The Equalization Scam: Ontario the “Have” Province Gets $963M

The School for Public Policy published a useful review of the 2018-2019 equalization payments.

Let’s take a look.

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Looks pretty typical in a lot of ways. West (+Newfoundland) pays East.

Also, while Quebec gets a lot of flak for getting the biggest payment, they are far from the biggest recipient on a per capita basis.

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But wait a second, didn’t Ontario just become a “have” province? Why are they getting a big cheque?

And that leads to the most interesting part of this year’s equalization:

This brings us to Ontario. The $963 million it will receive in equalization is entirely composed of adjustment payments. Absent these payments, the total equalization program would cost $17.2 billion and Ontario would receive nothing. But at $70 per person for receiving provinces, the adjustment payments add $1.76 billion, which brings the total cost of the program to the $18.96 billion dollars paid in 2018/19.

A Costly Quirk?

Why should adjustment payments be made at all? And why should they be paid to Ontario, a “have” province prior to this stage of the formula? The limit was put in place by the previous government in 2009 to keep costs under control and limit uncertainty. But why does it also act as a floor? And… must it? The Fiscal-Arrangements Act is somewhat ambiguous on this point.

Nope, this doesn’t appear to be a redistributive scam at all. It’s not like Canada already has the federal health and social transfers, or that the federal government already spends money in provinces at different rates.

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Equalization 2018

Canadian Author “Impressed” by More Subsidies for Canadian Authors

Without public schools forcing students to read excruciatingly awful novels like The Stone Angel on a massive scale, Canadian authors like Margaret Atwood would probably sell far fewer books.

We should remember this when we read stories about Margaret Atwood’s approval of a new Ontario government policy that will force public school students to read even more boring books by Canadian authors.

Assuming no more than self-interest, artists, like most people, will tend to welcome subsidies that benefit themselves. It’s the model of corporate welfare applied to the artistic world. When they say it will “strengthen arts and culture,” remember there is no reason to believe that “good” arts and culture will prevail as the new learning material for children. Likewise in the corporate welfare scenario, subsidies to, say, the auto industry will be claimed to “strengthen the economy and domestic industry” even though economics tells us the opposite is true.

To the extent it survives on government money, art is a welfare program. The entire process of deciding what novels should be studied in public schools is completely political and thus likely to produce bad outcomes. Sometimes you get lucky and a real treasure comes out of the system, but the results tend to be bad. By relying on the government to “strengthen arts and culture”, you can be assured the arts and culture will be get worse while kids consider drinking bleach to avoid being forced to read books like The Stone Angel.

 

 

Equalization Payments 2016-2017

Presented without comment.

equalization

Trudeau Will Give $2.65B in Climate Change Welfare to Corrupt Foreign Governments

It was bad enough when Harper was doing this, but Trudeau will double it. Terrible.

Are we to be spared nothing when it comes to the lies of climate change?

Windsor and Detroit: What’s the Difference?

Detroit has declared bankruptcy. The images and descriptions of the city evoke a wretched ghetto. Meanwhile, if you cross the border to Windsor, Ontario you find a relatively nice place.

Both cities have economies heavily invested in automobile manufacturing. Both cities also have various welfare systems available. They are both rife with municipal regulations. Canadian and American cultures are fairly similar.

So what’s the big difference?

Detroit’s bankruptcy filing lists about $18-20 billion worth of debt. Even if you low-ball it, this amounts to debt of about $26,000 for everyone in Detroit. This is a city where the average per capita income is a pathetic $14,700 per year.

Windsor’s debt is around $115 million. They have about a third of Detroit’s population. Windsor’s debt per capita is $545 only.

Debt is not bad. The key is to use the debt for something productive. Since all government spending is inherently wasteful, cities should spend as little as possible and minimize their debts. Otherwise they will become Detroit.

Alberta Floods 2013: Putting Fresh Perspective on Foreign Aid

The Premier Redford and Prime Minister Harper have pledged “full support” to victims of the devastating Alberta floods.

What they do not mention is that both Alberta and Ottawa are broke. There is no special fund for disaster relief. They can only provide help by taking more of other people’s money — either through taxation or borrowing. They will probably borrow money from countries like China.

At a time like this, giving money to corrupt foreign governments seems even worse than it does normally.

Last year, Canada gave almost $6 billion away in foreign aid (MS Excel). That might seem small, but it is a very significant amount of money for Canada’s small population. That money would definitely be useful to help Canadians during times of disaster.

The biggest recipient of our foreign aid was Ethiopia —  an American puppet state that takes money from the West to fight brutal wars against the Somalis. Another big recipient of Canadian aid is Afghanistan — where we help NATO inflict man-made disasters with missiles, then we pay up to rebuild what we destroyed.

Southern Alberta is underwater, thousands are homeless, and our governments have no money. But aren’t you glad the Canadian governments gives millions to evil regimes in Jordan, Burma, and North Korea?

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