I think that equalization is something fundamental for not just our fiscal system but for federalism, because equalization doesn't have any strings attached. The provinces that receive equalization can do what they want with the money they receive, so it doesn't infringe on their autonomy; but, at the same time, it provides provinces with a lower fiscal capacity better services to the residents of their province without having to tax them in a way that is really disproportional to the services they receive. That is why this is principle is embedded in the 1982 Constitution Act, and I read subsection 36(2) in my opening remarks.
What works and what doesn't? The first thing I would say is that, overall, equalization does work in the sense that.... We talk a lot about health care, but take another topic like education. We don't have a department of education in this country, as opposed to many other federal countries like the United States. The federal government plays a very limited role in education, especially free secondary education. Jennifer Wallner from the University of Ottawa published a book about this. Despite no federal norms or massive federal intervention in education policy, we are doing very well in international tests, and the inequalities across the country, if you compare the provinces in terms of education, are not that dramatic, so this is a success story.
As Jennifer Wallner argues in her book, it's partly because of equalization. Yes, there is this horizontal redistribution, horizontal fairness, but, at the same time, it's done in a way that protects provincial autonomy, even the autonomy of poorer provinces. Although we can always revise the formula, as I said earlier, there are always things we can improve about equalization. The very logic of equalization is necessary if we want to combine some level of fairness and solidarity with a high level of decentralization, which is what we have in Canada.