The Canadian Taxpayers Federation is intervening in a court fight to stop provincial politicians from taking even bigger equalization payments from the federal government. The CTF has been granted leave to intervene in a Newfoundland and Labrador Supreme Court case regarding the equalization formula.

“Equalization is bad for taxpayers in regions that pay for the program and get nothing in return, but it’s even worse for the provinces that collect the cheques that essentially incentivize bad policies,” said Devin Drover, CTF General Counsel. “Canada’s Constitution was never designed to let provincial governments sue the federal government for bigger equalization handouts.

“Getting leave to intervene in this case is an important win for taxpayers because it ensures their voices will be heard in a case that could cost billions.”

The federal government uses the equalization program to reallocate money to so-called have-not provinces. This year, Ottawa plans to send $25 billion to provincial governments in Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador. That essentially means equalization is paid for by taxpayers in British Columbia, Alberta and Saskatchewan.

The Newfoundland and Labrador government is suing Ottawa, claiming it does not receive enough money under the federal equalization program. Newfoundland and Labrador received more than $110 million in equalization payments this year.

The province is seeking additional transfers to fund public services it argues should be “reasonably comparable” to those in other provinces.

“Taxpayers across the country shouldn’t be forced to bankroll whatever new spending provincial politicians dream up,” said Drover. “Equalization already costs $25 billion a year and taxpayers can’t afford to pay an even higher bill.”

The court has not yet set a trial date in the case.