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The Panel consistently heard concerns about what many saw as an increasingly ad hoc approach to Equalization. People pointed in particular to the introduction of the New Framework and the “side deals” with Newfoundland and Labrador and Nova Scotia. There may be concerns with the details of the formula but the majority of people preferred a return to a formula-driven approach to provide greater stability and credibility for the program. The majority also supported maintaining the current RTS for assessing fiscal capacity rather than moving to macroeconomic indicators like Gross Domestic Product (GDP). Although there was support for simplification, accuracy, and fixing problem areas, most suggested that the basic RTS approach works well and should not be replaced.
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