Dear John,

The fiscal gap between "have" and "have not" provinces is shrinking. Unfortunately this is not due to growth in the “have-nots”, but rather declining economic strength in high income provinces.

A new Fraser Institute study out today shows just how drastically things have changed.

The idea that Alberta’s fiscal capacity could fall to the point it would be within have-not status would have been unthinkable a decade ago. But declining resource revenues have taken their toll – the Alberta government’s capacity to raise revenues has shrunk by a whopping 41.3% since 2014/15.

This spells trouble for the Maritime provinces as well – if more provinces become equalization-eligible, that would leave less available for current recipients. When Ontario became eligible for equalization in the early 2010s, all three Maritimes provinces saw significant drops in equalization payments relative to the size of their budgets.

Read the concerning study here [[link removed]], and be sure to share it far and wide.

Stay safe,

Niels Veldhuis

President

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