Officials, welcome. Thank you for coming today.
This goes to the heart of what we're talking about in the equalization problem we have in the country, and I say that because it is a problem. Let's look at the way you actually calculate equalization. You calculate it, as you said, with reasonable levels of services at reasonable levels of taxation. When you determine that formula, you go toward the median or the mean, as the case may be, and you determine that effectively one province that might have lower taxation gets a larger economy. This is the thing that happens here. A province with a higher level of taxation doesn't have as much of an economy, and therefore doesn't have as much corporate or personal income tax revenue coming in to pay for their services, whereas the lower-tax province actually has a higher labour force participation and a higher taxation revenue as a result.
To erase that with an equalization system that says, okay, this would be the amount of taxes you pay based on the economy you actually have at this point in time, and you transfer that around, as if you could just do that.... The problem is that if you had a higher level of taxation in those low-tax provinces, you wouldn't have that much tax revenue. You wouldn't have that much economy. You wouldn't have that level of labour participation.
Do you see the circular contradiction you're going through in even determining the formula that way?