New Brunswick is being squeezed out of its share of the federal equalization pie thanks to the arrival at the table of its much bigger provincial cousin – Ontario.
And a new report says that since New Brunswick cannot count on its portion increasing, the province is on its own when it comes to digging out of the fiscal hole now swallowing it up.
“It’s like we’re a poor family with five kids sitting down for dinner and then our 300-pound first cousin (Ontario) comes over to eat with us,” said David Murrell, an economics professor at the University of New Brunswick and co-author of the equalization report released Wednesday by the Atlantic Institute for Market Studies.
“It means everyone else at the table is going to get less to eat.”
New Brunswick relies heavily on the federal equalization program for a significant share of its revenues. The constitutionally guaranteed program is designed to address fiscal disparities across the country by distributing wealth between the have and have-not provinces.
The balance of distribution changed radically when Ontario became a have-not province in 2009-10. Ontario and Quebec now gobble up about $11 billion annually, or two-thirds of the equalization pot, leaving a smaller share for the remaining have-not provinces.
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