Alberta Fact Check: Equalization isn't equal when richer provinces get the cheques
New research from the Fraser Institute shows Canada's equalization program isn't working as intended.
Canada's equalization program is supposed to help provinces with a lower ability to raise revenue provide comparable public services. But according to new research from the Fraser Institute, the formula increasingly fails even that basic test. In 15 of the last 25 years, at least one province with a higher GDP per person received equalization payments while another province with a lower GDP per person received nothing.
If equalization actually reflected relative prosperity, provinces with lower living standards would consistently qualify before richer ones. Instead, the Fraser Institute found repeated examples where the opposite occurred, pointing to structural flaws in the formula rather than isolated anomalies.
One of the clearest examples in a study conducted by the Fraser Institute came between 2009 and 2018, when Ontario collected $19 billion in equalization payments while British Columbia received none, despite B.C. having a lower GDP per person throughout the entire period.
The study also found cases where provinces with higher GDP per person received larger equalization payments per resident than poorer recipient provinces. Newfoundland and Labrador, for example, received higher per-capita equalization than provinces with lower GDP per person during several years between 2000 and 2007.
For Albertans, the findings reinforce a longstanding complaint: equalization no longer reliably measures economic need. Alberta taxpayers continue to contribute disproportionately to federal revenues, yet the formula can produce outcomes where provinces with stronger economies still qualify for transfers while provinces with weaker living standards do not. Previous Fraser Institute research estimated Alberta's net contribution to federal finances has saved taxpayers in other provinces roughly $1,000 per Canadian annually while contributing hundreds of billions of dollars to Confederation over the past decade.
Equalization was designed to narrow disparities between provinces. According to the Fraser Institute's latest analysis, the program increasingly does the opposite.
Sheila Gunn Reid
Chief Reporter
Sheila Gunn Reid is the Editor-in-Chief, Alberta Bureau Chief, member of the board of directors, and host of The Gunn Show at Rebel News. Sheila also serves as President of the Independent Press Gallery of Canada. A mother of three and longtime conservative activist, Sheila is the author of bestselling books, including her most recent release, Independence Blueprint: What Alberta Can Learn From Quebec.
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