Billions in subsidies to big business

[AlbertaFarmer5]

Thanks for resurrecting this thread, I see there is still no response from Chuck about how he equalizes his cattle feed situation.

[ag-boy]

dairie farmers have the highest subsidy pay out because supply magement consumers pay!
is cost plus guaranteed profit milk quota is corrupt high price , not possible for young farmer to start
get rid of this supply magement and milk and chicken come down in the store we save all
look at Europa and usa price off milk and chicken half price
this piece of quota paper is not fair at all any more to free enterprice farming out here in canada

[chuckChuck]

Do you have livestock Chuck? This would be like having cattle, most of them are in one pasture(call it the east pasture for no reason at all), they have eaten every blade of grass on that one, meanwhile there is grass everywhere on the west pasture, but not enough cows to harvest it all, and the east cows won't go there because they have always been in the east pasture, it is right by the main highway, and the barn, whereas the west pasture is in the back 40, no civilization, no attention from the viewing public. The cows are quite vocal about their dislike of the working conditions where they are at, and your neighbors are threatening to call the SPCA, and when they lock you up for animal abuse, you will be effectively voted out as the cows supreme leader, even though the cows in the west are fat and happy, no one asked them, or even knows they exist.

So under your equalization scheme, you should harvest the grass in the west pasture, harness some cows/oxen to mow the hay, rake it, stack it haul it etc. Then haul all the fruits of their labors to feed the cows in the east pasture. Of course now, they eastern cows will have even less incentive to move pastures, but at least the neighbors won't report you to SPCA, so you get to keep your job at least for another season. Which is good because you now have cows dependant on your charity, so you will be busy, as will the western cows, harvesting and hauling feed. And since there are more cows in the eastern pasture, than in the west, the risk of a mutiny is much lower, and besides, no one ever drives by and looks into the west pasture to see how hard they are working, and where the fruits of their labors are going, so you won't get reported to the SPCA.

Under my scenario, I would offer an incentive to at least some of the cows in the eastern pasture to move west, I'd take a bale on the tractor and head west and whoever is hungry enough to follow me would move west, whoever stays back will find there is now enough grass to do very well on, now that it is not so overgrazed. I trust that once they are fat and happy in the west pasture, they will have little incentive to go back to starving in the eastern pasture. And will resent the idea of working to feed them the next time the distribution gets out of balance, knowing that there is an easier way.

Now I have time to revisit this thread. Your analogy is flawed. Sometimes the pastures are better in the east and sometimes they are better in the west. A lot depends on the weather. Without a strong oil and gas sector Alberta would be a have not province.

Most of the benefits of the resource economies stay in the provinces where they originate. Equalization is a federal program paid for by all Canadian citizens and corporations who pay federal taxes in every province. Provinces don't write transfer cheques to other provinces.

Federal transfers include health, business subsidies,and EI of which provincial resource economies also benefit from. You need to look at all transfers and programs to get an idea how much the federal government is spending in each province. Alberta benefits from federal transfers and programs as well.

Alberta is just lucky that it is sitting on major reserves of oil and gas. Incomes and profits have been higher in Alberta than the rest of the country. And that is the only reason why Albertans pay more federal tax on higher incomes.

I am not sure why Albertans claim they are hard done by because they have had more profit and higher incomes than most other Canadians? High income earners in Ontario,Quebec and the rest of the country pay the same amount of Federal tax as Albertans.

While Alberta was flying high with $100 dollar oil Ontario and Quebec were shedding jobs because the high oil price pushed up the looney and reduced manufacturing jobs and exports.

Many Canadians moved to the west to take advantage of the west's stronger economy.

I think the issue of equalization comes down to regional politics and resentment from western politicians who like to use it as a wedge issue. It has always been good for western conservative politicians to bash the feds, Ontario and Quebec. It takes the spotlight off their own mis-management.

Harper had 10 years to oversee equalization. They tweaked the formulae. I think you should ask Harper why he didn't change much?

[sofa.king]

Do you think it's fair that quebec doesn't have to use the billions they make from selling hydro power to determine whether they are a have or have not province. If that's the case all natural resources should be exempt from determining a provinces status.

[chuckChuck]

Do you think it's fair that quebec doesn't have to use the billions they make from selling hydro power to determine whether they are a have or have not province. If that's the case all natural resources should be exempt from determining a provinces status.

Ask Harper. In one study I saw it noted numerous provinces are wanting the formulae changed for various reasons.


Conservatives' equalization payment formula good for Alberta and Quebec, bad for Ontario: report
Finance Minister Joe Oliver said Canada has a ‘fair, balanced and generous’ equalization system and changes were needed because it was becoming ‘unaffordable’
Sean Kilpatrick/The Canadian Press
June 19, 2014
8:48 PM EDT

Last Updated
January 24, 2015
11:20 PM EST
OTTAWA — Changes to the way federal transfers to provinces are calculated since the Harper government took power appear to have made Ontario a big loser under equalization programs and Alberta the big winner, according to Canada’s budget watchdog.

The parliamentary budget officer says total payments this year will see Ontario obtain $19.2-billion from Ottawa for everything from equalization to health and social transfers, but that is 3.2% less than the $19.8-billion it received last year.

While the province gains under some transfers, it will lose $1.2-billion under the equalization program designed to give so-called “have-not” provinces the fiscal capacity to provide residents services roughly comparable to those in other provinces.

Until this year, Ontario would have received about $640-million from Ottawa under a program that protected provinces from seeing transfers drop in any one year — but that option was scrapped by then finance minister Jim Flaherty in December.

Meanwhile, Alberta — Canada’s richest province — will see its total rise to $5.2-billion this year from $4.1-billion in 2013-14, a 26.8% increase mostly due to Ottawa moving to a per capita funding formula under the Canada Health Transfer program.

The only other province that comes close to Alberta’s windfall is Quebec, which will see its total intake from Ottawa rise 9.9% to $19.6- billion.
Darren Calabrese/CP

Speaking in Toronto, Finance Minister Joe Oliver said Canada has a “fair, balanced and generous” equalization system and that changes were needed to cap growth because it was becoming “unaffordable.”

Ontario was in favour of the changes when it was considered a have province prior to 2009, he said.

“The Liberal government was in favour when it was contributing to the payments, now that they are receiving equalization payments they may have a different view.”

An official with his office said total transfer payments to Ontario had risen by more than $8-billion since the Harper Conservatives took office in 2006.

But Ontario Finance Minister Charles Sousa said the PBO report confirms what he has been saying all along: “The current system of federal-provincial fiscal arrangements is working against, not for, the people of Ontario.”

“Each year, the share of federal revenue raised in Ontario is higher than the share of federal spending in Ontario,” he added. “This money could be used in Ontario to fund more hospitals, nurses or public transit.”

‘The Liberal government was in favour when it was contributing to the payments, now that they are receiving equalization payments they may have a different view’

The Liberal government of Ontario has been one of the staunchest critics of the changes. But the federal government responded that it was only applying the formula fairly.

Both are in a sense right, says Mostafa Askari, the assistant PBO, although he notes that the cumulative effect of changes to the system has been to de-emphasize the distributive element of transfers from rich to poor regions.

“The bottom line is the equalization program has moved away from being an equalization program to being another transfer program because, the way it is designed now, it does not equalize to any national standard,” said Mr. Askari.

For have-not provinces, “their entitlement will be less, so obviously the larger have-not provinces [like Ontario] will be hit by a larger amount because of their size.”

The Canadian Press

[sofa.king]

What I'm saying all provinces should be treated the equally no matter what govt is in power. It seems quebec gets the best deal because of their votes.

[chuckChuck]

What I'm saying all provinces should be treated the equally no matter what govt is in power. It seems quebec gets the best deal because of their votes.

Maybe partly true. But I think their economy is not as strong, incomes are lower and their "fiscal capacity" which is their ability to collect tax revenues is weaker than many provinces and therefore without equalization their ability to provide services would be much lower. The goal is to allow provinces to have fairly similar range of services and programs. Without it we would see much more disparity between rich and poor provinces in health care and education which are the 2 main provincial budget items.

I am not sure how much their hydro plays into the calculations.

It is a complex program and every province has its own ideas and issues around equalization.

[sumdumguy]

Do you think it's fair that quebec doesn't have to use the billions they make from selling hydro power to determine whether they are a have or have not province. If that's the case all natural resources should be exempt from determining a provinces status.

Chucky is right, why didn't Harper phase the hydro revenue in over his 10 years? Our alternative is to boot Quebec out of confederation or exit ourselves because the East has too much power over government and it isn't going to change until it has to.

[Les Magura]

You really have to put this western alienation to bed guys, you're been quoting it for years and it just doesn't wash. One of things the NEP was pushing for was a pipeline to Eastern Canada and a made in Canada price for oil and gas. So please don't complain about what you are paying at the pump or equalization payments when the rest of Canada have been gouged at the pump for decades over a decision made in Alberta thanks to the input from their buddies to south of border who pay less for it than we do.

[AlbertaFarmer5]

Maybe partly true. But I think their economy is not as strong, incomes are lower and their "fiscal capacity" which is their ability to collect tax revenues is weaker than many provinces and therefore without equalization their ability to provide services would be much lower. The goal is to allow provinces to have fairly similar range of services and programs. Without it we would see much more disparity between rich and poor provinces in health care and education which are the 2 main provincial budget items.

I am not sure how much their hydro plays into the calculations.

It is a complex program and every province has its own ideas and issues around equalization.

All of which serves only to perpetuate the imbalances, by disincentivizing the workforce from moving to where their services are needed. Which leads to increased need for equalization payments, which leads to... ad infinitum...