Newfoundland and Labrador launching court case against federal equalization program

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Newfoundland contends the equalization formula is flawed, and that it could have received between $450-million and $1.2-billion in each of the last five years instead of receiving nothing

The Newfoundland and Labrador government revealed Thursday that it plans to take Ottawa to court over the federal equalization program, saying it puts Canada’s easternmost province at a disadvantage.

“Essentially, fairness for all citizens,” the release said. “Currently, this fairness is not achieved for Newfoundland and Labrador.” Newfoundland and Labrador qualified for equalization this year for the first time since 2008, netting a $218-million boost for the 2024-25 fiscal year. However, the provincial government contends that the equalization formula is flawed, and that it could have received between $450 million and $1.2 billion in each of the last five years instead of receiving nothing.

The province also has qualms with the way excess equalization funds are doled out. It said any extra money is given only to provinces already receiving equalization, and it should instead be distributed to all provinces. “From past discussions, I would say we are pretty closely aligned philosophically with the position Newfoundland has had,” Houston told reporters after a cabinet meeting.

 

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