Monday, June 26, 2006

GST to fix fiscal imbalance... not a good idea in my humble opinion.

The entire equalization/transfer system has to be scrapped and start again from scratch. Too many side deals and tinkering over the years has left a system that is impossible to understand let alone describe.

McGuinty has been successful in making people think we write a cheque from Ontario that is handed out to other provinces. But the fiscal imbalance is different from equilization and not everyone gets that.

I was away this weekend with a bunch of my friends (using the term really loosely here) but they are generally well-educated, successful non-partisan guys who actually believe we are cutting a cheque from the provincial treasury and sending $23 billion to Ottawa.

It took a lot of arguing and a lot of beer before I was able to explain the whole concept. For the most part, they were not offended by the fiscal imbalance as they understood that this is what the Federal government was for. In any federation, where there is a central government, it would be almost impossible to ensure every province recieved the same amount back as they contributed.


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