Charest says give me more money (no strings attached, please)

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 and the provinces is for Ottawa to devise a new equalization formula to redistribute wealth between rich and poor regions.

Mr. Charest said the federal government has sole responsibility for deciding on a new formula and does not have to wait for the provinces to first arrive at a consensus.

Under the old formula, total equalization payments were going down because poorer provinces were catching up to richer ones. Then-PM Paul Martin in 2004 decided to increase the size of the equalization pie, but also eliminated the formula so that provinces had a clearer sense of how much money they were going to get from the feds.

Now we are looking at a formula again, which I think is correctly viewed as a fairer way to determine equalization.

“Our view is quite simple, very straightforward: Now is the time to fix equalization. It’s their constitutional responsibility.”

Mr. Charest said he remains convinced after discussions with the Prime Minister last Friday that Ottawa is still committed to fixing the fiscal imbalance. He noted that the federal government and the provinces are moving into negotiation mode, but that it is time Ottawa understood that the talks involve sharing federal revenue, not increasing provincial taxes.

“I’m not going to raise taxes,” he said firmly.

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