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A taxpayer three-pack

Author: David Maclean 2006/05/31
Raise the topic of equalization in a room full of people and you're likely greeted with a chorus of yawns and bewildered looks. Experts say there are maybe a dozen people in Canada who fully understand the equalization program.

The purpose of the program is to transfer tax dollars to less well-off provinces so they can provide roughly equivalent services like health, education and highways. The problem comes when trying to decide which provinces are "have" and which are "have not."

Over the years, Saskatchewan has generally been on the receiving end of equalization payments. This province has received billions of tax dollars through the redistribution program.

The equalization program basically operates like a welfare program. If a welfare recipient gets a job, or some other form of income, he or she is generally not entitled to payments, or those payments are reduced based on income.

Back in Saskatchewan, with oil prices at an all-time high, the provincial treasury is over-flowing. Therefore, the province is cut off from equalization welfare. In response, Premier Calvert wants the yardstick that measures who is rich and who is poor moved so that Saskatchewan can once again get welfare payments and benefit from high oil prices.

So far the feds have been all ears, in part because Atlantic Canada already gets a better deal.

But wouldn't it be refreshing to see politicians put their efforts into creating wealth and prosperity for their citizens instead of arguing over who gets what handout Building a better economy would negate the need for equalization in the first place.

Coachman Insurance
Did you know SGI lost almost $10 million dollars in Ontario last year It didn't get a lot of attention in the media (perhaps government-run business losses becoming old-hat) but SGI subsidiary Coachman Insurance bungled a deal resulting in a massive loss for the company.

The story is complicated (as the insurance industry tends to be) but the gist of it is that Coachman entered into agreement with a private company to sell insurance for rental cars. The private company was responsible for claims against the policies it sold on Coachman's behalf. That meant the private company had to have $10 million to cover off any claims. Coachman never bothered to check (even though they were required to) to see if the private company actually had the money.

They didn't. The company went into voluntary receivership leaving SGI with a $10 million loss on their hands.

The provincial auditor says it was all completely avoidable - if SGI had simply done its job.

But the broader question is why are Saskatchewan taxpayers in the Ontario insurance business in the first place

No MLA left behind
It's official. Every single NDP MLA has some sort of position - a secretariat, cabinet post or committee chair - that gives them an automatic raise of at least $12,000 per year. The most recent appointments were Joanne Crawford as Legislative Secretary to study the music industry, Lon Borgerson as a Legislative Secretary to study Organic Farming and Peter Prebble as Legislative Secretary for Renewable Fuels.

The NDP now has 19 cabinet ministers, 4 committee chairs, 3 legislative secretaries, 1 caucus chair, one whip, a speaker and a deputy speaker.

These appointments bring the salary of a back bench MLA from $73,000 to $85,000.


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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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