Equalization
Fairness
What it Means to the People of Nova Scotia
March 2011
www.nsef.ca
• A grassroots organization not affiliated
with any political party
• Everyday people dedicated to ending a
grave injustice in Nova Scotia
Federal Equalization
“Parliament and the government of Canada are committed to
the principle of making equalization payments to ensure
that provincial governments have sufficient revenues to
provide reasonably comparable levels of public services at
reasonably comparable levels of taxation.”
―Canada Constitution Act (Section 36.2)
Federal Equalization Transfer to Nova Scotia
2010-2011
$ 1,571 million
Nova Scotia
Public Service Expenditures†
14%
Municipalities
Province
86%
† Historical average
Provincial Distribution
2009-2010
The provincial government distributed less than 1% of the
$1,571,000,000 federal transfer to the 42 communities in Nova Scotia
entitled to Equalization payments.†
†
Note: The provincial government supplemented this amount ($15,050,000) with NSPI’s $17,000,000 Grant in
Lieu of Taxes, to bring its total “equalization” distribution to $32,050,000.
Municipal Indicators †
HRM vs. CBRM
Municipal
Indicator
2.2.1
1.1.3
1.2.2
Indicators - Profile
HRM
2007 Average Household Income ($)
Residential Tax burden
(Average Residential Taxes) ($)
66,339
CBRM
Differential
%
49,665
HRM
16,674 + 33.6%
2007
2009
1,410
1,072
884
1,006
526
66
HRM
+59.6%
+ 6.6%
Average Delivery of Services Per Household
(Expenditure Per Household) ($)
2007
2009
3,740
3,727
2,260
2,568
1,480
1,159
HRM
+65.5%
+45.1%
† Source: Service Nova Scotia and Municipal Relations – Municipal Indicators
$40,000
Yarmouth
Victoria
St. Mary's
Shelburne
Richmond
Queens-Liverpool
Pictou
Lunenburg
Kings
Inverness
Hants West
Hants East
HRM
Guysborough
Digby
Cumberland
Colchester
Clare
Chester
CBRM
Barrington
Argyle
Antigonish
Annapolis Royal
Household Income
Average Household Income
$70,000
$65,000
$60,000
$55,000
$51,871
$50,000
$45,000
Tax per $100 Assessment
CBRM vs. HRM
Residential
Location
Dominion
(Suburban)
Glace Bay
(Urban)
Louisbourg
(Suburban)
New
Waterford
(Urban)
North
Sydney
(Urban)
Sydney
Mines
(Urban)
Sydney
(Urban)
Commercial
CBRM
HRM
Differential
†
Discount
CBRM
HRM
Differential
1.99
1.20
+ 67.0%
-40%
4.31
3.683
+ 17%
-14.5%
2.01
1.30
+ 55.0%
-35%
4.31
3.713
+ 16.1%
-14%
1.94
1.20
+ 62.0%
-38%
4.31
3.683
+ 17%
-14.5%
2.00
1.30
+ 54.0%
-35%
4.31
3.713
+ 16.1%
-14%
2.03
1.30
+ 56.0%
-36%
4.31
3.713
+ 16.1%
-14%
1.91
1.30
+ 47.0%
-31.7%
4.31
3.713
+ 16.1%
-14%
2.19
1.30
+ 69.0%
-40.5%
4.89
3.713
+ 32.7%
-24.6%
Discount
† Discount to CBRM taxpayers if tax rates were equal to those in HRM
†
0.50
Yarmouth
Victoria
St. Mary's
Shelburne
Richmond
Queens-Liverpool
Pictou
Lunenburg
Kings
Inverness
Hants West
Hants East
HRM
Guysborough
Digby
Cumberland
Colchester
Clare
Chester
CBRM
Barrington
Argyle
Antigonish
Annapolis Royal
Tax Rate
Nova Scotia Residential Tax Rates
Municipalities - Rural & Urban Rates
2.20
2.10
2.00
1.90
1.80
1.70
1.60
1.50
1.40
1.30
1.20
Rural
1.10
Urban
1.00
1.01
0.96
0.90
0.80
0.70
0.60
1.0
Yarmouth
Victoria
St. Mary's
Shelburne
Richmond
Queens-Liverpool
Pictou
Lunenburg
Kings
Inverness
Hants West
Hants East
HRM
Guysborough
Digby
Cumberland
Colchester
Clare
Chester
CBRM
Barrington
Argyle
Antigonish
Annapolis Royal
Tax Rate
Nova Scotia Commercial Tax Rates
Municipalities - Rural & Urban Rates
5.4
5.2
5.0
4.8
4.6
4.4
4.2
4.0
3.8
3.6
3.4
3.2
3.0
2.8
Rural
2.6
Urban
2.4
2.2
2.26
2.09
2.0
1.8
1.6
1.4
1.2
$1,000
Yarmouth
Victoria
St. Mary's
Shelburne
Richmond
Queens-Liverpool
Pictou
Lunenburg
Kings
Inverness
Hants West
Hants East
HRM
Guysborough
Digby
Cumberland
Colchester
Clare
Chester
CBRM
Barrington
Argyle
Antigonish
Annapolis Royal
Expenditure per Dwelling
Service Expenditure per Dwelling
Municipalities
$4,200
$4,000
$3,800
$3,600
$3,400
$3,200
$3,000
$2,800
$2,600
$2,400
Service $
$2,200
$2,000
$1,800
$1,925
$1,600
$1,400
$1,200
Residential Tax Savings
(if CBRM tax rates were equal to the rates in HRM)
Location
Sydney
Glace Bay
Annual Tax Savings†
$882
$711
North Sydney
New Waterford
Sydney Mines
Louisbourg
$721
$698
$608
$737
Dominion
CBRM Rural
$787
$221
† For
$100,000 assessment
Provincial Distribution of “Equalization”
to Eligible Municipalities (2010/2011)
Total Entitlement (at 14%)†: $219,940,000
Total Distributed:
$ 30,500,000
Total Diverted:
$189,440,000
† Eligible
municipalities are entitled to all of the remaining 86% ($1.549 B),
as improved, provincially-funded services.
CBRM “Equalization” Grant
2010/2011
Entitlement (@ 14%): $117,029,039
Actually Received:
$ 16,228,901
“Equalization” Received† vs. Entitlement
Cape Breton
Region
CBRM
Received‡
Entitlement
$ 16,228,901
$ 117,029,039
Inverness
459,297
3,312,060
Port
Hawkesbury
271,063
1,954,676
8,535
61,547
Victoria
† Note: To each of the 42 municipalities in Nova Scotia eligible for federal
equalization transfer payments, the provincial government distributed less than
one-seventh of the amount which they were entitled to receive to cover the
public services they are required to provide.
‡
Source – Service Nova Scotia and Municipal Relations Equalization Calculator 2009-10
“Equalization” Received vs. Entitlement
Mainland Nova Scotia
Region
Annapolis
Antigonish
Colchester
Cumberland
Digby
Guysborough (Town)
Hants
Kings
Lunenburg
Pictou
Queens
Shelburne
Yarmouth
†Source
Received†
$ 1,062,642
48,522
1,594,601
2,855,536
857,465
476,169
403,670
224,553
345,812
3,371,610
819,514
746,291
725,819
Entitlement
$ 7,662,871
349,899
11,498,907
20,591,698
6,183,309
3,433,726
2,910,925
1,619,285
2,493,702
24,313,185
5,909,638
5,381,616
5,233,990
– Service Nova Scotia and Municipal Relations Equalization Calculator 2010-11
CBRM Entitlement vs. Amount Required
to Reduce Taxes to HRM level
$120,000,000
$117,029,039
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$18,000,000
$20,000,000
$0
CBRM Entitlement based on 14%
Fairness Grant
Required to reduce taxes to HRM Level
A balance of $99,970,961
would remain for CBRM to
provide improved services.
Federal Equalization
“Parliament and the government of Canada
are committed to the principle of making
equalization payments to ensure that
provincial governments have sufficient
revenues to provide reasonably comparable
levels of public services at reasonably
comparable levels of taxation.”
―Canada Constitution Act (Section 36.2)
The Canadian Charter
of
Rights and Freedoms
...
Equality Rights
§15 (1) Every individual is equal before and
under the Law and has the right to the equal
protection and equal benefit of the law
without discrimination . . . .
Call to Action
Members of the Nova Scotia Legislative
Assembly must require the provincial
government to direct 100% of the
federal equalization transfer to the
purpose specified in the Constitution.
Federal Support to Nova Scotia
2009-10
Major Transfers
•
•
•
Equalization Transfer
Canada Health Transfer
Canada Social Transfer
$ 1,571,000,000
$ 700,000,000
$ 304,000,000
Direct Targeted Support
•
•
•
Labour Market Training Funding
Wait Times Reduction
Transition Adjustment
$
$
$
14,000,000
7,000,000
74,000,000
Trust Funds
•
•
•
•
•
•
Clean Air and Climate Change Trust
Patient Wait Times Guarantee Trust
HPV Immunization Trust
Community Development Trust
Public Transit Capital Trust 2008
Police Officers Recruitment Fund
Total Federal Support
$
14,000,000
$
8,000,000
$
3,000,000
$
12,000,000
$
7,000,000
$
2,000,000
$ 2,837,000,000
Conclusions
• Section 36.2 of the Constitution represents the
supreme law of the land.
• No persons, including legislators, may pick and
choose which laws they will ignore.
• In misappropriating federal Equalization funds, the
Nova Scotia government is violating the Charter
rights of the citizens of the poorest communities in
Canada. This amounts to constructive theft of their
money, through higher taxation, and of public
services they are due but are not being provided.
Questions?
nsef.ca@gmail.com
www.nsef.ca