The Legault government wants to keep the equalization formula from which Quebec is the biggest beneficiary, but which is contested in particular by Newfoundland and Labrador and British Columbia.
Newfoundland and Labrador believes that the formula is unfair and has therefore decided to go to court, since it considers that the federal government, which implements the equalization program, is turning a deaf ear to its demands.
Quebec should receive more than $14 billion in equalization in 2023-2024, out of total revenues of $150 billion.
At the summer summit of the Council of the Federation, which ended Wednesday in Halifax, the provinces made their disagreement clear.
“I think we should keep the current formula,” declared François Legault at the final press conference of this body.
He estimates that at least five out of ten provinces want the status quo and that if the provinces tried to agree on a formula, they would not be able to reach an agreement.
In addition to Quebec, Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Manitoba are beneficiaries, while Alberta, British Columbia, Saskatchewan are contributors, as well as Newfoundland and Labrador, for the first time since 2008.
“The system is clearly broken and the federal government has made an explicit decision not to sit down with the provincial premiers to renegotiate the formula every five years,” denounced British Columbia Premier David Eby, alongside his Newfoundland ally Andrew Furey, in a press conference on the sidelines of the Council of the Federation Wednesday morning.
According to Mr. Eby, it is “unreasonable” for taxpayers in his province, who are struggling to make ends meet, to send money to the federal government, which redistributes it to Ontario.
Under the Constitution, equalization ensures that every citizen in the country can benefit from comparable public services, and Ontario is not facing financial difficulties that would prevent it from providing comparable services, Eby argued. He did not rule out the possibility that his province could also file a legal challenge.
Similarly, for Mr. Furey, it is a “question of fairness.” He protested that a small province like his should have to finance much more populous provinces like Quebec and Ontario.
According to him, the calculation should take into account, in particular, the disparity in the costs of providing services in each province.
He also protests against the partial exclusion in the calculation of revenues from natural resources decided by the Harper government, which penalizes provinces that derive significant revenues from oil and gas exploitation.
“In my opinion, those who put this formula in place did not imagine that one day a small province like Newfoundland and Labrador would be a net contributor and that large provinces would be beneficiaries,” said Alberta Premier Danielle Smith at a press conference with all her colleagues at the end of the Council of the Federation.
Alberta would have preferred the provinces to agree on a formula under the auspices of the Council rather than going to court, Mr.me Smith said he fears a possible Supreme Court decision.
For its part, Saskatchewan, which has been both a beneficiary and contributor to the program, wants to propose “alternative options” to the current formula.
Premier Scott Moe has acknowledged that it has “flaws” and his government intends to intervene in the process undertaken by Newfoundland.