Author: Ken Boessenkool
The contribution by Ken Boessenkool takes the series from theory and testing to policy. In his paper, Boessenkool, a private policy analyst and commentator, makes the case for a practical change to the current equalization program: removing non-renewable natural resource revenue from the formula used to calculate equalization. In his view, this change would have a number of desirable implications. Most importantly, it would significantly change the incentive for provinces to develop these resources to their full potential. Under the current formula, each additional dollar of such revenue can result in a reduction in equalization of 70 cents or more. In addition, it would allow the federal government to return to a national rather than the current five-province standard because it would be protected from the massive program volatility stemming from price-related fluctuations in Alberta energy revenues.
In his analysis, Boessenkool recognizes that significant winners and losers would be created if such a change were implemented. The clear winner would be Saskatchewan whose equalization revenues are already substantially reduced in recognition of its significant oil, gas and potash revenues. The clear loser would be Quebec which has relatively small non-renewable resource revenues and fewer prospects of such for the future.
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