ECON 318 Lecture 9: Equalization II Beyond mechanics
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Equalization ii - operation: equalization: a little bit of history. Canada"s formal equalization program began as part of the 1957 fiscal arrangements agreements. Thus, canada"s equalization system is not just about transferring monies to the poorer provinces; it is also a program that allows canada"s rich provinces to reap the rewards of their superior tax bases. The program evolved, and sometimes changed quite dramatically between its inception and 1982, which marked a decisive direction for equalization. Natural resource revenues have always played a central role in equalization. The 1982 fiscal arrangements opted for the fps or the five- province standard, where the five provinces comprising the standard were quebec, ontario, manitoba, The clear purpose of the fps was to remove alberta from the equalization standard, but by way of compensation, as it were, the four atlantic. The absence of alberta from the fps would dramatically.