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Federalism
This video discusses the system of equalization payments in Canada. It outlines the process through which the equalization formula is determined by the federal government, as well as some of the misconceptions about the program.
Highlighted Segment
• 11:16–13:27: An explanation of the equalization payments in Canada.Suggested In-Class Discussion Questions
- Do you think Canada needs to use an equalization system to maintain a level playing field across the country? Why or why not?
- Would abandoning the equalization system encourage “have not” provinces to work harder to improve their economic situation or cause them to fall further behind the “have” provinces in terms of the services provided?
- The argument behind equalization payments is that it allows a similar level of services to be delivered by provincial governments across Canada. Do you agree with redistributing tax dollars from “have” provinces to fund programs in “have not” provinces?
- Should the system of equalization payments in Canada be terminated? Why or why not?
- Some argue that equalization payments distort market forces and provide artificial incentives for people to live in regions that are not economically viable while others contend that these payments are a source of Canadian nationalism by allowing people to live in areas that are historically and culturally significant. Which argument do you support? Why?
Suggested Assignment Questions
- Divide into teams representing each of the provinces and develop a new system of fiscal federalism and/or equalization payments.
- The chart below outlines equalization payments for 2019. Are there any surprises as to which provinces receive equalization and which ones do not?
|
Province |
Equalization Payment |
|
British Columbia |
$0 |
|
Alberta |
$0 |
|
Saskatchewan |
$0 |
|
Manitoba |
$2,037 |
|
Ontario |
$963 |
|
Quebec |
$11,732 |
|
New Brunswick |
$1,874 |
|
Nova Scotia |
$1,933 |
|
Prince Edward Island |
$419 |
|
Newfoundland and Labrador |
$0 |