In today’s Globe and Mail, Murray Campbell says that the federal govt’s policy of redistributing tax revenues to the ‘have-not’ provinces is not working (subscription req’d). That may be, but the evidence he provides isn’t particularly convincing. For example,

…Ontario’s gross domestic product per capita has dropped to 103 per cent of the national average, compared with 112 per cent in 1990.

In other words, its ability to help other provinces is deteriorating.

That’s exactly what we’d expect to see if equalization was an effective policy: as poorer provinces caught up to Ontario, Ontario’s GDP per capita would move closer to the Canadian average.

Of course, I also think the numbers are wrong. When I looked up the provincial GDP data in StatsCan, Ontario GDP per capita was 108% of the Canadian average – and it’s been fluctuating within a point or so around 109% over the past 10-15 years.

So is Campbell right after all? I’ve taken a look at some of the numbers, and I don’t think so. I’ll try to think of a simple way of summarising the data and come back to this later.