Payments to recipient provinces are increasing even as the gap between richer and poorer provinces shrinks.
The economic gap between provinces has shrunk yet equalization payments have continued to increase.
According to forecasts, overpayments will account for 35 per cent of the program’s cost in 2025/26.
Ottawa raised $280 billion more from Albertans than it spent in Alberta from 2007 to 2019.
Reforms in the 1990s led to a marked decline in welfare dependency and reduced spending on social assistance.
Alberta received just $249 million in payments despite a revenue loss of $7.2 billion.
Currently, equalization payments increase in line with nominal GDP growth.
Albertans will likely vote on equalization in October.
In 2019/20, equalization comprised 21 per cent of provincial government revenue in Prince Edward Island.