Scott Moe wants mo' - but it's not clear to me what he really wants
If you follow Saskatchewan Premier Scott Moe on social media, he will periodically post something like this picture and then demand change. How fair is that?
It is not clear to me what he wants. In fiscal 2022 the SK provincial government raised $5.9 billion from personal income tax and sales tax. Total household income that year was $50 billion so the provincial government raised PIT and HST at a rate of about 12% of household income. In New Brunswick that year, the provincial government raised $4.3 billion from PIT and HST and total household income was $31.2 billion for an effective tax ‘rate’ of 13.7% of household income. This means that NB households already pay 14% more PIT and HST than SK households to their respective provincial governments (federal tax rates are the same of course).
The reason SK can tax their people less (and spend much more per capita) is that the SK government raised $4.6 billion from non-renewable resources revenue that year. If New Brunswick had proportionately sized non-renewable resources revenue not only would it not require a dime of Equalization it could probably even cut tax rates.
So what does Moe want? Cut Equalization to NB? Then the NB government would have to squeeze even more tax revenue out of households even though the Canadian Constitution specifically states:
"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." (Subsection 36(2) of the Constitution Act, 1982).
The capper here, of course, is that SK wouldn’t see any new money because it is all federal tax dollars that go towards Equalization. The feds could set up a special fund just to funnel more money to SK - a kind of anti-Equalization payment - but according to RBC the SK government already spends considerably more per capita on public services than New Brunswick. So that would be a little awkward.
Moe would be on firmer ground if he and other western Premiers insisted that the Equalization receiving provinces do more to develop their own non-renewable resources of which Quebec, NB and NS have quite a bit.