Legault says no to changes to equalization

Photo: Darren Calabrese The Canadian Press “I think we must keep the current formula,” declared François Legault at the final press conference of the Council of the Federation on Wednesday in Halifax.

Patrice Bergeron – The Canadian Press in Halifax

Posted at 8:49 p.m.

• Canada

The Legault government wants to keep the equalization formula from which Quebec is the biggest beneficiary, but which is contested in particular by Newfoundland and Labrador and British Columbia.

Newfoundland and Labrador considers that the formula is unfair and has therefore decided to go to court, since it considers that the federal government, which implements the equalization program, is turning a deaf ear to its demands.

Quebec should receive more than $14 billion in equalization in 2023-2024, out of total revenues of $150 billion.

< p>At the summer summit of the Council of the Federation which ended Wednesday in Halifax, the provinces made their disagreement clear.

“I think we must keep the current formula”, declared François Legault at the final press conference of this body.

He estimates that at least five provinces out of ten want the status quo and that if the provinces tried to agree on a formula, they would not be able to agree.

In addition to Quebec, Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Manitoba are beneficiaries, while Alberta, British Columbia, Saskatchewan are contributors, as well as Newfoundland and Labrador, for the first time since 2008.

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“The system is clearly broken and the federal government has made the explicit decision not to sit down with the provincial premiers to renegotiate the formula every five years,” denounced British Columbia Premier David Eby, alongside his Newfoundland ally Andrew Furey, in a press conference on the sidelines of the Council of the Federation Wednesday morning.

According to Mr. Eby, it is “unreasonable” for the taxpayers of his province, who are struggling to make ends meet, to send money to the federal government, which redistributes it to Ontario.

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Under the Constitution, equalization ensures that every citizen in the country can benefit from comparable public services, and Ontario does not experience financial difficulties that would prevent it from providing services comparable, argued Mr. Eby. He does not rule out the possibility that his province will also file a legal challenge.

Similarly, for Mr. Furey, it is a “question of fairness”. He protested that a small province like his had to finance much more populous provinces like Quebec and Ontario.

According to him, the calculation should take into account, in particular, the disparity in the costs of providing services in each province.

He is also outraged by the partial exclusion in the calculation of revenues from natural resources decided by the Harper government and which penalizes provinces that derive significant revenues from oil and gas exploitation.

“In my opinion, those who put this formula in place did not imagine that one day a small province like Newfoundland and Labrador would be a net contributor and that large provinces would be beneficiaries,” said Alberta Premier Danielle Smith at a press conference with all her colleagues at the end of the Council of the Federation.

Alberta would have preferred that the provinces agree on a formula under the auspices of the Council rather than going to court, with Ms. Smith saying she fears a possible decision by the Supreme Court.

For its part, Saskatchewan, which has been both a beneficiary and contributor to the program, wants to offer “alternative options” to the current formula.

Premier Scott Moe has acknowledged that it has “loopholes,” and his government intends to intervene in the process undertaken by Newfoundland.