Nov 10
17
Massive dependency of eastern provinces at other taxpayers’ expense
National Post – Nov. 15, 2010
Bureaucracies ‘stealth’ subsidize have-not provinces: study
By Kathryn Blaze Carlson
Canada’s rich westernmost provinces are footing the bill for more than $2-billion annually in “stealth” economic subsidies to the country’s poorest provinces – above and beyond the $14-billion in official federal equalization, according to a study released Monday by a leading Canadian think-tank. This “stealth equalization,” as it is described in the Frontier Centre for Public Policy paper, is disguised in disproportionately large federal bureaucracies across the perennial ‘have-not’ provinces, with the exception of Quebec. At the extremes, Prince Edward Island has 3,657 federal employees per 100,000 people, while Alberta has just 936.
“I imagine this will be news – surprising news – to a lot of Canadians,” said Ben Eisen, author of Stealth Equalization: How Federal Government Employment Acts as a Regional Economic Subsidy in Canada. “We have an explicit equalization program that most are aware of, but this is one of the numerous other ways that Canadian public policy takes wealth out of the highest-productivity regions and redirects it to lower-productivity regions.”
Federal government employment in the Maritime provinces and Manitoba, as a proportion of the population, is between 63% and 225% higher than the national average – amounting to a net transfer of $942-million into the Nova Scotia economy and a net transfer of $1.56-billion out of Alberta, the study found. Ontario – despite hosting Canada’s national capital – joins Newfoundland and Quebec in the middle of the pack in terms of general federal and Crown corporation employees. Saskatchewan, British Columbia, and Alberta are well below the national average level of 1,602 employees per 100,000 people.
“It’s sort of absurd: At what point do you stop and say, maybe some of these people should start looking at some serious private and productive investment in a kind of market-based economy?” said Link Byfield, publisher of the now-defunct Alberta Report and a Wildrose Alliance party founder and candidate. “They’ve always acted like that’s impossible, and I’ve never understood why … [The recipient provinces] are sentenced to forever be a federal protectorate, and that’s how they’re run.”