Canada Should Fix Equalization and Other Regional Subsidies Now

The fundamental objection to equalization and equalization-type provisions in many federal programs is that they are entirely counterproductive. They do exactly the opposite of what legislators intended for them to do. Equalization and similar provisions fund programming in recipient provinces that is more generous than in those provinces whose citizens are net contributors to them. They also subsidize gross expenditure excesses in recipient provinces. They impair national competitiveness by providing large subsidies to provinces whose productivity is below the national average. We propose that equalization and other regional subsidies be reformed and modernized to correct these problems without impairing national unity. Read the full paper here