Ontario joins calls for equalization overhaul – Rewarding Incompetence Signs Of a Declining Canadian Economy – December 10, 2018,
In Canada, where I live, a lot of these government redistribution schemes have been happening since like forever, it’s one of the reasons why I’ve often written about Switzerland’s Political system. Recently I read about Doug Ford removing Rental Controls from Ontario, I’m all for the abolishment of rental controls, however, Canadian provinces, in my opinion, are better off doing nothing unless they’re going to address the elephant in the room which is the Federal government. As of 2018, Canadians are in a very unique position as far as wars go, Canada is relatively safe, which makes me wonder why is our Federal Government so big in the first place? It’s not like it’s helping us in any way for the Federal Government to have this type of control over provinces.
People often forget about the impacts Federal Crown Corporations have provinces, one of the reasons Canadians as an example don’t travel to other provinces all that much is because there’s little to no incentive for provinces to promote themselves. What is equalization? Do you know how it works? Well, allow me to give you an easy to understand description that I took for Wikipedia.
In Canada, the federal government makes equalization payments to address fiscal disparities amount Canadian provinces based on estimates of provinces’ “fiscal capacity”—their ability to generate tax revenues. A province that does not receive equalization payments is often referred to as a “have province”, while one that does is called a “have not province”. In 2018–19, six provinces will receive $18.958 billion in equalization payments from the federal government.
Equalization payments are one example of what are often collectively referred to in Canada as “transfer payments”, a term used in other jurisdictions to refer to cash payments to individuals (see Canadian transfer payments). The purpose of equalization payments is to enable the “have not” provinces to provide public services which are reasonably comparable to those in other provinces, at similar levels of taxation. The money the provinces receive through equalization can be spent in any way the provincial government desires and often help guarantee a standard level of health care, education, and welfare in all the provinces. The definition of “reasonably comparable levels”, however, has been the subject of considerable debate.
Canada’s territories are not included in the equalization program instead its addresses through the Territorial Formula Financing (TFF) program.
Read it in full by clicking this link: Equalization payments in Canada
Above I highlighted a few words, and I did this purposely so Canadians or anyone else fond of work can grasp how deceptive the wording used is. Firstly, the Federal Government doesn’t have any money, that money actually comes from the Private Sector via the competent working class. The second keyword I’d like to make sure Canadians read and understand is provinces to provide public services did you catch that one?
I’ve often written in length about why it’s extremely important that if a Conservative ever becomes Prime Minister how important it is for him to continuously educate Canadians about why our economy is headed in the wrong direction.
Equalization payments in Canada reward Political Incompetence
Consider reading the Canadian Press article below, there’s a ton of articles writing about this very topic, however, the truth is most Canadians don’t know, nor do they care about this stuff. It’s unfortunate because this is why so many public servants make so much money at the expense of the dwindling private sector.
Ontario joins calls for equalization overhaul – The Canadian Press
I live in Ontario, for a very long time we’ve had incompetent Liberal politicians that often make National headlines, what’s often not talked about however are the incompetent leaders in provinces like Quebec, Manitoba, Nova Scotia, Prince Edward Island, and New Brunswick. Namely Quebec of course, but do you notice how barely anyone talks about Quebec, Manitoba, Nova Scotia, Prince Edward Island, and New Brunswick? Why isn’t Newfoundland making this list? Why isn’t Saskatchewan making this list? Oh, could it be that these provinces are better run than the others and it could it be that this effect occurs because of provincial policies? Notice no talks about Alberta or British Colombia? Why? Quebec is twice the size of Alberta and British Colombia? Could the policies in Quebec be the problem? If it is the problem why is it that the Quebec government is being rewarded for incompetence and what remedy is there in place to make sure this doesn’t happen again?
Now in Switzerland, their Federal Government has limited taxation powers, which is the reason why Switzerland is considered a tax haven, this often flies over socialists heads, so again allow me to repeat that in Switzerland, the federal government has limited taxation powers because most of the tax dollars go to Communal and Cantonal taxes. To put this in Canadian terms most of the tax dollars would go to Canadian Provinces and Municipalities and not to the Federal Government. This is why when you hear about Switzerland you can’t put a face on their who their President or Prime Minister is. The people in Switzerland aren’t stupid enough to give people like Trudeau the number of powers he has, because this would lead to corruption.
This stuff is actually common sense, but a majority of Canadians are brainwashed, Canada as an example based on our peace-loving natures don’t need a big Federal Government, there’s no reason for it, it’s primarily because we’ve been brainwashed that we think that we need one. People assume that Switzerland goes out of its way to be a tax haven, no, no it doesn’t it’s actually quite the opposite, they’re a tax haven by default because their emphasis as society is based on personal responsibility.
How, personal responsibility translates in the political arena is if let’s say I decide to become a municipal politician and I make political promises to me fellow Canadians that I know I can’t keep, let’s say I promise all the people in my municipality Universal Basic Income, let’s say the people hire me, I make good on promise but within a few years my municipality is bankrupt, now instead of me telling my municipality the truth that we’re broke because I promised everybody free, I instead go to the Provincial or Federal government and ask them for a bailout, better still I go to the Provincial or Federal Government and say write me legislation that creates Equalization payments so if my municipality has a financial shortfall I can receive money from the other municipalities that have a surplus. Now, if my wish was granted, in the eyes of my municipality wouldn’t I be received well? Might even the size of my municipality grow, based on the free stuff I’m giving away? Would I not be incentivized to offer the people of my municipality more free stuff?
This is why in Switzerland, the bulk of taxes go to the Provinces and Municipalities, their Federal Governments stay out for the most part which is why by default Switzerland is a tax haven, they’re a tax haven because their Federal Government is small and doesn’t pick or decide winners or losers. In closing, I brought up Doug Ford’s removal of Rental Controls not a good idea because in Canada we still have CMHC, which is a federal crown corporation, taxpayer-funded entity that insures mortgages, not just for individuals but for businesses as well.
In reality, the Federal Government of Canada is competing with the Provinces, so by Doug Ford removing rental controls what he’s actually doing is giving a boast to CMHC, as more entities will be able to build housing not based on demand, but based on what will sell or will rent. What this means is the needs of the poor won’t be addressed, they’ll be ignored as less money, therefore less risk will be needed to build housing in Ontario. Now, if the cushion known as CMHC didn’t exist, housing built would be based on demand, as there wouldn’t be any Federal Government incentive to simply build housing.
The Condo market in Toronto and Vancouver revolve primarily around the demands of foreign investors, Canada’s low loonie and Federally subsidized housing sector created the same incentive that equalization payments create, which is NO BOTTOM! If a child does something wrong and the child is rewarded, how will the child know what’s wrong and what’s right? When the private sector is responsible for building housing, there are real-world consequences if they build cheaply made, small shoe box condos, being that fewer people and real estate speculators would qualify to own this condo, the private sector builders would be more careful on what they decide to build. Just like if Provinces didn’t receive equalization payments they’d be smarter with how they spend the money they get from taxpayers. Furthermore, the politicians of these provinces would wiser not make financial promises they know they can’t keep.
Interesting times ahead.
