Saturday, May 21, 2016

Provincial contributions to Canada

Statscan provides some tables that show how many Federal tax dollars are both collected in, and spent in each province.

I've adjusted this data to balance all federal budgets. Otherwise during times of large deficit all provinces would appear to be "taking" while during times of large surplus, all provinces would appear to be "giving". 

I've also some some adjustments to equally share (per dollar spent) expenditures outside Canada, such as military costs for foreign operations. 

Using this I've been able to determine a rough estimate of how much each province gives to the Federal government (in terms of dollars) or takes from the Federal government. 

I've produced not only a dollar figure, in millions, but also a percentage share, showing the share of expenditures VS revenue; so that a 200% share means the province contributes two times what it takes, while a 50% share means it's Federal tax revenue only pay for half of it's Federal tax spending. 

Here is the table:


The dataset I had only went from 2007 to 2014. I decided to use both these figures, as well as 2010, the year we had our largest Federal deficit. 

Unfortunately, we don't have data from after the fall of oil prices, so we'll have to work with what we do have.

Alberta consistently stays over 200%. This means that if Alberta were it's own country, it could maintain all federal services, while cutting federal taxes in half. 

New Brunswick meanwhile stays near 50%, meaning it would need to double federal taxes to cover all federal services. 

It's quite obvious why the Yukon and Nunavut remain Territories; their inability to fund themselves. The Northwest Territories has, at times, beat PEI, but the NWT also has less control over it's resources, and that helps the Federal government with money. It is my (educated) guess that until a territory is able to reliably contribute over 50% of it's federal spending in federal taxes, that no territory will become a Province. 

Interestingly, Ontario remains a net contributor, despite having fallen to have-not status. 


Either way, I've provided this for information's sake, and hope that it will be used as a data source for further discussions.


Edited to add:
Looking at what's happened to the provincial budget in Alberta, my guess is that the current number for Alberta would be closer to 190% or 180%. Wages in Alberta are still far higher than most other places in Canada, and the extra money taken in from Income Taxes explains why Alberta continues to contribute so much. 

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