Wall says equalization too rich for hydro provinces

Saskatchewan premier wants half the money diverted to infrastructure.

REGINA — Saskatchewan Premier Brad Wall wants cuts to the federal equalization program, suggesting some of the have-not provinces are getting too much money that could be better spent elsewhere.

“It is a lot of money to go out in a way that seems to be dated and not always efficient, and infrastructure and tax relief might be an option instead,” Wall said.

Wall said he simply wants a dialogue on changing the federally funded, constitutionally guaranteed program, which sees more than $17 billion a year given to poorer provinces.

He touted a specific option in media interviews – taking away half the program’s funding and using it for a combination of infrastructure work and tax cuts.

“Imagine what 8.5 billion to 9 billion more federal dollars could do in terms of national infrastructure,” he said. “Perhaps Canadians would rather see a split between infrastructure investment and permanent, sustainable tax relief to build the economy.”

The equalization program is designed to enable poorer provinces to offer government services at tax levels similar to richer jurisdictions.

It is based on a complex formula that assesses each province’s ability to raise its own money, and brings poorer provinces up to the national average.

Wall, who leads the right-leaning Saskatchewan Party, said he hoped the federal election campaign would be a good time to open debate on a topic that he believes few people in political circles want to discuss.

Manitoba NDP Premier Greg Selinger said the equalization program benefited Saskatchewan until 2008, when the province joined the “have” provinces partly due to rising energy and mining revenues.

“It allowed them to educate their citizens. It allowed them to build hospitals and schools and roads, and other provinces should have the same benefits that Saskatchewan had.”

Selinger also pointed out that Wall has joined other premiers in calling for an increase in other federal transfer payments such as health care funding.

Wall’s comments were not his first on equalization.

He has consistently said the formula used to calculate hydroelectric revenues underestimates the wealth hydro generates for provinces such as Manitoba and Quebec, thus entitling them to higher equalization payments.

He has also taken shots at opponents of the proposed Energy East oil pipeline, and said last month that perhaps the project would get approved quickly in Central Canada if equalization payments flowed through it.

© 2015 The Canadian Press

1 Comment » for Wall says equalization too rich for hydro provinces
  1. Robert Hattin says:

    Premier Wall’s call for the Have Not recipient’s of equalization payments to be directed seems like welfare recipients being told only they only get food stamps as we dont trust them to spend the money the right way. However, he does have a point that there is a basic unfairness about the Trudeau inspired Provincial Equalization, esp to those provinces who have low cost power generation improperly valued. As well, many Have Not provinces, esp QC, havent maintained their infrastructure, yet have out of control day care expenditures, causing them to be Have Not.

    Let’s look beyond Wall’s flip flop on SK’s past receipt of equalization from Ontario over the past few decades now that SK is a ‘have’ province, and revisit the whole scheme in a more balanced, and less flippant way than when Pierre Trudeau wanted to build a Utopian and Just(in) society. The Fraser Institute has some very sound principles to follow and for once and for all, let’s wrangle Quebec’s (and now Ontario’s) ‘forever broke’ position, caused by overspending and big government programs that are perpetually out of control. Those factors have to be considered when helping out a brother (or sister). To support them when they cause their own financial harm is only to give more fuel to an out of control fire.

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