Saskatchewan premier pitches changes to federal equalization program
Half of equalization calculated and distributed as it is now, half distributed on a per capita basis.
REGINA — Saskatchewan Premier Scott Moe is proposing a major change to a federal policy that transfers money from so-called “have” provinces to less prosperous ones.
Moe says Canada’s equalization program has not benefited Saskatchewan for years despite a steep economic downturn in the province’s resource sector.
At the same time, he notes, provinces such as Quebec have received billions of dollars under the program.
Moe says he has written to Prime Minister Justin Trudeau and the other provincial premiers asking for a change to how the program is calculated to make it fairer.
His proposed “50-50” formula calls for half of equalization to continue to be calculated and distributed as it is now.
The other half would be distributed on a per capita basis.
“Equalization is an incredibly inequitable and flawed program,” Moe said in a release Wednesday.
The province estimates it would receive about $300 million if the system were changed. Moe said under the current formula Saskatchewan would not receive any equalization payments.
The province has been running deficits for years, but hopes to balance its books by 2020.
“I would contend that this proposal is more than reasonable,” Moe said.
Regina-Lewvan MP Erin Weir said he doesn’t believe Moe will get very far with his idea.
“I wish him well in pushing for increased federal transfers to our province, but fear he will not get far in persuading equalization-receiving provinces,” Weir said in a statement.
Saskatchewan Opposition Leader Ryan Meili cautioned Moe to be careful what he wishes for.
“The way the economy is going under the premier, I’m very concerned that we might actually end up being in the have-not circumstance,” Meili said.
Moe said he wants equalization added to the agenda when Canada’s premiers meet in July in New Brunswick.
Saskatchewan estimates its taxpayers contribute about $600 million per year into program through federal taxes. The province itself does not make a direct payment into equalization.
Saskatchewan acknowledges the program is enshrined in the Constitution, but contends its design and formula is completely up to the federal government and changes can be made without the approval of the provinces.
Files from Ryan McKenna