Cost of equalization to Alberta taxpayers
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Cost of equalization to Alberta taxpayers
The Canadian Taxpayers Federation’s analysis uses government of Canada and government of Alberta data to estimate the cost of equalization to Albertans.
Key findings include:
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Equalization has cost Alberta taxpayers $67 billion since its inception in 1957
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The cost of equalization per Albertan has been $20,200 since 1957
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In 2021, equalization will cost Alberta taxpayers $2.9 billion
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On average, equalization will cost each Alberta $650 this year
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Albertans have received less than 0.02 per cent of all equalization payments. The last equalization payment Albertans received was in 1964-65.
Methodology
To estimate the total cost of equalization each year, the CTF took the percentage of federal government revenues coming from Alberta each year, then multiplied that percentage by the total equalization cost of that year. By multiplying the percentage of federal government revenue taken from Alberta by the total size of equalization, the CTF found the total cost of the equalization scheme to Alberta taxpayers each year. The calculation considers the equalization payments Alberta received from 1957 to 1965.
Data
Federal government revenue taken from Alberta 2007-2019: https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=3610045001
For years 2020 and 2021, the CTF used the 2018 percentage of federal government revenue taken from Alberta, which was the last full pre-pandemic year and is slightly lower than the percentage in 2019.
Federal government revenue taken from Alberta 1981-2006: https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=3610031401
Federal government revenue taken from Alberta 1961 – 1980: https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=3610033201
For years prior to 1961, Alberta received equalization payments.
Equalization data: https://open.canada.ca/data/en/dataset/4eee1558-45b7-4484-9336-e692897d393f