Equalization panel aims to find fairness for Alberta

Alberta taxpayers'contributions toequalization paymentshavecome under fire during the economic downturn, andnow the WildroseParty wants a team of experts to come up with a way to fix the program.

A panel of economists from Alberta, Ontario and Nova Scotia will analyze theequalization program and submit a report to the Alberta Legislature by Oct.15.

"These areAlbertans'hard earned dollars and we have to suffer here in Alberta as a result of what's provided to the rest of Canada," said Opposition leader Brian Jean.

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Equalization was initiallyset up to ensure that Canadians are offered the same standard of living regardless of where they live.

Alberta's contributions to the program have exceeded the amounts transferred back since the 1960s, whereas other provinces have received more than they put in.

"A recent estimate averaged it at $530 per person per year, so more than $2 billion comes from Albertans on that transfer alone every single year," Jean said.

The province hasn't receivedan equalization payment since 1963.

Now Alberta's ability to pay is hamperedbyan economic recession dueto falling oil prices.

But Alberta panelist and economicexpertFrank Atkins says looking into equalization right now is not due to the downturn.

"As a matter of fact, it's when Alberta is really booming and really paying into equalization that you can really see the fundamental flaws in the equalization system."

Waste of time

Ron Kneebone,economist at theUniversity of Calgary'sSchool of Public Policy, says he doesn't know what the Wildrose Party hopes to achieve with the panel.

"I think it's a waste of time quite frankly."

He saysthere's a misconception about how equalization worksthat Alberta doesn't write a chequeand hand it directly to relatively poorer provinces like Quebec or Nova Scotiabecause equalization comes from federally collected taxes and distributed after that.

"We are not paying these extra taxes because we are Albertans, we are paying because we have relatively high incomes,"saidKneebone.

He says sharing between the "have and have-not provinces" has not been a disadvantage to Albertans.

"From my perspective there's nothing necessarily unfair of taking revenue from high income people and giving it to relatively low income people, if you believe in progressive taxation."

Next steps

Frank Atkins says the panel is non-partisan, and aims to find a more fair formula for the whole country. They will be asking for public input.

The panel also includesDavidMacKinnon and Ben Eisen fromOntario, andMarcoNavarro-Gniefrom Nova Scotia.

The current equalizationagreement expires in 2019.