Poorer provinces favoured by feds, says study

The government financially coddles the nation’s least productive provinces, finds a new Fraser Institute study.

These “have-not” provinces are identified as Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador. On the flip side, B.C., Alberta, Saskatchewan and Ontario pay the highest taxes and generate the most earnings, according to the study.

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Despite the latter pulling in more profit, there are more professors, doctors and nurses located in Manitoba, Quebec and on the East coast, adds the study. In these regions, students also benefit from more federal funding.

“A university student in Vancouver pays substantially more for tuition than her counterpart in Quebec or Manitoba, and a patient in Nova Scotia has easier access to a doctor than a patient in Alberta. The tax dollars of [other provinces] are used to provide those [better] services,” says Fraser Institute senior fellow and study author Mark Milke.

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“For example, students in the recipient province of Quebec pay $2,774 per year in highly-subsidized tuition,” he adds, while those in B.C., Saskatchewan and Ontario pay between $5,000 and $7,000.

In the study, Milke compares how federal funding is spread across the country. More specifically, he examines the federal equalization transfer program—which aims to ensure all provinces are able to offer comparable services.

He finds, “The federal government’s total transfers to the provinces amounted to 60.1 billion, or $1,725 per capita in 2012 and 2013.” The problem, he says, is too much tax income from Canada’s richest provinces is being handed to the poorer regions.

Milke offers two solutions that will help level the playing field across the country. Read more.

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