May 2006

The Honourable James M. Flaherty, P.C., M.P.
Minister of Finance
House of Commons
Ottawa, Ontario

Dear Minister,

Members of the Expert Panel on Equalization and Territorial Formula Financing have spent the past year reviewing a host of issues related to Canada’s Equalization program, listening to the views of provinces, experts and interested Canadians, and exploring alternative approaches.

We are pleased to provide our Panel’s final report and recommendations.

We would like to thank all those who participated in this important review process. While there are widely divergent views on how specific components of the Equalization program should be addressed, with few exceptions, we heard strong support for the program. Most want to see the Equalization program fixed, not abandoned.

We hope that this report will add to Canadians’ understanding of the purpose of Equalization and the objectives it is intended to achieve. We hope it will provide a strong foundation for open, informed and constructive discussions among the provinces, the federal government and interested Canadians. Most importantly, we hope our recommendations will help put Equalization back on track and secure a solid foundation for one of Canada’s essential cornerstones.

Yours sincerely,

Al O’Brien (Chair) Fellow, Institute of Public Economics, University of Alberta	Fred Gorbet Principal, Strategy Solutions	Robert Lacroix Founding member, Centre for Interuniversity Research and Analysis on Organization (CIRANO)
Elizabeth Parr-Johnston Principal, Parr Johnston Economic and Policy Consultants	Mike Percy Dean, School of Business, University of Alberta

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