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03-24-2013, 08:14 AM
Puck's Avatar
Join Date: Jun 2003
Location: Ottawa
Country: Tahiti
Posts: 9,060
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Yes but knowing how the system actually works takes the fun out of b*tching.

Everybody pays federal taxes, the equalization formula figures out how much money, if any, the federal government will return to provincial governments under that scheme.

If Ontario contributes say $100 billion to the federal government and gets $500 million back in equalization, it's still a net contributor to the federal coffers. The money isn't coming out of Alberta's pocket. However three provinces can complain they aren't getting any money returned to them under that scheme. There are other many other federal programs schemes and expenditures to redistribute funds. Tax breaks to specific industries prevalent in one province (i.e. oil) can also be an indirect way of redistributing money. In the US, they use Defense Dept. contracts to spread the wealth around.

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