Study
| EST. READ TIME 1 MIN.Nova Scotia, New Brunswick rely on equalization while shunning resource development
The equalization program creates disincentives in have-not provinces for economic development that would act to increase own-source revenues. The 2007 equalization reform sought to weaken these disincentives for natural resource development by excluding 50 percent of resource revenue from equalization calculations.
It appears that the incentives are still not strong enough for Nova Scotia and New Brunswick. Nova Scotia recently extended a moratorium on hydraulic fracturing and New Brunswick introduced a similar moratorium. In contrast, Newfoundland & Labrador is reaping benefits from conventional oil production. Pennsylvania, too, has benefitted from tapping into the Marcellus gas discovery.
The potential benefits of overcoming the equalization disincentive and allowing resource development for Nova Scotia and New Brunswick include increased private sector investment, stronger job creation, higher incomes, and additional royalty and tax revenues, which would then allow both governments to reduce their noticeably high tax levels.
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Ben Eisen
Senior Fellow, Fraser Institute
Ben Eisen is a Senior Fellow in Fiscal and Provincial Prosperity Studies and former Director of Provincial Prosperity Studies at theFraser Institute. He holds a BA from the University of Toronto and an MPP from the University of Toronto’s School of Public Policy and Governance. Prior to joining the Fraser Institute Mr. Eisen was the Director of Research and Programmes at the Atlantic Institute for Market Studies in Halifax. He also worked for the Citizens Budget Commission in New York City, and in Winnipeg as the Assistant Research Director for the Frontier Centre for Public Policy. Mr. Eisen has published influential studies on several policy topics, including intergovernmental relations, public finance, and higher education policy. He has been widely quoted in major newspapers including the National Post, Chronicle Herald, Winnipeg Free Press and Calgary Herald.… Read more -
Mark Milke
Mark Milke was a senior fellow of the Fraser Institute between 2010 and 2015. Mr. Milke led the Institute’s workon Alberta-related issues as well as contributing to a broad host of national and regional studies. Mr. Milke is currently an independent analyst and consultant in Calgary.Mr. Milke has authored four books on Canadian politics and policy and dozens of studies on topics such as property rights, public sector pensions, corporate welfare, competition policy, aboriginal matters and taxes. Prior to joining the Fraser Institute, Mr. Milke was the research director for the Frontier Centre for Public Policy and former B.C. and Alberta director with the Canadian Taxpayers’ Federation. His work has been published widely in Canada since 1997 and in addition to the Fraser Institute, his papers have also been published in the United States by the American Enterprise Institute, the Competitive Enterprise Institute and the Heritage Foundation and in Europe by the Brussels-based Centre for European Studies.Mr. Milke’s opinion columns appear regularly in the Calgary Herald and Globe and Mail, as well as in the National Post, Edmonton Journal, Montreal Gazette, Vancouver Sun, Vancouver Province, and Victoria Times Colonist. Mr. Milke has a Master’s degree from the University of Alberta where his M.A. thesis analyzed human rights in East Asia; he also has a Ph.D. in Political Science from the University of Calgary where his doctoral dissertation analyzed the rhetoric of Canadian-American relations. Mr. Milke is president of Civitas, and a past lecturer in Political Philosophy and International Relations at the University of Calgary.… Read more