Or it would, if Wall hadn’t already abandoned this fight in 2007.
“Equalization is for ‘have-not’ provinces and we’re a ‘have’ province,” Wall told the Canadian Press after defeating Calvert’s government and dropping its equalization challenge.
What do times and tunes have in common? They both change.
What is equalization and why does it matter to Saskatchewan?
Along with the Canada health and social transfers, equalization is one of three federal transfer payments to provinces. It’s calculated using five indicators — personal and business income taxes, consumption taxes, property taxes and natural resource revenue — that are supposed to provide a rough measure of provincial GDP.
Equalization’s goal — a valid one — is to help all provinces provide “reasonably comparable” levels of health care, education and welfare to their citizens regardless of their economic strength.
For most of its history, Saskatchewan has been a “have-not” province. But thanks to a commodity super-cycle fed by China, India and other emerging markets, we’ve been a “have” province for over 10 years.
But with oil and many other resource prices in the crapper, our much-vaunted Sask-A-Boom is sputtering — and for the first time since the Saskatchewan Party government was elected we’re facing economic hardship.
That’s bad news. But it gets worse.
To smooth out bumps in the program, equalization calculations have a three-year time lag. That means we’ll be classed as a “have” province for two more years before the current resource slump gets factored into the formula. And that means Saskatchewan, along with Alberta, Newfoundland and B.C., will transfer around $34 billion to the six remaining provinces in 2016-17.
Ouch. Maybe the old NDP government was right to fight for a better equalization formula after all?
When the Sask. Party government was elected in November 2007, the resource-fuelled boom was still gathering steam and Premier Brad Wall dropped the NDP lawsuit. Wall justified the move by saying he wanted harmonious relations with the federal Conservative government.
But Harper’s broken promise cost Saskatchewan over $800 million.
“They inherited a ‘have’ province, and I think they just believed we could never see the kind of decline in oil revenue that we’ve seen [today],” says Calvert. “We were used to $20-$30 a barrel oil, that was sort of the norm. When it got to $50 a barrel, I could hardly believe it. Saskatchewan’s been in good shape economically for a number of years, but we’re starting to see the pinch.”
And now we have the spectacle of Wall — who hasn’t missed a chance to potshot Justin Trudeau since the October federal election — going cap-in-hand to Trudeau’s Liberal government for equalization relief.
“It’s more disappointment than vindication that we didn’t get to this position earlier,” says Calvert, summing up his feelings on the situation. “But Mr. Wall is at the right position now.”
Equalization Returns | Prairie Dog
“Equalization is for ‘have-not’ provinces and we’re a ‘have’ province,” Wall told the Canadian Press after defeating Calvert’s government and dropping its equalization challenge.
What do times and tunes have in common? They both change.
What is equalization and why does it matter to Saskatchewan?
Along with the Canada health and social transfers, equalization is one of three federal transfer payments to provinces. It’s calculated using five indicators — personal and business income taxes, consumption taxes, property taxes and natural resource revenue — that are supposed to provide a rough measure of provincial GDP.
Equalization’s goal — a valid one — is to help all provinces provide “reasonably comparable” levels of health care, education and welfare to their citizens regardless of their economic strength.
For most of its history, Saskatchewan has been a “have-not” province. But thanks to a commodity super-cycle fed by China, India and other emerging markets, we’ve been a “have” province for over 10 years.
But with oil and many other resource prices in the crapper, our much-vaunted Sask-A-Boom is sputtering — and for the first time since the Saskatchewan Party government was elected we’re facing economic hardship.
That’s bad news. But it gets worse.
To smooth out bumps in the program, equalization calculations have a three-year time lag. That means we’ll be classed as a “have” province for two more years before the current resource slump gets factored into the formula. And that means Saskatchewan, along with Alberta, Newfoundland and B.C., will transfer around $34 billion to the six remaining provinces in 2016-17.
Ouch. Maybe the old NDP government was right to fight for a better equalization formula after all?
When the Sask. Party government was elected in November 2007, the resource-fuelled boom was still gathering steam and Premier Brad Wall dropped the NDP lawsuit. Wall justified the move by saying he wanted harmonious relations with the federal Conservative government.
But Harper’s broken promise cost Saskatchewan over $800 million.
“They inherited a ‘have’ province, and I think they just believed we could never see the kind of decline in oil revenue that we’ve seen [today],” says Calvert. “We were used to $20-$30 a barrel oil, that was sort of the norm. When it got to $50 a barrel, I could hardly believe it. Saskatchewan’s been in good shape economically for a number of years, but we’re starting to see the pinch.”
And now we have the spectacle of Wall — who hasn’t missed a chance to potshot Justin Trudeau since the October federal election — going cap-in-hand to Trudeau’s Liberal government for equalization relief.
“It’s more disappointment than vindication that we didn’t get to this position earlier,” says Calvert, summing up his feelings on the situation. “But Mr. Wall is at the right position now.”
Equalization Returns | Prairie Dog
