Why Alberta Won’t Be Receiving Transfer Payments This Year

 

 

 

Canada’s equalization program reviews the status of the “have” and “have not” provinces every five years

BY ALBERTA OIL STAFF

There are five years between each scheduled review of Canada’s equalization program. The program—there is no equalization “fund”—redistributes revenues based on a formula that is both simple and complex. The program’s income distribution is based on a three-year average of all ten provinces’ and three territories’ potential revenue per capita. Currently, federal taxpayers in both the “have” provinces of Alberta, B.C., Newfoundland and Saskatchewan, and the six “have not” provinces will continue to pay the current “have not” provinces for at least another year, as 2016 to 2017’s calculations still factor in the boom years of high oil prices.

To be clear, the provinces and territories don’t pay each other anything. The federal government transfers money raised through federal taxes to “have not” provinces. Rich federal taxpayers in Nova Scotia will see more of their money go to the government of Nova Scotia in federal transfers than less well-to-do federal taxpayers in Alberta would pay to Nova Scotia.

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