Taxpayer alert! – Provincial Bailout?

We think every taxpayer should know that our the provincial Premiers will be asking for a bailout. Equalization payments are expected to drop and the provinces won’t be willing to tighten their belts any more than our municipal governments are.

Specifically, some premiers are seeking a guaranteed floor on equalization payments at their current levels. Doing so would commit the federal treasury – the taxpayer – to spending a minimum of $14.8 billion each year on Equalization, regardless of how provincial economies perform.

Given that payments are projected to fall between 10 and 15 per cent, an Equalization bail out would require the Harper government to top up the program between $1.5 and $2.2 billion a year. This money, unbudgeted, of course, would have to be funded through assuming more debt, taking $2 billion a year from other programs or raising taxes. None of these is a wise choice.

The quote is from Kevin Gaudet of The Canadian Taxpayers Federation. Do we, the taxpayers, think any of these are wise choices?

When our household incomes take a hit we do something to cut costs. Shouldn’t our governments at every level do the same? We all benefited from the strength of the Alberta and Ontario economies in higher equalization payments; now that they aren’t doing so well the Premiers want to keep  payments at previous levels by introducing a “floor”. This will add considerably to national debt – our debt, that we, our children and grand-children will pay.

... recipient provinces have refused to prepare for a decline in payments. As a result they are begging the federal government to bail out the program. Taxpayers should not reward this poor planning by running up more federal debt.   This new demand to keep Equalization payments at these all-time high levels may either pit east against west or may cost taxpayers even more.

British Columbia, Alberta and Saskatchewan don’t receive Equalization payments. Their premiers either will band together to oppose this program bailout or they will trade their acquiescence to a guaranteed floor on payments for some other expensive sop.

They reasonably could argue that a federal bailout would siphon even more federal general revenues east, especially to Quebec. In essence western taxpayers would further subsidize a $7-a-day daycare program in Quebec, for example. Western premiers will want this stopped or will demand ‘their fair share’ in exchange.

We are not hopeful that Darrell Dexter will join the western provinces in rejecting the “floor” proposal, but he should. We are also not hopeful that Harper will resist a concerted effort by the Provinces, given that a 56% of equalization payments go to Quebec; politically that’s where the Conservatives have to garner favour.

What can we do? We can speak out to our local, provincial and federal masters and tell them that enough is enough. We need smarter not more expensive governance.

Also,  the Can Federation of Taxpayers has no presence in Atlantic Canada, but they would like one. And they don’t run on debt or depend on the public purse but on individual contributions.

there’s an old saying that you can’t save the world if you can’t pay the rent.  That’s especially true for the CTF.

The CTF receives no money from large corporations, unions, foundations or government.  We do not have a charitable tax number.  Our growth is grounded solely in the voluntary contributions of thousands of concerned taxpayers from coast to coast.

It would certainly be a benefit to have an Atlantic group speaking out on Maritime issues, working for us the taxpayers. Think about visiting their site via the link above and contributing on line to the fund they have started to establish a presence here. Or you can do this by calling 1-800-667-7933.

One response to “Taxpayer alert! – Provincial Bailout?

  1. Dear Prime Minister,

    I need some stimulation, man.

    Where can I get me one of those equalization payments?

    Your affectionate servant,