David MacKinnon, AIMS Senior Fellow in Fairness in Confederation; the Ontario Perspective, does not mince words when he talks about Canada’s system of subsidies, transfers and equalization.

“The system of regional subsidies we have put in place hurts everybody and, by itself, could prevent Canada from competing in the world of the twenty first century,” he explains in this Commentary based on remarks to the Empire Club in Toronto. In Canadian Regional Subsidies: Killing the Golden Goose and Weakening Canada, MacKinnon says Canada’s crazy quilt of regional subsidies is doing serious harm to Ontario as well as the economic potential of the provinces to which these subsidies are aimed.

As a former senior public servant in Nova Scotia and Ontario, he has seen the regional subsidy system from both sides and knows the harm it does to both. MacKinnon provides the Ontario perspective on fairness in confederation, and in this Commentary details what regional subsidies are really doing in recipient provinces.

“The tidal waves of funding from Alberta and Ontario taxpayers to recipient jurisdictions impairs economic growth by forcing labour costs to national levels, well beyond what the local real economy can support, by funding excessive public services and, over the years, by forcing unsubsidized enterprises to compete with subsidized ones in the same sector,” he writes.

MacKinnon, a native of Prince Edward Island, has a BA from Dalhousie, an MBA from York and was awarded a Centennial Fellowship by the Canadian Imperial Bank of Commerce and York University to study at York, Harvard and Oxford Universities as well as the European Institute of Business Studies. He served as Director, Planning and Economics and Executive Director, Development Strategy in the Nova Scotia Department of Economic Development from 1976 to 1981. He later served in several senior capacities in the Ontario Public Service, the Bank of Montreal and as CEO of the Ontario Hospital Association from 1996 to 2003.

To read this Commentary, click here.

To link to AIMS’ extensive research on equalization, click here.