B.C. considering lawsuit against Feds over equalization program

Wednesday marks the final day of the premiers’ meeting in Halifax, and B.C.’s premier wrapped things up with a promise.

Premier David Eby confirmed that B.C. will support Newfoundland and Labrador’s court case against Ottawa over equalization payments.

Eby says he and his government are also considering whether B.C. will launch its own similar challenge.

“We have struggled with the fact that we’re paying into this system that is providing so much to the people of Ontario, the people of Quebec, and yet, the people of Ontario and the people of Quebec appear to have access to federal funding that is not available to British Columbia,” Eby said.

According to the federal government, the equalization program was entrenched in the Canadian Constitution in 1982.

“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 constitution states.

The feds explained, “The allocation of Equalization payments is based on a measure of fiscal capacity, which represents the revenues a province could raise if it were to tax at the national average rate.  Equalization supports provinces that have a lower than average fiscal capacity. Provincial spending decisions and overall fiscal results do not affect Equalization.”

Eby said it’s unreasonable for taxpayers in B.C. to be providing money to other provinces for basic services.

“Ontario has challenges, absolutely, we all do across Canada, but delivering basic services is not one of their challenges,” he explained.

“We feel that it’s unreasonable for B.C. taxpayers to be sending money to the federal government to be distributed to provinces.”

In May this year, the Newfoundland government launched its legal challenge, claiming the “fairness” of equalization is not achieved for the province.

“This challenge is all about ensuring that equalization achieves what is intended in the Constitution – to ensure fairness among all provinces within Canada relating to the cost of delivering public services. From our perspective, the Government of Canada’s equalization program is insufficient in that it does not consider the cost of delivering services in a province such as ours with a geographically dispersed population; nor does it consider the inequity caused by including 100 per cent of our natural resource revenue in the formula. We want the equalization program to treat provinces equitably,” Deputy Premier and Minister of Finance Siobhan Coady said.