The Fraser Institute has crunched the numbers on the federal government’s equalization program, and found that in 15 of the last 25 years, at least one province with a higher standard of living received equalization while a province with lower living standards did not.

The previous provincial Liberal government launched a court challenge of the equalization program back in 2024 in an attempt to address flaws within the system, but the current government dropped that process earlier this summer.

Tegan Hill, Director of Alberta Policy with the Fraser Institute, is the co-author of the ‘ Is Equalization Broken?‘ report.

She says equalization is intended to ensure all provincial governments can provide reasonably comparable public services at comparable levels of taxation by redistributing money from more prosperous provinces to less prosperous provinces.

Equalization payments to Newfoundland and Labrador resumed in 2024 for the first time since 2008.

She says equalization is complicated and dependent on a host of complex adjustments.

She cites “the fact that Quebec subsidizes its hydroelectricity instead of charging market rates” as impacting equalization by “billions of dollars a year. We know that the size of equalization grows each year even if discrepancies between richer and poorer provinces are shrinking.” She says, paired with their results, “it’s time to tackle some of these problems, and it’s time to look at this program more broadly and find a solution that has more tangible results in line with the program.”