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Brad Wall's salvo on Saskatchewan carbon tax and transfers off target

Image: DanielPaquet/Wikimedia Commons

In inventing a hypothetical future scheme to "tie transfer payments to a province's position on carbon tax," Saskatchewan Premier Brad Wall's recent letter to Prime Minister Justin Trudeau completely misses the fact that Ottawa is actually short-changing Saskatchewan on transfers for public transit.

Equalization ensures provincial governments a minimum level of fiscal capacity based on their access to different revenue sources. Provinces recently began collecting revenue by pricing carbon emissions. Governments will need to figure out how these revenues, along with all other provincial revenues, fit into equalization.

The federal department of finance examining this question is hardly evidence of the skullduggery insinuated by Wall. Indeed, carbon tax revenues could only count against Saskatchewan's equalization entitlement if our province were receiving equalization.

Since our province does not receive equalization, Wall instead demands an "assurance that there will be no linkage by the federal government between provincial carbon tax policies and infrastructure funding." Such a linkage is entirely a figment of Wall's imagination.

However, the federal government is short-changing Saskatchewan on funding for transit infrastructure. Whereas most federal transfers are allocated according to population, the 2017 federal budget (page 120) allocated $20.1 billion in transit funding based on a formula of 30 per cent population versus 70 per cent ridership.

Because Saskatchewan has 3.2 per cent of Canada's population but only 0.86 per cent of current ridership, our province will receive less than 1.6 per cent of federal transit funding. In other words, Saskatchewan's per-capita share would be about $640 million, but the federal government's formula will only provide about $320 million.

Why is Wall making noise about an equalization formula that does not affect transfers to Saskatchewan while keeping quiet about a transit funding formula that massively short-changes our province? Is he more interested in distracting from his own political problems than in negotiating a better fiscal deal for Saskatchewan?

Erin Weir is MP for Regina-Lewvan.

Image: DanielPaquet/Wikimedia Commons

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