Saturday, September 23, 2006

Super Exciting Fiscal Imbalance Talk!

If you're like me, you probably enjoy nothing more than spending your Saturday in hot debate over the fiscal imbalance and equalization payment formulas. So, to help with this, I thought I'd link to a few recent stories:

1) First off, via political mouse, comes this story of a potential equalization plan. The plan calls for three billion a year in transfers with most of it going to (surprise, surprise) Quebec. Here are the nuts and bolts:


As outlined by party sources, the plan, if it gets Cabinet approval, would include two key elements. Firstly, the equalization program that provides federal money to provinces whose ability to generate tax revenue falls below a national average would be enriched by nearly $900-million.

Secondly, those provinces that do not receive equalization money would be included in increased social transfer payments to pay for post-secondary education and training. This funding, likely in the region of $2-billion, would be divided on a per capita basis.

The price for the added largesse from Ottawa would be a new equalization formula, which includes part of a province's resource wealth in the calculation.



2) It sounds like Harper's plan won't please everyone since the Bloc is demanding 12 billion a year in transfer. Yes, that's 12 billion. In other words, Gilles Duceppe feels that it makes sense for Ottawa to go into deficit in order to give money to provinces which are, by and large, in surplus. Uh-huh.

Just to pay for this the Tories would have to, I dunno, add a few points on to the GST or something.


3) Finally, this isn't fiscal imbalance related, but whatever individual used this google search to find my site last week must have some sort of imbalance.

10 Comments:

  • For a party that prides itself of fiscal conservatism, they are pretty ready to make dumb financial decisions.

    Reading equalization formulas is always a fun way to spend a Saturday night ;)

    By Blogger Harrap, at 11:28 PM  

  • Gilles Duceppe feels that it makes sense for Ottawa to go into deficit in order to give money to provinces which are, by and large, in surplus. Uh-huh.

    Good catch.

    I also find it very ironic that a man whose primary political purpose is convincing Quebecers to create an independent country is demanding $12 billion from the very country he wants to separate from. Why aren't more federalists making political hay out of that one?

    By Blogger Dennis (Second Thoughts), at 2:49 AM  

  • I bet someone read your blog for the first time and couldn't remember the address - but remembered Hedy Fry and the Pope and condoms being in a post. Or... they have an imbalance.

    Why aren't more federalists making political hay out of that one?

    I agree. And with the "good catch" part to CG.

    By Blogger Jason Bo Green, at 11:50 AM  

  • I think Harper's potential fiscal imbalance plan is a cop-out. By enriching the equalization program he is just delaying important structural reforms in the Canadian economy that would improve the mobility of labor. It seems to me that Harper's plan is more politically based than smart policy, which is a shame.

    By Blogger Andrew Smith, at 12:08 PM  

  • I actually think Harper's got something in the works regarding mobility of labour and interprovincial trade.

    When's the last time we've seen a government do so much in so little time?

    Unlike Martin, Harper is trying to earn re-election through action, not words. It's just one of the reasons that all this talk of Liberals winning the next election is just talk.

    By Blogger Dennis (Second Thoughts), at 12:26 PM  

  • Cyber Menace:
    Unlike Martin, Harper is trying to earn re-election through action, not words. It's just one of the reasons that all this talk of Liberals winning the next election is just talk.

    I agree, but some of his actions are politically based, and not smart policy. I like a lot of what Harper is doing, but I really don't like this fiscal imbalance "solution."

    By Blogger Andrew Smith, at 12:43 PM  

  • So, Calgrit, do you think that the Tories will call the Bloc's Bluff, or will the Bloc gamble it all and force an election this fall?

    By Blogger Steve Kanter, at 2:08 PM  

  • It seems to me that the Bloc is trying to take a hard line in order to exact the proverbial 'pound of flesh' from the Tories. They know full well the federal government can't cough up $12b but they want to ensure that Quebec gets the lions share of any equalization 'deal' (or sell-out).

    As I said somewhere else, the Bloc really isn't interested in having an election because their goal is not to 'form government' or 'win more seats'. It is to prove that the federal system cannot work to Quebec's advantage or to exact as many concessions as possible from the government.

    With only one other party (the Tories) offering the Bloc anything in the way of fiscal imbalance deals, I highly doubt they'll call an election on it. Then again, fighting an election on the fiscal imbalance isn't a bad idea for the Tories..

    By Blogger SouthernOntarioan, at 2:14 PM  

  • kanter; The Bloc needs an issue. Adscam is dead with the Tories in power so all they really have is the fiscal imbalance. They probably figured Harper would give in the 4 Billion range so they upped the anti just so that they can complain he didn't meet their demands.

    The vote on this would likely be on the next Tory budget and they'll likely have to oppose that. So then it depends on what the Liberals decide to this this spring.

    By Blogger calgarygrit, at 2:21 PM  

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    By Blogger Paul Adams, at 5:21 AM  

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