A new Postmedia/Leger poll indicates that though two-thirds of Canadians do support equalization, a smaller majority of 54% feels that some provinces take unfair advantage of the program and do not do enough to boost their own economic growth. This opinion was found to be most strongly held in Alberta at 72% and Atlantic Canada at 66%. Just 17% of Canadians felt that some provinces did not take unfair advantage of equalization.
Equalization is a program instituted in 1957 that allows the federal government to reallocate tax revenue in such a way that all provinces can offer a similar level of public services. It helps to address economic disparities amongst the provinces by having those with a stronger capacity to generate tax revenues prop up those that are less capable.
Provinces that contribute equalization payments but do not receive them are referred to as “have provinces”, while those that receive equalization payments and do not contribute are called “have-not provinces”. The Leger poll indicates that 62% of those polled in the have provinces and 78% in the have-not provinces do support the program. It also indicated that of those polled in Alberta, 52% felt that have-not provinces were unappreciative.
In Alberta, a referendum was conducted last month which resulted in 61.7% of Albertans voting in favour of ending equalization. Alberta is the biggest contributor to the program and has not been a beneficiary of equalization payments since the 60s. This only just changed in 2021 when the province received more federal funding than it contributed from tax revenues. This spending was driven by emergency fiscal support that was distributed across the country during the pandemic. It came in the form of wage and rent subsidies, boosted employment insurance payments, increased child benefits, and forgiven loan repayments. It resulted in an estimated $30 billion increase in federal spending for the province.
Alberta Premier Jason Kenney has said that the referendum was symbolic and would not be used to repeal the program but would be used to push for a fairer deal for the province when it came to federal-provincial fiscal arrangements.
PM Justin Trudeau has however said that any constitutional revision would require substantial support from across the country. This would mean an agreement of the federal government and at least seven provinces that should represent at least half of the population. The Leger poll found that 51% of respondents supported the view that the federal government and all provinces should be part of any amendments made to the equalization program.
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