Equalization at arm's length

Each and every province has a vested interest in the outcomes of the program—precisely the reason why a neutral arbiter could help cut through the conflicts and the politics that make the program so confusing and misunderstood. [...] PoliticizAtion AnD the governAnce oF equAlizAtion in cAnADA Beginning in 2001, the equalization program moved to the centre of policy and political debates in Canada. [...] In the context of the Liberal Party of Canada facing a serious threat to its dominant position for the first time in a decade, Prime Minister Paul Martin promised to “fix healthcare for a generation” and, after having escaped the election with a minority government, was keen to reach a “healthcare deal” with the provinces that would see the federal gov- ernment transfer larger sums of money for be [...] Martin’s successor, Stephen Harper, also became a target of Danny Williams and various other Premiers when he implemented most of the recommenda- tions of the O’Brien Commission, including the 50 per cent inclusion of natural resource revenues in the calculation of provincial fiscal capacity and a fiscal capacity cap on payments.3 In 2008 the status of Ontario in the equalization program became a [...] The Commonwealth Treasury tasks the CGC, through “terms of reference,” to determine the most appropriate per capita relativities to be used to divide the pool of GST money between the states.4 Because the CGC is composed of respected experts, widely seen as non-par- tisan, and is at arm’s length from the government, its recommendations come with the veneer of neutral fiscal expertise.