Equalization is returned to a principle-based, formula-driven approach with a solid foundation for the future.
Moving to a 10-province standard is a principled approach that reflects the true nature of Canada’s federation and the real diversity among the provinces.
Although Equalization will never be a simple program, the Panel’s recommendations result in a considerably simpler and more transparent approach and should make the basics of Equalization more easily understood by Canadians.
While the approach is not as certain as the New Framework, particularly for the federal government, the use of moving averages provides greater stability and at the same time accommodates the wishes of the provinces to return to a formula-driven approach.
Taken together, the package of recommendations provides a balanced approach that carefully weighs the pros and cons of different options and combines them into a solid Equalization formula for the future.
Instead of an all-or-nothing approach to the treatment of resource
revenues, the Panel’s recommendations balance the various options and provide a reasonable solution, a workable solution that provides the best outcomes in terms of its overall impact on provinces.
The Panel’s recommendations for a rigorous review and reporting process should result in a more open and transparent Equalization program.
