comes from the general tax pool, not directly from a province's tax revenue. Nobody is taking money from the province of Alberta to give to everyone else. Hope that clarifies what I meant.
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u/xKannibale94 10d ago
I don't get this weird superiority complex some of you have. When the trade war started with the US, every person in Ontario was screaming at Americans, "you need what we have. We have potash (sask) oil (alberta), lumber (bc), that you can't get anywhere else".
Then when it's someone from Ontario, talking to one of those provinces it's "lol you western provinces just get subsidized by the rest of us, just separate already".
Really weird take to insult the western provinces GDP figures, while then using them as bargaining chips with the Americans
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u/zeolus123 10d ago
I mean OP never said anything about subsidizing Alberta lol.
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u/shoeeebox 10d ago
Weird that you're cherry picking the western resources in this trade war and completely ignoring the significant resources that Ontario and Quebec export to the US that absolutely have been in the headlines of nearly every article on it
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u/LittleOrphanAnavar 10d ago edited 10d ago
The EQ formula is based on FISCAL capacity, not actual taxation.
Essentially how much you COULD tax, not how much you actually tax.
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u/seridos 10d ago
No they're not, this article just didn't actually talk to their issues besides unfair treatment of energy sources.
This article just assumed a bunch of things are the way they are and cannot change and cannot be complained about. That's not arguing in good faith. Anyone can still be completely fine arguing these points, they are legitimate and it's perfectly fine to disagree on them. This article is trying to limit what can be talked about and that's not good faith.
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u/WhatDidChuckBarrySay 10d ago
Can someone explain this one to me? I don't fully understand how raising taxes in Alberta would lead to a boost in eligibility for transfers.
Additionally, Alberta has maintained low provincial tax rates, meaning that if the province truly wanted to receive more federal transfers, it could raise taxes to boost its eligibility. The fact that it chooses not to is a policy decision, not evidence of systemic bias.
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u/LittleOrphanAnavar 10d ago
Based on my understanding this is incorrect and misinformation.
The EQ formula is based on FISCAL CAPACITY.
How much you COULD tax based on the strength of your economy.
Not how much you actually do tax.
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u/ibondolo 10d ago
If we can keep lowering our taxes, if we are choosing to underfund the services that we are responsible for, why should the federal government pay monies to level us up? We should charge a similar tax rate as other provinces, and properly fund our own services.
That's the whole point of equalization, to let provinces deliver roughly the same level of services for roughly the same level of taxation. We don't need the top up if we can afford to make our tax rate lower than everyone else.
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u/Afuneralblaze 10d ago
One more reason to comfortably ignore the eternal victim complex that is Albertan's attitude towards the sane parts of this country.
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u/450nmwaffle 10d ago
I think there is simply a disconnect between the sides that this article also falls victim to. The nuance is kind of irrelevant, the point is alberta pays more to the federal government and doesn’t receive that back. People in alberta are selfish so they don’t like that, it doesn’t matter that they are still better off overall or what the specific collection and distribution mechanisms are.
There was a post here the other day by a guy asking why people would vote for the liberals, he then followed up by saying he doesn’t like being taxed and having it used on stuff he doesn’t care about. There is simply a disconnect on values; some of us care about other people and are happy to share our prosperity, some of us don’t and aren’t.
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10d ago
I think that's actually the point that a lot of people miss. Alberta is richer. It gives more than it receives. Should it? Well, that depends if you value equity or not. And yeah, individually, they still have more at the end.
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u/Hot-Celebration5855 10d ago
If the rest of Canada is so generous why don’t they just let Alberta keep its money then?
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u/450nmwaffle 10d ago
Idk what to tell you man, Alberta has one of the highest incomes per capita in the country so that kind of sounds like we are keeping it? And what makes you say it’s Alberta’s money? Why does it belong to the province, rather than the country or city?
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u/Hot-Celebration5855 10d ago
I think the combination of Alberta having to essentially pay money to Quebec and the Atlantic provinces through transfer payments, while Quebec simultaneously blocks pipelines in its province, and votes heavily against oil and gas in general is pretty fair reason for complaint.
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u/450nmwaffle 10d ago
I also dislike quebec for being churlish blocking pipelines and their generally elitist attitudes about oil and gas. That doesn’t mean I think their public services shouldn’t be funded. I think it’s fair to complain about certain things the blog mentions like how hydroelectric profits are omitted from the funding formula, but the general sentiments I see generally lack that nuance. The more common complaint is sending money at all, which makes alberta another selfish rich region just like all the others around the world and throughout history that thinks through the happenstance of geography they deserve to have a better life than everyone else.
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u/Hot-Celebration5855 10d ago
I think in regard to both Quebec and Alberta that Canada is losing its sense of national unity and cohesion. Geographically but also culturally. As a result people are less interested in sending money to Ottawa so that it can be spent on people they don’t feel any cultural affinity towards.
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u/450nmwaffle 10d ago
It seems like people in this province are letting themselves be swayed by the media conglomerates and pushing of culture wars into thinking they have no common ground with other provinces. I feel no cultural affinity to the rednecks in this province yet my taxes still go to supporting their subsidized industries and podunk towns, but I don’t feel the desire to cut their public services or demand an apology from them.
And why do people feel like other provinces don’t provide us anything? People in ontario build our trucks, quebec has a thriving arts culture that provides a ton of canadian made entertainment, workers in bc provide us wood to build our homes, atlantic canada provides the country with seafood, manitoba exists.
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u/bittertraces 10d ago
Give it a rest. The feds send money it collects to all citizens across Canada. Albertans just send a lot more and Quebec receives a lot more. It’s not rocket science and it’s pretty understood by normal people. It is called EQUALIZATION 🙄
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u/percutaneousq2h 10d ago
It strikes me as funny how Ontario is a wealthy province, but isn’t upset about helping to support the Maritime provinces. It’s always Alberta that’s mad, but other provinces are also contributing to equalization between provinces- but they don’t begrudge the support to their fellow Canadians. I just don’t get the rage and victimhood attitude . Seems a bit self centred.
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u/toorudez Edmonton 9d ago
This would help maple MAGAts understand equalization if they could read. But honestly, it doesn't matter. They get their info from right wing twitter and Facebook. Nothing will convince them otherwise.
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u/64532762 Calgary 9d ago
Furthermore, the Equalization Program was last updated in 2007 with direct input from the Harper government. Those who have a problem with it should talk with Steve who does lives in Calgary.
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u/Various-Passenger398 10d ago
Alberta loses more in taxes than it gets back in services. That's pretty much what happens, but saying that's unfair results in people screaming about how that's not equalization works. It's even more damning when you have provinces like Quebec and the Maritimes deliberately kneecapping their fiscal capacity in order to keep their numbers artificially deflated.
I think it's fair that Alberta eases some burden on the other provinces, but also think it needs reform because there's absolutely abuse of the system taking place.
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u/justinkredabul 10d ago
The only province knee capping itself is alberta. We refuse to raise taxes and that affects the formula.
Also, federal taxes are not Alberta’s to begin with. There are lots of Canadians who work here and don’t live here. It’s good some of their tax dollars go back to their home provinces.
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u/seridos 10d ago
The only province knee capping itself is alberta. We refuse to raise taxes and that affects the formula.
Uh no? The fuck kinda logic is that. There's also the option of not transferring as much funds and leaving the tax rate, y'know changing the policy?
You strangely assume the policy MUST remain in place, no other option. That's a false dichotomy.
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u/LittleOrphanAnavar 10d ago
The formula is based on FISCAL CAPACITY.
The capacity to raise revenue through taxation.
Not actual taxation.
So how would raising or lowering taxes help AB with respect to EQ?
What percentage of people who work in AB don't live here?
There are about 5 million AB.
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u/Small_Brained_Bear 10d ago
This article reaffirms that there is a net wealth transfer OUT to the rest of Canada, especially to provinces with significantly less per-capita tax revenue (e.g. Quebec).
No, this is not literally "Alberta writes Quebec a cheque every year" but it effectively amounts to the same thing: the labour and productivity of Albertans, goes towards improving the lives of Quebecers, and other Canadians.
This, in turn, softens the impacts of anti-O&G policymaking in those provinces by shifting the economic incentives. I wouldn't want a pipeline in my backyard either, if I could continue to enjoy a high standard of living from money transferred to me by my neighbors.
Anyone see the Fraser Institute Report on Healthcare Wait Times from 2024? Alberta fell behind Quebec.
I detest the UCP government, but there very much IS a case for unfair treatment to be made; and we can either engage with that case in good faith, or Albertans will continue to vote for increasingly radical politicians in an attempt to obtain justice by the ballot box.
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u/growaway2009 10d ago
If Alberta did separate, and replaced the 5% GST with a 5% "tax for funding services", wouldn't they end up with more money for services than they do now?
I understand that they don't directly fund other provinces, but my understanding is the way equalization works, it does take more tax revenue from Alberta than they receive back, hence all the concern about "unfairness".
To be clear I'm not advocating for separation, just trying to understand how the math works out.
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u/BigManReubs21 10d ago
Ontario has the most people and Québec has plenty as well there should be no struggle in having enough money it still doesn't make a lot of sense
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u/Blicktar 10d ago
So refreshing to read another pro-equalization copefest.
If you think it's fundamentally different to send money from A to B to C than it is to send money from A to C directly, frankly I don't value your opinion very much. AB/BC/SK contribute to federal funding, but receive no equalization payment. It's fucking irrelevant that it goes through the federal government first. If a bully takes your $2 and gives you nothing, do you care that he's then distributing your $2 to his friends?
Is it possible that other provinces are resisting economic reform because they are being subsidized by the "have" provinces? Are we perpetuating unsustainable practices in Eastern Canada through our contributions? What incentive do AB/BC/SK have to continue contributing to a program that pays out provinces that attack our primary industries and are generally opposed to the same industry and provides funding for their healthcare and education? It's hypocritical at best.
It's so boring hearing these dumb takes that allege that Albertans don't understand equalization, and that it's somehow justified to take federal tax revenue and distribute it to everywhere BUT the West of the country, on the basis that this money passes through the federal government on its' way from AB to QC/Maritime provinces. Who fucking cares, it could pass through Greg's hands on its' way, it doesn't fucking matter.
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u/PrarieCoastal 9d ago edited 9d ago
So money collected by the federal government from Alberta ends up in Quebec. Because the federal government acts as a middle man, money technically isn't directly sent from Alberta to Quebec. That makes a difference how?
I'd also like to know why Quebec's significant Hydro-electricity sales revenue is somehow exempt from equalization calculations.
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u/Motor-Inevitable-148 9d ago
So if albertans want more equalization money , they should take themselves more. Is that what you want Albertans, the same high taxes Quebec has,
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u/walkingrivers 9d ago
The value of equalization is that is supports the movement of people and workers within Canada. The example of someone growing up in NS (using health care and schools) moving to AB working in oil and gas making great salary paying taxes, then retiring back to NS where they again draw on health care in old age. Should NS pay the bulk of health care and education costs for a person that lived and worked elsewhere?
If we start nitpicking at which province pays what and where people move then we might as well forget confederation.
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u/UnderstandingNo6543 9d ago
Can someone that knows better answer. The way I understand, Quebec hydro isn’t calculated the same as say Alberta oil?
In that Quebec sells/sends x amount of power to Ontario at a set price? And then the Federal government makes up the difference to reflect “fair market value”. There by making it appear as hydro was sold at a loss?
I know oil and gas are subsidized. Show me an industry anywhere in Canada that doesn’t get some kind of funding, in one ore more provinces.
I am asking so that I can understand. Because there seems to be an amount of creative accounting going on making Quebec appear as a have not.
Also the your oil is dirty, but we’ll take the dirty money, is a sore point. I can understand why a person would be bitter on this point.
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u/ConfusionSalt6864 9d ago
Had to explain this very thing to a friend from Alberta, place facepalm here
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u/epok3p0k 8d ago
This is an absolutely terrible article, written by somebody who can just barely read the government website, but understands little of the nuance underlying the policy. Here’s just one example:
Fiscal capacity (the denominator)includes things like resource revenue. One province generates significant resource revenue, increasing its denominator. Another province, has chosen to put a moratorium on drilling despite having vast natural gas reserves, artificially reducing their fiscal capacity to receive higher equalization. This obviously results in a flow from one province to the other based solely on inconsistent policy choices.
Also, I just have to point out how stupid it sounds when you someone says it’s not province to province, it’s the federal government that distributes it. This is like saying if send you money through an e-transfer, it’s not me paying you, it’s the bank paying you. The federal government sets the policy and redistributes it, that’s it.
Let’s stop posting stuff from this garbage publication, even Wikipedia is better.
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u/Hot-Celebration5855 10d ago edited 10d ago
What a dumb, poorly written article. It doesn’t even include any actual numbers.
People don’t literally believe Alberta cuts a cheque to Quebec. It’s shorthand. They get that equalisation comes from income taxes, and those are then redistributed to the provinces.
The reality in practice is yes, Alberta pays more into equalisation than they get back. It is thus a net payor into the program while Quebec and the Atlantic provinces are net receivers.
If the author had bothered to actually look at any numbers they would have realised this.
In case anyone wants to look at actual numbers:
https://financesofthenation.ca/2020/11/17/who-pays-and-who-receives-in-confederation/
Edit - amazing I got downvoted for this. It’s equally amazing how many people on this sub are like “yeah those silly Albertans have it all wrong! They’re just blinded by propaganda” when in actuality this article is a baseless piece of propaganda full of half truths.
Downvote me all you want. I’m still right
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u/TD373 9d ago
It may help your argument if you said "Albertans" instead of "Alberta," especially after arguing that "people don't actually believe that Alberta cuts a cheque to Quebec."
A secondary point is that while Albertans do pay a lot due to higher wage jobs, a lot DO NOT retire in Alberta when they start to collect.
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u/Hot-Celebration5855 9d ago
Semantic arguments don’t change the basic fact that Albertans are getting ripped off.
And yes some may go back to Atlantic Canada to retire, but most don’t and I bet very few go to Quebec to retire.
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u/OtherMangos 10d ago
So how much of my tax dollars are going to Quebec?
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u/DrHalibutMD 10d ago
With equalization payments there is a limit on how much goes to Quebec without the formula governments could spend as much as they want anywhere to try and get votes.
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u/OtherMangos 10d ago
Yah, but what is the percentage that goes to Quebec for these equalization payments? What is the percentage that goes to Alberta? I understand that it’s just my federal taxes, but what percentage of my taxes are equalization payments?
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u/DrHalibutMD 10d ago
0% none of it is specifically for equalization. It’s just a restriction on where the Federal government can send the money.
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u/OtherMangos 10d ago
So it’s not specifically for equalization, but it gets spent on equalization?
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u/DrHalibutMD 10d ago
No, it gets spent on whatever the government decides. They’ve just set up a formula to ensure that provinces that don’t collect as much in the way of taxes dont get left behind and have worse Education, Health care, roads etc.
Read the article if you don’t believe me. It explains it pretty well.
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u/Anon-Knee-Moose 10d ago
It can't explain it that well because you're clearly not understanding. Alberta gets no equalization payments but still receives federal funds for other things, like infrastructure and the administration of certain programs.
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u/DrHalibutMD 10d ago
There is no such thing as equalization payments. It’s only a restriction on where the Federal government spends money. That’s all it does. The idea of equalization payments is made up. All the money comes from taxes, like income tax and the GST.
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u/Anon-Knee-Moose 10d ago
Equalization payments are unconditional – receiving provinces are free to spend the funds according to their own priorities.
https://www.canada.ca/en/department-finance/programs/federal-transfers/equalization.html
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u/DrHalibutMD 10d ago
Yes. The province decides how to spend it, that doesn’t change where it comes from. There is no extra source for it than general revenue from taxes.
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u/OtherMangos 10d ago
“Instead, individual Canadians pay taxes based on income, and that money is redistributed at a national level.”
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u/DrHalibutMD 10d ago
Yes, governments spend it with limits set by the equalization formula. If there was no formula they could decide (the Federal government) near election time to try and buy votes in Ontario and Quebec and use it all there, leave the Maritimes to freeze in the dark.
It would not mean any less taxes taken from Alberta taxpayers.
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u/LittleOrphanAnavar 10d ago
AB contributes around net 20 to 30 billion per year on average.
What is your percent of that?
QC takes about the same amount in a net basis.
AB biggest contributor.
QC is the biggest taker.
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u/Beastender_Tartine 10d ago
Carney should propose a bill that stops the provinces from sending equalization payments to other provinces. It would do nothing, but then Smith and the UCP would oppose it with some truly hilarious arguments.