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Transfer / Equalization

Equalization payments are federal government transfers to provinces aimed at ensuring all Canadians have
access to comparable public services, regardless of their province of residence, according to CBC and The
Canadian Encyclopedia. They are based on a formula that considers each province's ability to generate its own
revenues, with payments made to provinces with weaker fiscal capacities according to Library of Parliament.

In 2024-2025, Alberta, British Columbia, and Saskatchewan did not receive equalization payments. These
provinces have higher fiscal capacities, meaning they are able to generate more revenue on their own.
Equalization payments are made to provinces with lower fiscal capacities to help ensure a minimum level of
public service delivery across the country.

The western Provinces have long held that equalization payments favor the east and are unfair. So let us
break it down. Each of the 3 western provinces have lower population but generate huge GDP revenue. From
revenue generated, these provinces have potentially more than enough income to handle fiscal
responsibility for it's population. The 3 Territories have both low population numbers and low to almost
non-existant revenues. PEI, Newfoundland/Labrador, New Brunswick have more of a seasonal economy that
booms in summer and busts in winter and moderate population. Manitoba and Nova Scotia have much larger
population so much more fiscal demand. That leaves Ontario and Quebec which has the lion share of all
Canada's population. Fiscal demand to provide basic services for such a large population is not attainable
from revenues even though they produce high GDP earnings.