Equalization Payments in Canada

July 31, 2017 § Leave a comment

Over the weekend on Twitter, I was caught up in a discussion with an Albertan who didn’t believe that the province, along with British Columbia, is forecast to lead Canada in economic growth.

She argued that the province is still hurting, that big American gas companies had pulled out, and that people were leaving Alberta.  Indeed, in June, Alberta’s unemployment rate was 7.4%, but even then, that was an improvement of 0.4% from May.  But, economic growth does not mean that one can necessarily see the signs of a booming economy.  Alberta’s economy, however, shows signs of recovery, and this 2.9% economic growth, as well as a decline in unemployment rates, shows that.

She also expressed a pretty common bitterness from Albertans about Equalization payments in Canada.  These payments might be the most mis-understood aspect of Canadian federalism.  The common belief in Alberta, which is usually a ‘have’ province (meaning it doesn’t receive equalization payments), is that its money, from oil and gas and everything else, is taken from it and given to the ‘have-not’ provinces (those who receive equalization payments).  This is made all the more galling to Albertans because Quebec is the greatest recipient of equalization payments.

This argument, though, is based on a fundamental mis-understanding of how equalization payments work in Canada.  Equalization payments date back to Canadian Confederation in 1867, as most taxation powers accrued to the federal government.  The formal system of equalization payments dates from 1957, largely to help the Atlantic provinces.  At that time, the two wealthiest provinces, Ontario and British Columbia, were the only two ‘have’ provinces.  And this formal system was enshrined in the Constitution in 1982. Section 36, subsection (2) of the Constitution Act reads:

Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

The general idea behind equalization payments is, of course, that there are economic disparities across the nation.  There is any number of reasons for these disparities, which are calculated on a provincial level.  These can include the geographic size of a province, population, the physical geography, or economic activity.

Quebec is a traditional ‘have not’, which seems incongruous with the size and economy of the province.  Montreal, after a generation-long economic decline from the late 1960s to the mid 1990s, has more or less recovered.  If Quebec were a nation of its own (as separatists desire), it would be the 44th largest economy in the world, just behind Norway. It contributes 19.65% of Canada’s GDP.  But Quebec’s economy is marked by massive inequalities.  This is true in terms of Montreal versus much of the rest of the province.  But it is also true within Montreal itself.  Montreal is home to both the richest neighbourhood in the nation, as well as two of the poorest.  Westmount has a median family income of $220,578.  But Downtown Montreal ($32,841) and Parc Ex ($34,211) are the fourth and fifth poorest, respectively, in Canada.

The formula by which equalization payments are made is based on averages across the country.  Here, we’re talking about taxation rates and revenue-generation, based on the national averages of Canada.  Provinces that fall below these averages are ‘have not’ provinces.  Those who fall above it are ‘have’ provinces.  The three wealthiest provinces are usually Ontario, British Columbia, and Alberta.  But all three of these provinces have fallen into ‘have not’ status at various points. In 2017-18, in order of amounts received, the have-nots are: Quebec, Manitoba, Nova Scotia, New Brunswick, Ontario, and Prince Edward Island.  Quebec, it should be noted, will receive more than the other ‘have-nots’ combined.  The ‘have’ provinces this year are Alberta, British Columbia, Newfoundland & Labrador, and Saskatchewan.

The equalization payments, though, are not a case of taking money from Alberta to pay for Quebec’s social programs.  The funds are not based on how much one province pays for its health care system, or for a universal child care system, or cheap tuition at the province’s universities (Quebec has both universal child care and cheap tuition for in-province students).  Rather, the funds come out of the same general revenue stream that Ottawa has to fund ALL of its programmes and services.  And, each and every Canadian contributes to this revenue stream.  Thus, the fine people of Westmount contribute more to equalization payments (and general revenue) than the middle-class residents of suburban Calgary, or a person in a lower income bracket in Saskatchewan.  And, because there are more Quebecers than there are Albertans, Quebec actually contributes more to the equalization payment scheme.

It is not just angry Albertans who believe they are getting hosed by the federal government.  Many Quebecers will rail against their province’s funding priorities and point to the province’s status as a ‘have not’ as to why it should not have these programmes.  Both positions are factually wrong, and based on a fundamental misunderstanding of Canada’s equalization payments.

Cranky White Men and Viola Desmond

December 14, 2016 § 4 Comments

Last week, the Canadian government announced a new face for the $10 bill.  Canada’s first Prime Minister, Sir John A. MacDonald (1867-73; 1878-91), has long been featured on the $10, but Canada has sought to modernize our money and to introduce new faces to the $5 and $10 bills.  A decision on the $5, which currently features our first French Canadian PM, Sir Wilfrid Laurier (1896-1911), will be made at a later date.

viola-desmond

Viola Desmond will be the face of the $10 bill starting in 2018.  Desmond is a central figure in Canadian history.  On 8 November 1946, Desmond’s car broke down in New Glasgow, Nova Scotia.  Desmond was a cosemetician, trained in Montréal and New York, and operated her own beauty school in Halifax. And she was quite successful.  So, stuck in New Glasgow over night, she went to see a movie to kill some time.  She bought her ticket and took her seat.  Desmond was near-sighted, so she sat in a floor seat.  Problem is, she was black. And Nova Scotia was segregated; whites only on the floor, black people had the balcony.  She was arrested.  The next morning, she was tried and convicted of fraud. Not only were black people prohibited from sitting in the main bowl of the theatre, they also had to pay an extra cent tax on their tickets.  Desmond had attempted to pay this tax, but apparently was refused by the theatre.  So, she was fined $20 and made to pay $6 in court costs.

Desmond is often referred to as the ‘Canadian Rosa Parks,’ but truth be told, Rosa Parks is the American Viola Desmond. Unlike Parks, though, Desmond wasn’t a community organizer, she didn’t train for her moment of civil disobedience.  But, Nova Scotia’s sizeable African Canadian community protested on her behalf.  But, not surprisingly, they were ignored.  She also left Nova Scotia, first moving to Montréal, where she enrolled in business college, before settling in New York, where she died on 7 February 1965 of a gastrointestinal hemorrhage at the age of 50.

I am on a listserv of a collection of Canadian academics and policy wonks.  I have been for a long time, since the late 1990s.  A discussion has broken out, not surprisingly, about Desmond being chosen as the new face of the $10.  The government initially intended to put a woman on the bill.  A collection of white, middle-aged men on this listserv are not pleased.  They have erupted in typical white, middle-aged male rage.

One complains that the Trudeau government commits new outrages daily and he is upset that “they are going to remove John A. Macdonald from the ten dollar bill to replace him with some obscure woman from Nova Scotia whom hardly anyone has ever heard of.” He also charges that Trudeau’s government would never do this to Laurier (another Liberal), whereas Sir John A. was a Conservative.  On that he’s dead wrong.

Another complains that:

Relative to John A., Viola Desmond is no doubt a morally superior human being. If we are to avoid generating our own version of Trumpism, we must be careful not to tear down symbols of our shared history by applying current, progressive criteria to determine who figures on the currency.

Imagine with what relish Trump would tear into his opponents if the US eliminated George Washington and Thomas Jefferson from their currency. Both were slave owners – presumably far worse crimes in present terms than John A’s alcoholism or casual attitude to bribery.

Seriously. All I can say to this is “Oh, brother.”  But it gets worse.  A third states that:

I have to agree with —–’s sentiment here. We have to stop doing nice, progressive things just because we can. There is a culture war, and we need to be careful about arming the other side.
But I would say that having such things enacted by a government elected by a minority of Canadians doesn’t help. (Likely, the NDP and the Greens and even some Conservatives would have supported such a resolution, but) it does contribute to a sense of government acting illegitimately. It contributes to cynicism and outrage to have Trump as president-in-waiting with fewer votes than Clinton, for example.
With this one, I don’t even know where to start.  Since the advent of a viable, permanent 3rd party in Canadian politics, with the NDP in the 1960s, Canada has had exactly one Prime Minister garner a majority of votes in an election. That was Brian Mulroney in 1984.  he got exactly 50.0% of the vote.
Frankly, a collection of cranky middle-aged white men going on in this manner doesn’t really surprise me.  The first commentator has denigrated Desmond in this manner (“some obscure woman”) in each of his subsequent posts (and has diagnosed me with a variety of psychological problems for deigning to disagree with him).  They, especially the first one, take it as a personal insult that the government should seek to democratize our money, to have the faces on our currency greater reflect the nation, which is one of the most diverse in the world.  For some reason, they see this as an affront, as a challenge to their privilege.
And, thus, they make the perfect argument as to why Viola Desmond should be the face of the new $10 bill in Canada.  I don’t agree that she is obscure, I don’t think many African Canadians, people of colour, or Canadian historians would say so.  This is a positive step on the part of the Canadian government.

 

The International Museum of Folklore

February 13, 2015 § 6 Comments

In his Remembering the Year of the French: Irish Folk History & Social Memory, Guy Beiner talks a lot about folklore in Connacht, the western-most Irish province.  This is where the failed 1798 French invasion took place, and Beiner attempts an archaeology of the folklore of the region in relation to the invasion and its relation to the wider 1798 Rebellion in Ireland.

I’ve never really worked in the realm of folklore, but I’ve always been fascinated by it, dating back to my undergrad years, though my profs were all insistent that folklore did not belong in a history class. In grad school, I read Ian McKaye’s book, The Quest of the Folk: Antimodernism and Cultural Selection in Twentieth-Century Nova Scotia, which was about the collection of Scots and Irish folklore, especially in Cape Breton by Helen Creighton and others in the early decades of the 20th century, around the same time that folklorists were running all over Ireland, England, Scotland, the United States, and various other countries, collecting the folk stories of the region.

Beiner argues that

It is often claimed that modernization struck a deathblow to ‘traditional’ oral culture.  Yet, developments in communication and information technologies also provided new media for the transmission and documentation of folklore.

Beiner goes on to discuss all the ways in which modern technology has aided in the collection and dissemination of traditional cultures and folklores.  But he is clearly overlooking the fact that modernization DID work to kill traditional oral culture, a point made brilliantly by Angela Bourke in her The Burning of Bridget Cleary: A True Story.  This point is made all the more clearly by Keith Basso in his Wisdom Sits in Places: Landscape and Languages Among the Western Apache.  Most of the events described by Basso, in terms of his ethnographic amongst the Western Apache of Arizona, take place in the late 1970s and early 1980s, yet his book was published in 1995.  In his epilogue, Basso notes the massive change that had come to the community of Cibecue in the fifteen years between his ethnographic work and the book, and what is clear is that modern technology and modern life was killing the traditional way of life for the Western Apache, and with that, traditional relations to the land and the ancestors, which came through in what could be called folklore.

Ireland was no different (nor was any other folk culture anywhere).  Modernization has worked to kill traditional oral culture.  And while the stories still exist, and we can sill read them and listen to story-tellers, the culture they describe no longer exists.  Folklore, through the very act of collection in the early 20th century, was made static and museumized.  It became something to be fetishized and studied, and ceased to be a living thing.

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