Poilievre PARKS equalization reform — should Western Canada be concerned?

“I don’t anticipate big changes [to equalization]," Poilievre said. Meanwhile, western Canadian provinces are sounding the alarm on its promotion of anti-growth policies in Laurentian Canada.

Conservative Leader Pierre Poilievre does not anticipate any “big changes” to Canada’s equalization program, should he become prime minister.

“We don’t want to cut transfers to people and provinces. We want to cut the bureaucracy in Ottawa. That’s where the waste is found,” he told Radio-Canada's Téléjournal Acadie last week.

That contrasts western Canadian premiers, who have long criticized the program and called for changes.

“I don’t anticipate big changes,” Poilievre said.

Alberta, British Columbia and Saskatchewan have griped about the inherent unfairness of equalization transfers, which they do not receive.

The most recent significant change came after the 2008 financial crisis, when Ontario started qualifying for payments. Since then, there have been only minor technical changes.

Then-finance minister Jason Kenney said equalization would grow annually with the national economic growth rate — regardless of the gap between richer and poorer provinces.

The current formula earmarks $26.2 billion for “have-not” provinces next fiscal year 2025/26 — a new record, and climbing. Québec will receive $13.6 billion, followed by Atlantic Canada, excluding Newfoundland and Labrador, at a combined $7.3 billion, then Manitoba ($4.7 billion), and Ontario ($546 million).

“It’s not OK,” said Premier Eby, who condemned the “special treatment” of Laurentian Canada. He joined a court challenge by Newfoundland and Labrador last year contesting the taxpayer scheme. 

Premiers Danielle Smith and Scott Moe also backed legal action last year, with a majority (61.7%) of Albertans wanting to strike equalization from Canada’s constitution.

“The current equalization system isn’t fair or sustainable,” Smith wrote on social media. “It’s time for a better deal that doesn’t put all the weight on a few provinces.”

Meanwhile, Poilievre has dodged questions as of late, refusing to comment on whether he would extend the current formula or enact changes. 

An omnibus parliamentary motion in 2023 quietly amended the equalization formula until 2029, drawing criticism from western premiers over no consultations.

Poilievre pivoted to blame the hiring of 110,000 public servants by the Trudeau Liberals, which grew from 257,034 in 2015 to 367,772 in 2024.

The Conservative Party directed CBC News to comments the leader made in March. “You’ll have to wait for our platform to get our plans on all of these types of subjects,” Poilievre said at the time.

“I think we all share the goal of enriching all of the provinces by unleashing the free enterprise economy, so that we develop more revenues to fund our programs.”

A current Poilievre shadow minister earlier tabled Bill C-263, the Equalization and Transfers Fairness Act, which tabled removing the cap on the fiscal stabilization program, a measure supporting provinces that experience year-over-year revenue declines “resulting from extraordinary economic downturns.”

Alberta received $248.3 million from the program in fiscal year 2015/16, when the price of oil collapsed.

Since 1987, the feds capped payments at $60 per capita but raised it to $169 in December 2020 after “Alberta led calls to strengthen the program.”

The province would have qualified for nearly $3 billion in fiscal year 2020/21 if no cap existed. It applied for $707 million under the cap that fiscal year, though Ottawa promised $577 million. 

Western premiers remain furious by the money flowing to Laurentian Canada despite facing their own slew of problems surrounding the affordability crisis.

“Our biggest unaddressed demand was that the reforms were not retroactive, which cost Alberta more than $2 billion. Québec and other provinces have supported Alberta’s call for reform of this program,” Justin Brattinga, an Alberta Finance spokesperson, told Rebel News.

The federal government makes annual equalization payments based on the ability of provinces to raise revenues.

Renaud Brossard, the vice president of communications at the Montreal Economic Institute, said the equalization program promotes anti-growth policies in Québec, which keeps consumer electricity prices artificially low and bans oil and gas development.

He notes Premier François Legault has already forgotten his promise to wean off equalization transfers. Financed entirely from federal revenues, “have-not” provinces spend without federal intrusion.

Premier Smith tabled a paper critical of overcompensating provinces that “under-report certain sources of revenue.” It proposed redistributing excess GDP to all provinces on a per capita basis after the fact. 

“The best way to reduce reliance on equalization is to encourage investment and growth across all parts of Canada,” said spokesperson Brattinga. Equalization has cost the province $67 billion since 1957.

Meanwhile, the fiscal gap between “have” and “have-not” provinces has narrowed from 27% in fiscal year 2014/15 to 6% in fiscal year 2018/19. Québec’s power exports are not included in that calculation. 

Premier Smith has lauded the importance of “nation-building” projects like Energy East to bring Canadians together. It faced considerable pushback from Québecers and Ontarians before its untimely cancellation in 2017.

“There appears to be a growing consensus (though still not entirely unanimous) amongst provinces that it is imperative to build more oil and gas pipelines east and west within our own country and further, to remove interprovincial trade barriers and increase Canada’s competitiveness,” said Brattinga.

“It’s time that all provinces and the federal government recognize that better regulations and market access are in the interests of all Canadians.”

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Alex Dhaliwal

Calgary Based Journalist

Alex Dhaliwal is a Political Science graduate from the University of Calgary. He has actively written on relevant Canadian issues with several prominent interviews under his belt.

COMMENTS

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  • Bernhard Jatzeck
    commented 2025-01-28 11:52:01 -0500
    Equalization is the epitome of the mentality behind “why pay for the cow when one can get the milk for free”. There’s gold in them thar moochings.
  • Bruce Atchison
    commented 2025-01-27 17:44:25 -0500
    Have-not provinces need to attract business and develop it. Instead, they mooch money of the have provinces. That’s not fair. Let each province and territory pull their own weight and exit from this socialist scheme to punish success and reward failure.