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History
The basics of equalization payments have been around since Canadian confederation when the federal government had most of the taxation powers. The federal gove...transfer payments to the provinces to cover their needs. There was no obligation that these transfer...
A formal system of equalization payments was first introduced in 1957. The idea was based on the proposals of American economist James M. Buchanan and they were introduced mainly to help the struggling Atlantic provinces who were seeing low rates of growth and high rate of emigration to central Canada...
The original program had the goal of giving each province the same per capita revenue as the two wealthiest provinces, Ontario and British Columbia, in three tax bases: personal income taxes, corporate income taxes and succession duties (inheritance taxes). Five years later, 50 per cent of natural resource revenues were included as the fourth tax base. At the same time, however, the standard of the two wealthiest provinces was lowered to the national average. In 1967 the system was redesigned to work with every government revenue scheme with the exception of energy; this gave Canada by far the world's most generous system of equalization payments.
The rise in energy prices and the resulting increase in provincial natural resource royalties in the late 1970s created several problems for the equalization formula. The need for amendments to the formula became clear when the traditional "have" province of Ontario qualified for equalization payments in 1978. This result went against the spirit of the system and would have led to substantial costs for the federal government; it was agreed that Ontario should be excluded from receiving payments. In 1982, the equalization standard was shifted from the national average to the average of the five "representative" provinces: British Columbia, Saskatchewan, Manitoba, Ontario, and Quebec.
Currently (2012) the per capita benefits from equalization greatly benefits residents of the Maritimes:
PEI - $ 2,350 per capita
NB - $ 1,985 per capita
NS - $ 1,342 per capita
also:
MB - $ 1,353 per capita
QC - $ 934 per capita
ON - $ 246 per capita
AB, SK, NL and BC were not eligible for 2012.
It is not a perfect system. There is no such thing. However, looking at the history of this country the system has served Canadians well.
"university tuition should be reduced."
Great concept. Most folks will agree to that.
However, university training costs are high. Someone has to pay the costs.
If university/college tuition are reduced or eliminated, the costs still have to be paid. If students do not pay, taxpayers will have to foot the bill.
The next question is which taxpayers?
Education is a provincial responsibility. Who will pay the bill? Current taxpayers? Of course not as provinces are running deficits and already have to borrow money every year to pay their bills.
So, all education cost reductions will result in more money being borrowed by the provinces, putting upward pressure on interest rates. Eventually that money borrowed today will have to be repaid by our children and grandchildren through their taxes.
Do we really want to mortgage their future?
Is there another funding solution - other than raise taxes for current taxpayers (both individuals and corporations or consumption)? What impact would raising taxes today have on our economy? on our society?
There was a time that an egg was 5 cents. During the gold rush, an egg was 50 dollars. Why? Simple….just plain old fashioned greed.
It always starts small and then snowballs. When people make more money, manufacturers know that people have more disposable income. Also when people have the ability to buy now pay later, manufacturers and others know they have more disposable credit. So they raise their prices and things become more expensive. Then the people who work want more money go be able to afford the luxuries of life and also the necessities. Of course at that point business has to raise it’s prices to compensate for higher wages in order to make a decent profit. And on and on and on it goes.
Then there are the governments and what they spend money on. Some are necessities and other things are just a pure waste or luxury. Where do they get their money?…..from the taxpayers……and the more money taxpayers have…..the more they can get.
The more people have…..the more they want. When people have extra money….there are those who want to take it away from them.
Of course I am not saying anything that people hopefully already know.
When it comes to education should it be equal for all? Yes. But as you suggest….where will the money come from? My view is from the government and that means the taxpayer. But taxpayers already feel overburdened. Now we are at the crux of the matter……..why are we overburdened?
Well my view is the governments waste a lot of money and if you added it all up from coast to coast we would find it is a massive amount. Some are obvious to the taxpayer….fake lakes….washrooms out in the middle of nowhere….international government meetings that cost millions so a politician can put a feather in his cap….and the same cap hosts a feather from extravagance such as the millions spent on a one week sports event. Other expenditures we have little to no knowledge about. All of this applies to municipal and provincial and federal governments.
We elect employees to work for us…..and then they become kings and queens…..and we have nothing to say and little power over them till the next election. It’s like letting a thief have a certain amount of time to steal from your home.
The people…..need to take back the power.
"and this is fair?
right now they only pay a percentage of the actual costs and like all other thing in life it should be user pays-or a least like it is a pay a percentage."
This sounds like a speech by Republicans at an American convention.
We are in Canada and should apply Canadian values.
Retirees (over 65) get most of their prescriptions at no charge. Actually, the pharmacist does get paid by the provincial government and the money to pay for the prescriptions come from the taxpayers.
That is our way (not the American way)
Is it fair?
Yes it is. The concept being that seniors have spent 40 to 50 years working to build the country and deserve a break in their old age.
As far as free college or university education, it is simply a matter of getting a concensus as to where the funds will come from.
Currently in Quebec, the population (taxpayers) agrees to fund a larger portion of higher education costs than other provinces. Their choice. Their taxes.
Would all of Canada benefit from the same approach? Yes.
"Everybody should get to pay 25% Value Added Tax on goods and services in Canada so that everybody who wants to can get a free University degree"
This is one of the problems I see every day from these discussion boards. The lack of factual information whether it comes from the left or the right or the center. Why is it so difficult to deal with facts instead of tacking numbers totally out of contect trying to make a political statement?
Facts on tuition charged to Canadian university and college students are easily available:
http://www.canadian-universities.net/Campus/Tuition-Fees.html
You do not need a Master degree from MIT to quickly figure that a 2% increase in GST would take care of it all.
The question is: are Canadians willing to pay the price?
Or are they other priorities where the money should go? Low income families, home care for seniors in need, universal day care centres, etc...
It could be interesting discussing these many options if everyone would take a Valium and stick to facts.
" the answer would be a resounding NO. "
I am not so sure about that.
"Raising the GST is like a dumb idea"
Again, it is a matter of opinion. Most Canadian economists agree that an increase in GST (with adequate protection for low income earners) is preferable to an increase in income or corporate tax.
Eventually Canadians will have to decide where to raise the tax to pay for the national debt. We can't keep going like we are under the current conservative government, borrowing more money andraising the national debt every year. We will have to pay for it or... do we really want our children and grandchildren to be stuck with it?
While everone agrees governments at all levels "waste" money, lots of money, lots and lots of money, trying to curb that "waste" will not unfortunately bridge the gap between what our governments take in and what they spend.
Take a look:
The chart is slightly outdated. We have now surpassed $600,000,000,000 last November:
http://www.huffingtonpost.ca/2012/11/23/national-debt-canada-600-billion_n_2177590.html
" That is your position, isn't it, Pierre? "
Not quite.
Personally, I favour universal (free or low cost) access to college and university education.
However, before getting there, we need - as a nation - to determine what our priorities should be, disregarding for a moment provincial jurisdiction.
I would not oppose 12% or even 15% GST (assuming adequate protection is provided to low income earners) in addition to whatever PST each province wants to charge IF the proceeds are used to -
reduce the national debt (we save interest payments)
create universal free or low cost day care centres (we help many get a paying job)
improve health home care for those in needs
create universal (free or low cost) college and university education
increased benefits for low income seniors (the money they get, they spend helping the economy)
reduce income tax for low/medium income earners (again more money to spend helping the economy)
Obviously, it could not be done overnight. The first thing we need to do is balance our national budget to stop the borrowing. That is something the current government has proved unable to do. Year after year they find excuses to delay a balance budget by another year. Instead, they have reduced corporate tax, lowered GST, etc... Until that trend is reversed, there is little the government can do to improve the social fabric of this country.
And that should be our number 1 priority.
nothing in life is equal to start with and not all children are created equal-some are smarter than others-plain and simple.
And that view is a prime example of what holds back many in society and the world. With the exception of mentally challenged children……….''ALL'' children are created equal. It is small minded and societies that hold them back.
Which will enable these newly minted geniuses to compete for jobs in the paint dept. of Home Depot. And they can be consulted for advice on whether to paint yer living room Contra Green, or Leftist Yellow.
Do you fish?
to quickly figure that a 2% increase in GST would take care of it all.
Or………..a 2% cut in government waste across the board. Actually we could probably do a 20% cut and never feel a thing.
A lot of people neither want to give to......or give up.
