Quebec delivers balanced budget

[Flatlander]

Equalization is working just fine for Quebec. They just delivered the third consecutive balanced budget and even featured tax reduction. Keep working, risking, paying more tax Mr. / Mrs. western farmer.

[Guest]

Yea brad , tell them to kiss your ass .let them raise their taxes . Maybe they can tax their life ins , crop ins , etc

[SASKFARMER3]

Yea they do on the backs of western Canada.

[grassfarmer]

Can anyone show how much and where equalization payments featured in the Quebec budget?

[farmaholic]

Likely a vague mention and well disquised.....

[ajl]

They will show up as federal transfers for health care and other items in the budget so they never even use the word equalization. You add up such transfers and then deduct the portion that Quebec tax payers sent to Ottawa minus the per capita spending by Ottawa on other items, in order to estimate the contribution other taxpayers make to Quebec. The average person in Quebec has no idea how much the place is subsidized from beyond its borders.

[mcfarms]

[URL="https://www.fin.gc.ca/fedprov/mtp-eng.asp"]https://www.fin.gc.ca/fedprov/mtp-eng.asp[/URL]

here is the transfer numbers they are always line items in a provincial budget.


Quebec gets double per capita than the three western most provinces but less than the three most eastern .
I feel a fair assessment of the program is to look at it as a per person formula rather than focusing on the total numbers.
That said don't look at the northern part of the country you may wanna give it all to Russia.

[chuckChuck]

[URL="https://www.fin.gc.ca/fedprov/mtp-eng.asp"]https://www.fin.gc.ca/fedprov/mtp-eng.asp[/URL]

here is the transfer numbers they are always line items in a provincial budget.


Quebec gets double per capita than the three western most provinces but less than the three most eastern .
I feel a fair assessment of the program is to look at it as a per person formula rather than focusing on the total numbers.
That said don't look at the northern part of the country you may wanna give it all to Russia.

Mcfarms. I am glad you posted that link as per capita transfers paint a clearer picture. Since it is a federal program and funded by federal tax revenues, higher income taxpayers all across the country including Ontario and Quebec pay more into the program. Alberta has higher incomes than Quebec because of the resource industries so they don't get equalization transfers but they still get a lot of health and welfare transfers from the federal government.

The northern territories and 3 maritime provinces are the biggest beneficiaries on a per capita basis. Politicians and individuals who love to use east vs west wedge, like to stir up resentment with equalization transfers. But it is a federal program. Without it we would have a very divided country with a lot of provincial disparity in programs and services. Have provinces are have provinces because they are richer provinces with higher incomes and per capita GDP.


From Wikipedia: Calculating payments

Equalization payments are based on a formula that calculates the difference between the per capita revenue yield that a particular province would obtain using average tax rates and the national average per capita revenue yield at average tax rates. The current formula considers five major revenue sources (see below). The objective of the program is to ensure that all provinces have access to per capita revenues equal to the potential average of all ten provinces. The formula is based solely on revenues and does not consider the cost of providing services or the expenditure need of the provinces.

Equalization payments happen via the federal treasury. As an example, a wealthy citizen in New Brunswick, a so-called "have not" province, pays more into equalization than a poorer citizen in Alberta, a so-called "have" province. However, because of Alberta's greater wealth, the citizens of Alberta as a whole are net contributors to Equalization, while the citizens of New Brunswick are net receivers of Equalization payments.

Equalization payments are one example of what are often collectively referred to in Canada as "transfer payments", a term used in other jurisdictions to refer to cash payments to individuals (see Canadian transfer payments). The money the provinces receive through equalization can be spent in any way the provincial government desires. The payments help guarantee "reasonably comparable levels" of health care, education, and welfare in all the provinces. The definition of "reasonably comparable levels", however, has been the subject of considerable debate.

In 2009-2010, the total amount of the program was roughly 16.1 billion Canadian dollars.

[Oliver88]

Equalization is working just fine for Quebec. They just delivered the third consecutive balanced budget and even featured tax reduction. Keep working, risking, paying more tax Mr. / Mrs. western farmer.

This would be a good program to end for Saskatchewan, Alberta and BC.

Why has Quebec collected EVERY year? (Correct me if they haven't)

No point to reward non-resource based economies while not factoring in Quebec and Manitoba exporting hydroelectric power.

[chuckChuck]

This would be a good program to end for Saskatchewan, Alberta and BC.

Why has Quebec collected EVERY year? (Correct me if they haven't)

No point to reward non-resource based economies while not factoring in Quebec and Manitoba exporting hydroelectric power.

But even with Federal transfers to Quebec their per capita income and gdp are still lower than Alberta. So the majority of benefits of the resource sector still stay in Alberta.

Alberta and Saskatchewan were blessed with lots of natural resources. They aren't successful because they work harder or longer or are true blue Albertans. They are successful because they are sitting on a shit load of oil, potash etc.

If you want a happy family farm to do you give one farming kid 3 sections and the other farming kid 1 section and expect them to get along?

[SASKFARMER3]

No chuck Quebec has stuff to. It's easy to pull money out of the rest of canada for them.
But they know a good thing and they are sucking it dry.

[danny W1M]

Quebeck gets $10billion of the $17 billion in the pot.

I understand that somehow Hydro electric power isn't included in the formula for calculating transfers between provinces, so really their biggest resource income isn't shared at all, and is used for their own citizens, while other provinces(western) subsidize Quebecks provincial budget with income from western resources.

The timeline for the formula to react to downturns happens so slowly that SK and AB will likely keep the transfers flowing to Quebeck, Ont, and the Maritime for 2-3 more years.

If things don't pick up in the west in 2-3 years, I'm sure the taker provinces will want to change the formula before it turns against them in 4 or 5 years.

[chuckChuck]

Quebeck gets $10billion of the $17 billion in the pot.

I understand that somehow Hydro electric power isn't included in the formula for calculating transfers between provinces, so really their biggest resource income isn't shared at all, and is used for their own citizens, while other provinces(western) subsidize Quebecks provincial budget with income from western resources.

The timeline for the formula to react to downturns happens so slowly that SK and AB will likely keep the transfers flowing to Quebeck, Ont, and the Maritime for 2-3 more years.

If things don't pick up in the west in 2-3 years, I'm sure the taker provinces will want to change the formula before it turns against them in 4 or 5 years.

Saskatchewan's Brad Wall questions equalization formula
Treatment of oil, hydro in Ottawa's revenue-sharing formula with provinces scrutinized

CBC News Posted: Aug 05, 2015 4:12 PM CT Last Updated: Aug 05, 2015 4:12 PM CT
Saskatchewan Premier Brad Wall zeroes in on equalization, Ottawa's revenue-sharing formula with the provinces.

Saskatchewan Premier Brad Wall zeroes in on equalization, Ottawa's revenue-sharing formula with the provinces. (Liam Richards/Canadian Press)

Saskatchewan Premier Brad Wall set off a debate about equalization — the revenue-sharing formula between Ottawa and the provinces — Wednesday.

In a series of media interviews, Wall called for a re-examination. Specifically, he took aim at how hydro-electric power is treated. It's a major source of energy in B.C, Manitoba, Ontario, Quebec and Newfoundland and Labrador.

"Hydro, as a resource, is basically excluded from the formula," Wall told CBC Radio's Blue Sky. "Whereas other sources of energy, especially hydrocarbons, oil and gas are properly very much part of the formula."

Wall's assertion set off a confusing set of rebuttals.
Contradictions from Manitoba premier, Alberta economist

"The actual revenues are already counted," said Manitoba Premier Greg Selinger.

But according to an economist at the University of Alberta, Melville McMillan, it's a little of both.

"I believe to the extent that hydro revenues accrue from sales outside the province, I believe those are included," McMillan said. "But to the extent that [a province] sells hydro to its citizens at a low cost, that subsidy is not included."

Furthermore, McMillan said just 50 per cent of resource revenues such as gas and oil are included in the formula.
Lag time offers stability: Selinger

Meanwhile, Wall also complained about the lag time in recalculating equalization when resource prices drop.

"But yet there will be a lag of three to five years before that works its way through the formula, and that could be modernized in my view," Wall remarked.

McMillan said it's three years, and has a "smoothing" effect.

"If there's been a change in the numbers from the time the initial payment was made, the following year the numbers may be corrected and improved, and there has to be some adjustment in some of the payments," McMillan explained. "With the lag, it modifies those adjustments."

He added that averaging over a period of time reduces the "rapid or unexpected adjustments" from volatile swings in resource revenues.

"Frankly, does it reflect the demands and the needs of the country?"
- Brad Wall, Premier of Saskatchewan

"The lag issue works both ways," Selinger said. "[It] protects you if your revenues go up dramatically or go down dramatically, so it creates stability in the country."

Wall also suggested that half of the $17 billion in equalization be redirected to infrastructure or a combination of infrastructure and tax cuts.

"Frankly, does it reflect the demands and the needs of the country? And I would say that infrastructure's at the top of that list," Wall explained.

"The savings are not necessarily all that great, and the consequences for the have-not provinces are particularly large," was MacMillan's reaction.

"It's a constitutionally protected program that allows all of us to ensure that we can grow our economies, educate our people to participate in the economy, and provide essential services like health care," Selinger said.

[chuckChuck]

For those who have the time and interest the following link delves into the equalization question. It is not as simple as it might seem.
https://www.policyschool.ca/wp-content/uploads/2016/03/feehan-equalization.pdf
CANADA’S EQUALIZATION
FORMULA: PEERING INSIDE THE
BLACK BOX ... AND BEYOND
†
Jim Feehan
SUMMARY
Ontario only started receiving equalization payments, for the first time in its history, in 2009. As soon as Ontario
slipped into that “have-not” status, the federal government imposed a cap on the growth of equalization payouts.
That led to substantial federal savings, but has cost Ontario and other recipients what would have been much larger
payments since then. The federal government’s move to rein in the potential ballooning cost of equalization may have
been understandable, from a cost-control perspective, but it ultimately defied the very purpose of equalization.
The fixed-growth rule imposed by the federal government is just one of several elements within the current
equalization arrangement that should be corrected. The federal government should end that practice and absorb
any resulting increase in cost. However, if that cost is onerous, then it could consider adjustments of its other major
transfers to the provinces – Canada Health Transfer and the Canada Social Transfer – and reduce those per-capita
transfers to provinces that are well ahead of the equalization norm. That would be better than shifting the entire
burden to the those below the norm.
Another flaw in the current equalization arrangement is the inclusion of Crown-owned hydro corporations’
remittances of earnings to their provincial owners in the natural resources category of equalization calculations.
Many of these corporations are not simply energy producers, but are also vertically integrated, with transmission
and retail sales operations, and some have no resources at all, but rely instead on fuel purchased in the marketplace.
Moreover, taxes paid by private energy corporations are not considered part of the natural resource category but
are included in the business income tax category. This means the formula is essentially inconsistent, discriminating
based on the ownership profile. Hydro remittances should be removed from the natural resource revenue category
in the formula that calculates equalization. They should go in the business income tax category, just as do the
earnings of other commercial Crown corporations and taxes paid by private businesses. Going beyond the formula,
it is time to re-consider the practice of exempting commercial Crown corporations from corporate income taxation.
A more fundamental and long-recognized problem is the incentive for provinces receiving equalization payments
to underprice the water-rental rates they charge for hydro production. Lowering water-rental rates has the effect
of reducing provincial hydro revenues, which can entitle those provinces to larger equalization payments, while
benefitting residents with cheaper hydro rates. Looked at empirically, “have-not” provinces do charge lower
average rates for hydro than do “have” provinces, lending credence to the criticism that non-recipient provinces
subsidize cheaper energy for residents of recipient provinces. The increased development of competitive North
American wholesale electricity markets in recent decades has made it more feasible to assess what a fair market
price for water-rental rates could be. Updating the equalization formula to consider not water-rental revenue, but
water-rental fiscal capacity, should be the highest priority of all in reforming Canada’s equalization formula to align
it more closely to the principles behind its creation.
It is also time to include municipal government revenues from user fees in the formula. Those revenues are
significant and it makes little sense to exclude them when municipal property tax revenues are included.
Equalization is not out of control but reform is needed. Action on these fronts should be the priorities. These inside-
the-box issues should be resolved before going beyond and considering the more complex task of extending the
formula to account for provincial governments’ different expenditure needs and costs.
†
This paper is based on a presentation given at the Equalization Grants conference, hosted by The School of
Public Policy, University of Calgary, January 28-29, 2014. I am grateful to Mel McMillan and David Péloquin, as
well as two anonymous referees, for valuable comments. I am solely responsible for any errors.

[sofa.king]

It's time to seperate I never thought I'd say this but I'm tired of getting fuked. Lol.