The President of an Atlantic Canada economic think tank says it would be unwise for Newfoundland and Labrador to seek a return to equalization.
Marco Navarro-Genie is the President of the Atlantic Institute for Market Studies. He claims the equalization program was in real trouble even before the commodities market collapsed.
In recent years, only four provinces contributed to the program: Newfoundland and Labrador, Alberta and British Columbia while the rest, including Ontario and Quebec, were recipients. He says that means 30 per cent of the population was sustaining the rest of the country, with the lion’s share going to Ontario and Quebec.
Navarro-Genie acknowledges the province’s situation is dire, but equalization is not the answer. He says the first order of business in getting the fiscal situation back on track is reducing the public sector.
He says the province’s public sector is the largest in Canada by 25 per cent. If the public sector was reduced by attrition alone, the province could save $1-billion a year.