The first problem, which I touched on a little bit in my comments, is that the health transfers and the social transfers are a $75-billion federal program which goes to provinces to cover provincial services. Because Albertans pay a higher proportion of income tax, we end up actually subsidizing that program by $3 billion. Now, that's $3 billion that goes from Alberta taxpayers, through the federal government, to other provincial governments to cover what is a provincial jurisdiction. There's a duplication of equalization, because there's also an equalization program that's meant to redistribute funds to provinces to ensure that they can provide good services. We'd like to remove that duplication.
We also think the unchecked growth on the program...$20 billion now, and it grows with GDP, regardless of how close provinces are getting. The other big point is that despite the fact that fiscal capacity has been shrinking pretty significantly over the last few years, particularly due to the energy downturn, the equalization program keeps growing. In theory we could all be within 1% of each other, but the lower half would get a full $20 billion.
One last thing to think about is that it focuses on equalizing the fiscal capacity of provinces to pay for their services, but it doesn't think about what it costs to deliver those services. We're trying to find a way to make sure everybody can deliver relatively equal services. It doesn't make any sense to ignore that it might only cost 85% as much to run a hospital or to run a service in a certain province compared with, say, Alberta or Toronto or Vancouver. We really need to think about making sure that we reflect the cost to deliver those services.