Canada’s equalization program makes no sense
Episode Stats
Words per Minute
131.78119
Summary
In Canada, so much of a province s wealth is tied to its willingness to extract and produce natural resources. And as a result, the whole country is getting handouts from the federal government. In this episode, Candice explains why this is a problem.
Transcript
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Canada has a federal program that transfers money away from wealthier provinces and pays
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The idea is that all provinces across Canada should have similar resources in order to
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deliver similar services like health care, education, social assistance, all the programs
00:00:21.360
that are administered by the provincial governments.
00:00:24.240
But in Canada, so much of a province's wealth is tied to its willingness to extract and
00:00:40.160
The haves contribute to the equalization fund, while the have nots receive the cash payments
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But the number one indicator of status in this program is whether or not a province is willing
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Alberta, Saskatchewan, Newfoundland and British Columbia are all have provinces.
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They also make up about 98% of Canada's total oil production.
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Both Newfoundland and Saskatchewan were long-time recipients, they were have not provinces.
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That is, until they started developing their fossil fuel industry.
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Now, let's take a look at these have not provinces.
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First, Prince Edward Island, Canada's smallest province.
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PEI will get $419 million in equalization payments this year.
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PEI doesn't produce any fossil fuels, despite having pockets of natural gas deposits.
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There has been no drilling whatsoever since 2007.
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Next, Nova Scotia will receive $1.9 billion in cash transfers this year.
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The province produces a tiny little bit of natural gas from its Sable Island offshore field,
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which accounts for about 0.07% of Canada's total petroleum production.
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But a January 2018 study found that the province's natural gas reserves could be worth up to $60
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The problem is that Nova Scotia has a ban on hydraulic fracturing, the method needed to access
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a deposit, and the local government has no plans to reverse this ban.
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Next, New Brunswick, which will also receive $1.9 billion in federal cash transfers this year.
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The known shale gas reserves in New Brunswick are estimated at 15 trillion cubic feet.
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That's enough to last for 350 years at current demand levels.
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And yet, much like its neighbour, the government of New Brunswick instituted a moratorium on
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Why create good-paying jobs for young Canadians in eastern Canada, when you can simply rely
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Finally, Quebec, who will receive $11.7 billion in federal transfers this year.
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Quebec is not currently an oil exporter, but based on the proven reserves in the Anticosti
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Islands and the St. Lawrence River, it's estimated that Quebec could one day produce up to 300
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Unfortunately, the Quebec government imposed a ban on drilling that has prevented any further
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In 2013, former Quebec Premier Pauline Mauois argued that if Quebec ever were to develop
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its fossil fuels, well, that it shouldn't have to pay any future oil wealth to other Canadian
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Anyone who pays attention to this program knows that it's completely broken.
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The reality is that provinces who are willing to develop their natural resources, mainly
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the fossil fuel industry, are paying the other provinces not to develop their natural resources.
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For the True North Initiative, I'm Candice Malcolm.
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You can follow the heading down to the secretary of Quebec, who was going to qualify for the