Equalization, Ontario, and the politics of division
Equalization is a federal transfer program that is explicitly designed to subsidize provinces with weak own-source revenues and to be politically unifying. However, the flip in Ontario?s status from a ?have? to a ?have-not? province has had, and will continue to have, profound consequences for the country as a whole.
This essay focuses on three results that have evolved since 2008/09, the year before Ontario became a ?have-not? province: First, Ontario?s shift means the majority of Canada?s population now live in equalization-receiving provinces; second, a ?have-not? province (Ontario) has higher average living standards than two ?have? provinces (British Columbia and Newfoundland & Labrador); third, all four remaining ?have? provinces are relatively rich in resources while no other province is.
As part of an on-going equalization research program, this essay highlights the above three results of Ontario?s ?have-not? shift.