Federal government ignores Saskatchewan’s call for changes to equalization

Despite calls to rework the equalization process, the federal government is moving ahead with legislation that renew equalization for a five-year term, beginning in 2019.

The regulations, part of Budget 2018, received royal assent earlier this week.

On Wednesday, Saskatchewan Premier Scott Moe penned a letter to the prime minister, as well as his nine other provincial counterparts, suggesting a new 50-50 version of equalization.

A statement from federal Finance Minister Bill Monreau’s said “After over a year of intense discussion and consultation – including an in depth discussion at the last meeting of the Finance Ministers meeting in December – our Government renewed equalization for a 5-year term in Budget 2018.”

“Equalization enables less-prosperous provinces to provide public services that are comparable to those in other provinces at comparable rates of taxation,” it continued.

Moe has been calling for changes to equalization since May, taking particular aim at the amount of money Quebec has received.

In an emailed statement the premier said “This status-quo formula will see Quebec receive close to $60 Billion, while provinces like Saskatchewan, Alberta, and Newfoundland and Labrador will receive $0.”

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He also argued that “Without notifying Canadians, the federal government has snuck through a 5-year renewal of the same flawed equalization formula. Saskatchewan was aware that the federal government was in favour of a status-quo formula, but was at no point formally notified of renewal in the federal budget.”

It’s a fact the finance minister’s office contested, arguing officials for provinces and territories were informed of the changes when they were proposed in Budget 2018. The topic was also discussed at the December 2017 finance ministers meeting.

Provincial Finance Minister Donna Harpauer will head to Ottawa next week to meet with Morneau and other finance ministers to discuss the global economy, Canada-U.S. relations, and the challenges facing Canadian businesses.

Harpauer plans to bring up the topic of equalization at the meeting.