The Progressive Economics Forum

As everybody who reads this blog knows,  then Finance Minister Paul Martin brought the federal budget back into balance in the mid 1990s by, in significant part,  slashing federal transfers to the provinces and eliminating automatic escalators in the new transfers he created.
That cannot and will not be allowed to ever happen again, says Canada’s [...]

The Equalization changes are probably the most fiscally significant cuts in yesterday’s unstimulating Economic Statement. In 2009-10, the program is projected to pay out $14.2 billion instead of $16 billion. In 2010-11, it will pay $14.5 billion instead of $20 billion. This $5.5 billion difference exceeds the $3.5 billion in total projected savings from spending [...]

The 2008 OECD Survey of Canada incorporates a long and surprisingly critical overview of developments in the energy sector, with a major focus on the tar sands. (Chapter 4). It is, in many respects, far closer to the views of the Pembina Institute and the Parkland Institute in Alberta than to those of the Alberta [...]

The Federation of Canadian Municipalities released a large poll today — the largest of its type on municipal issues.  The poll seems reasonably well done with decent questions and language.  Many of the results are to be expected: strongest support for increased funding for health care, with increased funding for local infrastructure as a solid second [...]

There have been suggestions that the Conservative government’s forthcoming Throne Speech will surrender the federal spending power. Through an op-ed in today’s Globe and Mail, Bob Rae tries to position himself, and presumably the Liberal Party, as defenders of the power. This posturing will help the Conservatives woo Quebec nationalists and help the Liberals appeal [...]

This post was inspired by my wife, a non-economist (thankfully) who asked me the other day for my opinion on the endless equalization debate. My answer was simple: follow the politics.
As every insider knows, the excommunication of Bill Casey, an MP from Nova Scotia, is only the tip of the iceberg of discontent [...]

A year ago, I was concerned that the Harper government, in the name of “fixing” the “fiscal imbalance”, would endorse ideas coming from the Canadian Council of Chief Executives and the CD Howe Institute for a radical decentralization of fiscal federalism. This would have entailed eliminating the non-equalization transfers to the provinces (that fund health [...]

“Canada’s New Government” says that it wants to focus on “the productivity agenda.” But they seem unable to look beyond partisan considerations to make the rather obvious link between investment in skills, and building a more productive economy.
The previous Liberal government had just begun to slowly re-invest in worker training and adult learning after years [...]

Having read the electoral tea leaves, Stephen Harper decides to take the “fiscal imbalance” issue off the table, to be replaced, it would appear with the new “green plan”, an issue unmentioned in the Tory platform, but one that they apparently think will get them better milage than the minefield of federal-provincial relations.
When Harper first [...]

Yesterday’s release of the Fiscal Reference Tables also provides data at the provincial level. I reckon that the latest federal surplus of $13.2 billion might start some new cries of “fiscal imbalance” among the provinces in the lead-up to some federal-provincial negotiations this Fall (apart from a wide-ranging discussion paper released at budget time, we [...]

Sorry Linda McQuaig, but that was the worst title ever for a book. Still, I could not resist using it, so what does that tell you?
Last week, Statistics Canada released a short report, Boom Times: Canada’s crude petroleum industry (summary in the Daily here and full report here). Here is an interesting tidbit from the [...]

The Institute for Research on Public Policy (IRPP) organized a breakfast forum in Ottawa today (September 12), to launch a special issue of Policy Options on the so-called “fiscal imbalance” issue. A moderately decentralist (France St Hillaire) to distinctly pro province/ right of centre (Tom Courchene and Gilles Paquet) panel of economic experts lamented the [...]

All of this equalization talk has Preston Manning worried. While Alberta Premier Ralph Klein would have just told the rest of us to keep our grubby hands off Alberta’s wealth, Manning and his co-author Fred Kerr take 1200 words to explain to us that Alberta is already sharing as much as it can.
Let’s take a [...]

Looking towards the Council of the Federation meetings in St. John’s later this week, John Ibbitson thinks he’s found the magic elixer to solve the alleged “fiscal imbalance”:
This week, the provinces probably will suggest a compromise. The first component of any federal transfer would consist of an equalization fix, based on a report commissioned by [...]

Quebec wants big, new equalization dollars from Ottawa. Why equalization? Because it is not conditional – Charest could use new money for tax cuts or any way he wants. Did I mention a Quebec election is coming up next year?
The Globe reports:
Quebec maintains the key to solving the so-called fiscal imbalance between the federal government [...]

 One of the main arguments that there is a fiscal imbalance between the federal government and provincial governments (a vertical fiscal imbalance) is ongoing federal surpluses in the face of more constrained provincial finances. The latest Financial Management System data from Statistics Canada would seem to reinforce that view:
 In 2005/2006, the consolidated surplus for all [...]

The Globe and Mail's John Ibbitson (subscriber access only) thinks the outlines of a solution to the alleged "fiscal imbalance" has been found through a mix of more equalization plus increased program-related transfers to the provinces:
The O'Brien report [aka the Expert Panel on Equalization and Territorial Formula Financing, appointed by former Finance Minister Ralph Goodale] [...]

Dalhousie's Lars Osberg reflects on his family in relation to the equalization program. This piece was published in the Halifax Mail-Star and Chronicle Herald Op-Ed, April 6, 2005 and merits a reprint here in the context of much bickering among the premiers:
When my parents were growing up in Alberta in the 1930s, it was a [...]

http://thetyee.ca/Views/2006/06/07/AlbertaEffect/
Over the years, Alberta Premier Ralph Klein has rarely missed an opportunity to poke a finger at the equalization program and to re-assert that Canada better keep its hands off Alberta's resource wealth. For King Ralph, it makes for great theatre and even better politics.
Klein recently threatened to pull out of the equalization program if [...]