header image
The world according to David Graham


acva bili chpc columns committee conferences elections environment essays ethi faae foreign foss guelph hansard highways history indu internet leadership legal military money musings newsletter oggo pacp parlchmbr parlcmte politics presentations proc qp radio reform regs rnnr satire secu smem statements tran transit tributes tv unity

Recent entries

  1. Trump will win in 2020 (and keep an eye on 2024)
  2. January 17th, 2020
  3. January 16th, 2020
  4. January 15th, 2020
  5. January 14th, 2020
  6. January 13th, 2020
  7. January 12th, 2020
  8. January 11th, 2020
  9. January 10th, 2020
  10. January 9th, 2020
  11. January 8th, 2020
  12. January 7th, 2020
  13. January 6th, 2020
  14. January 5th, 2020
  15. January 4th, 2020
  16. January 3rd, 2020
  17. January 2nd, 2020
  18. January 1st, 2020
  19. December 31st, 2019
  20. December 30th, 2019
  21. December 29th, 2019
  22. December 28th, 2019
  23. December 27th, 2019
  24. December 26th, 2019
  25. December 24th, 2019
  26. December 6th, 2019
  27. A podcast with Michael Geist on technology and politics
  28. Next steps
  29. On what electoral reform reforms
  30. 2019 Fall campaign newsletter / infolettre campagne d'automne 2019
  31. older entries...

Natural resources, equalization, and the so-called fiscal imbalance

CBC is reporting that an "expert panel" is recommending that 50% of non-renewable natural resources revenues be included in the national equalization program. I don't get why any of it shouldn't be.

The purpose of equalization is to put all provinces on a relatively even fiscal keel. It has a hint of communist idealism at its root: from each (province) according to its ability, to each (province) according to its necessity.

Why, therefore, is natural resource revenue, even if from non-renewable resources, even a question?

Revenue is revenue. It boosts the affected local economies, and as long as it does, it should be included in any formula based on those economies. It makes no sense that just because a province has a temporary financial high (though the oil-based resources are not exactly expected to dry up next spring, so how temporary is it, anyway?) thanks to natural resources that it should be declared superfluous.

How would those same governments react if I told them that this year I made an extra hundred thousand dollars, and next year I expect to, too, but eventually I will retire, and because I won't make that kind of money forever, I should not have to pay taxes on it? My bet is there would be a "notice of reassesment" in my mailbox telling me that I owe tax on that difference within a couple of weeks.

Why should additional provincial revenues be any different? Equalisation seems to, in essence, be income tax for provinces, where provinces get a tax refund based on their income and outgo at the end of the fiscal year.

I believe that there is indeed a fiscal imbalance, but that it is between have and have-not provinces, not between the provinces and the federal government.

Posted at 18:32 on June 05, 2006

This entry has been archived. Comments can no longer be posted.

Canada under attack? | money politics | Oops, the budget passed

(RSS) Website generating code and content © 2001-2020 David Graham <david@davidgraham.ca>, unless otherwise noted. All rights reserved. Comments are © their respective authors.