Fiscal Fairness, How Equalization failed Alberta in its time of need and how to fix it

Toward this end, the first section of the paper focuses on the details of the 2018-19 allocations and the later part delves more deeply into the underlying reasons why Alberta does not qualify for equalization. [...] Surely the lags in the formula are inordinately long, i.e., the formula needs to be altered to capture more of the ongoing fiscal reality across the provinces. [...] Total amount of equalization is now independent of the formula A further contributing factor to the problematic allocation of equalization payments is that the total amount of equalization now has nothing to do with the equalization formula. [...] Established in 1976, the fund had three objectives: “to save for the future, to strengthen and diversify Alberta’s economy, and to improve the quality of life in Alberta.” While the role of the fund was to ensure that energy revenues would benefit current as well as future Albertans, it would arguably make fiscal sense for the province to borrow from the fund when fiscal times are tough and repay. [...] In summary, the following aspects of the current equalization formula require attention by the federal government: • Eliminate inordinately long lags in the system so that it better captures current pro- vincial fiscal realities; • Review the new financing model which sees equalization grow at the rate of GDP growth and creates a zero-sum game among the provinces; • Reform the dramatically underfu.