DCHP-3

equalization

DCHP-2 (Oct 2016)
n. usually attributively, Finance, Administration

a grant from the federal government to a province in order to achieve equality among provinces regarding the social services they provide.

Type: 1. Origin Originally (in the 1930s and 1940s), the term referred to agricultural payments, such as payments from the Wheat Board to a particular province (see the 1936 quotation). After World War II, equalization payments were more and more applied to assist have-not provinces in providing services available in richer provinces (have province), see, e.g. the 1975 quotation.
See also COD-2, s.v. "equalization payment", which is marked "Cdn", Gage-1, s.v. "equalization grant", which is described as "in Canada", Gage-3, s.v. "equalization" (2), which is marked "Cdn.", ITP Nelson, s.v. "equalization" (2), which is described as in "Canada".

Quotations

1936
The Government tonight introduced its bill to authorize equalization of payment to Western farmers selling wheat to pools in 1930, and limiting the sum to be used in equalization at $6,600,000.
1956
[...] From June 1, 1956, to June 1 of the taxation year in respect of which the equalization payment is made [...]
1960
Ontario might actually be a have-not province, entitled to a tax equalization grant if, for example, petroleum and natural gas revenues were included in the calculations," Mr. Allan declared.
1963
His proposal to revise the equalization formula, basing it on the per-capita yield of the wealthiest province rather than as at present on the national average, was broached in terms that suggested this might be all the provinces would get at this conference.
1964
The equalization grants were unconditional grants to the poorer provinces based on fiscal need. They were designed to enable the less affluent provinces to provide a moderate level of provincial services without the necessity of carrying an abnormal load of taxation; and computed on a set formula designed to bring the per capita yield of the three "standard taxes" up to the per capita yield of the same standard in the two most wealthy provinces in each year.
1966
Equalization is a relatively new word -- it first appeared in the 1956 agreement -- but the principle it represents goes back to the earliest days of Confederation.
1975
"Equalization grants in Canada have been in use for most of the postwar period to supplement the tax revenues of the poorer provinces," he said. "The funds redistributed by the federal Government have played an extremely important role in helping these provinces maintain public services whose quality was in line with the national average."
1987
Manitoba, with the support of Saskatchewan, wants the lumber windfall taken into account with other provincial revenues when equalization payments are calculated
1998
Other budget goodies under consideration include a token cut to Employment Insurance premiums, a $500-million top-up to federal equalization payments to Canada's poorest provinces, and several hundred million dollars in new money to the national child benefit for low income families, say government sources close to the process.
2004
You see, this year in Canada exactly two provinces -- Alberta and Ontario -- will contribute to the federal equalization payment pool, while the other eight provinces and three territories are on the receiving end.
2015
Quebec has received an equalization grant every year since the program was established in 1957. And since Ontario became a have-not province in 2009, British Columbia, Alberta, Saskatchewan and Newfoundland and Labrador have been the only net contributors to federal equalization funding.

References

  • Gage-1
  • Gage-3
  • ITP Nelson
  • COD-2