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Equal Distribution of Income

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Equal Distribution of Income

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  • May 14, 2013
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Normative Decisions of the Canadian Government
Find an article that reflects a normative decision that the Canadian government has made. Identify the economic goal with which the article deals, and discuss your opinion on the policy. Explain the economic reasoning involved in your decision.  ​

http://o.canada.com/2012/10/10/1011-equalization/#.UT0EUYVKJX8

Equal Distribution of Income

The fair distribution of income may be the most value-laden of all economic goals; it is certainly the most controversial. When it comes to dividing the total national output, there can be many interpretations of what makes for a fair division of wealth, as there are people. The issue of income equalization is further complicated by regional differences, as identified in the article. The equalization program, which is funded through general tax revenue collected from all Canadians, transfers dollars to poorer provinces so they can offer programs and services reasonably comparable to those offered in the wealthier provinces, at similar levels of taxation. There is a controversial overhaul of transfer payments under study by federal government. The six “have-not” provinces are splitting $15.4 billion in equalization payments in 2012-13: Quebec ($7.4 billion), Ontario ($3.3 billion), Manitoba ($1.7 billion), New Brunswick ($1.5 billion), Nova Scotia ($1.3 billion) and Prince Edward Island ($337 million). The other four provinces (B.C., Alberta, Saskatchewan and Newfoundland and Labrador) are considered to have greater revenue-generating capacity and don’t currently qualify for equalization. The Conservative government has been examining substantial changes to the $15.4-billion federal equalization program that could dramatically affect transfers sent to provinces and their ability to pay for programs and services.

The concern in this article is the proposal, if implemented, could have multibillion-dollar consequences on hydro-producing provinces such as Quebec, Manitoba,...