VANCOUVER, BC, July 14, 2026 /CNW/ – In 15 of the last 25 years (or 60 per cent of the time) at least one province with higher GDP per person received equalization, while one or more provinces with lower GDP per person received none, pointing to ongoing structural problems with the program, according to a new study published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“More often than not, over the past few decades, there have been provinces that have received equalization even though they had a higher living standard than provinces that received none,” said Tegan Hill, co-author of Is Equalization Broken?
The study–a provincial comparison of GDP per person levels and equalization payments–finds that in all but three years from 1981 to 2024 (the most recent year of available data), a province received greater equalization payments per person than one or more other recipient provinces that had a lower GDP per person, or at least one province with higher GDP per person received equalization payments while a province with lower GDP per person did not.
For example, from 2009 to 2018, Ontario received equalization transfers every year–totalling $19 billion over the period–while British Columbia received zero payments, even though B.C. had a lower GDP per person than Ontario in each of those years.
Among recipient provinces, from 2000 to 2007, Newfoundland and Labrador received higher equalization payments per person, even though it had a higher GDP per person than at least one province. In fact, in 2005, Newfoundland had a higher GDP per person than four provinces yet received higher equalization payments per person.
“If equalization worked as intended, there should be a fairly consistent relationship between GDP per person levels–a general measure of living standards–and equalization payments per person, yet there are discrepancies in all but three years of analysis from 1981 and 2024,” said Hill.
“These discrepancies between equalization payments and GDP per person have persisted for decades and rather than being one-off quirks, they point to ongoing structural problems with the formula.”
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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, Montreal, and Halifax and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org
SOURCE The Fraser Institute