Government Spending

Why Is Equalization Still Growing? finds that due to a specific rule (created in 2009) within Canada’s equalization program, which transfers federal tax dollars to lower-income provinces, total equalization payments to “have-not” provinces must grow every year, even if the gap between richer and poorer provinces shrinks. As a result, total program costs over the past two years have been $2.1 billion (or 5.7 per cent) larger than they would have been without the rule.