New report on equalization
A new report from the Fraser Institute is taking a closer look at the federal government’s equalization program to determine if it works as intended. Equalization has been a hot button issue in this province as the previous Liberal government launched a court challenge in 2024.
However, that challenge was dropped by the new PC government earlier this year. The court challenge argued for a change in the formula. The report titled ‘is equalization broken?’ found that in 15 of the 44 years from 1981 to 2024, one or more provinces received equalization payments despite other provinces having a lower GDP. This includes a total of $1.4 billion in payments to Newfoundland and Labrador between 2006, 2007 and 2024, despite having a higher GDP per person than non-receiving Ontario and B.C.
The report says the numerous discrepancies demonstrate ongoing structural issues with the equalization formula.
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