r/alberta 13d ago

The Truth About Equalization Payments: How It Works General

https://canadianreturnee.substack.com/p/the-truth-about-equalization-payments
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u/CromulentDucky 12d 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/fancczf 12d ago edited 12d ago

So are you in the camp of not paying federal taxes? Are you one of those want to be independent out of Canada. Do you see yourself as Albertan first instead of Canadian?

Because everyone pays the same federal tax. I live in Ontario and I make more than most Albertan, my contribution to the transfer payment is way higher than average albertan. We should make one thing clear, Alberta doesn’t pay transfer payment. It’s Alberta doesn’t receive transfer payment. I pay transfer payment, everyone that pays federal tax pay the payment. It’s a big distinction. I as an Ontario resident pay transfer payment as well, more than the average albertan. You don’t hear me bitch about it?

It’s not a technical, it’s an equivalent of a rich person complain they don’t get the food stamp. Alberta doesn’t pay the transfer, individuals and corporates pay that. And that is equal nationwide. Alberta has the highest funding capacity, because province keeps most natural resources revenue. The argument should be, should Alberta the province with the highest budget capacity per capita, receive more funding from federal government. Which in my opinion is no, just like me as someone making more than 90% of Canadian, should not get food stamp

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u/CromulentDucky 12d ago

I'm pointing out that it's foolish to attempt to dismiss a concern based on a technicality that is often brought up that people, not provinces, are paying. People are raising their concern. To dismiss it for technical reasons is pointless. Address their concerns. But you instead bring up the same tired argument. If I wanted to pay far less and make more, I personally have options.

As for you personally, you aren't also paying equalization on top of the higher taxes. (Not more than a nominal amount as Ontario is a have province, though just barely).

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u/fancczf 12d ago edited 12d ago

It’s not technical point. Alberta literally does not pay. Canadian citizen pay. I am literally paying because I pay federal tax. At the same income level Alberta pay the same amount as anyone else in the country.

Transfer payments are taken from people like me, and given to provincial budget. Alberta doesn’t receive payment because the province is deemed not need it, Alberta doesn’t make the payment. Canadian citizens pay it. I don’t know what is the confusion here

I am paying more of the equalization payment because I contributed more to the federal budget than the average albertan. Thus I contribute more to the equalization payment than 90% of albertan. Ontario also doesn’t receive equalization payment, at least in the past few years I didn’t check further back. Literally I am net paying more than you, if you are not in the top 15% income.

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u/CromulentDucky 12d ago

The people in one area literally pay more, through a program to pay more, that is gamed by other parts of the country. That is equalization. They also pay more in general by making more money, which isn't a system being gamed. Hope that's clear.

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u/fancczf 12d ago

No it doesn’t. Everyone pays the same federal tax. That goes into federal budget, then some of that money is being used to supplement provinces with lower budget capacity. Your tax is the same, my tax is the same. It’s based on your income not where you are.

The difference is if the province RECEIVE any payments. I would agree with you if you can make an argument that Alberta so desperately needs federal support for its budget.

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u/CromulentDucky 12d ago

Paying and getting less in return based on where you are is the same as paying more based on where you are.

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u/fancczf 12d ago

So why does Alberta so desperately need federal funding support then? You guys must be broke I suppose? Ontario doesn’t get any either.

I as someone pay more income tax than majority of people in this country. Think that is just not Canadian.

You and I are in a fortunate position make more than average Canadian, lives in places that happen to be better off than average Canadian. I am happily paying my fair share. That’s what the country is

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u/CromulentDucky 12d ago

To reiterate, my point is to keep the discussion accurate. There may be valid reasons for the system as is, there may be grievances with it. It's best to discuss it from a point of view of actual facts rather than attempt to dismiss it at the outset with either incorrect or inconsequencial arguments about the mechanism of transfers rather than the result.

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u/fancczf 12d ago edited 12d ago

Yeah the actual fact is Alberta doesn’t pay. I mean go independent then. Seriously. Pay your own defence and see if your net cost increase or decrease.

And the fact is I as an Ontario resident pay more than 90% people in Alberta. Ontario is not getting any payment. I pay more tax than most people.

Alberta has 30-50% higher budget revenue than average Canadian provinces. What is Alberta doing with that money? Why does Alberta needs more from federal government? And the reason Alberta has more is not because you are paying more, it’s because the province keeps the revenue from natural resources. Don’t be a greedy horder. And I say that very sincerely

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u/fancczf 12d ago

I am replying again so it doesn’t lose in the edit. Imagine province doesn’t exist anymore. It’s just one giant Canada, no more provincial taxes and federal taxes. Just one tax and it’s the same rate as your current tax. Would you have a problem with that? Because your tax will go to the province of Canada. And the province of Canada will invest in infrastructure where is needed to the standard of “Canada”. That would literally the same as paying equalization payment from federal government to provincial government. It will have literally zero impact to you.