At Bound by Gravity, Andrew has taken a "It's the Policy, Stupid" position on discussing the Conservatives. He really thinks that's what Harper ought to be talking about, now that the party has an official policy declaration (link PDF).
On Friday, he wrote about the party's policy on equalization and joins me in noting that Paul Martin is making the current system dysfunctional. If the Conservatives want to address that, then I would have some interest.
Beyond reassuring us that Conservatives, do, indeed, support equalization, most of the policy seems to be a focused on the controversy about natural resources that recently came to a head with Danny Williams demanding a special deal to sustain Newfoundland's equalization levels despite oil revenue growth.
The Conservatives' policy raised questions for me because by excluding non-renewable natural resource revenue from the formula, I began to wonder if they meant to affect not only provinces like Newfoundland, but also Alberta. More than any other place in Canada, Alberta is famous for its oil revenue. So, I did some more research.
How the money gets divided is not that complicated. Here's my summary:
For 2005/06, more than $10-billion is being redistributed, with about 44% of it going to Quebec, 35% of it going to the maritimes, 15% going to the prairies, and 5% going to BC. The money comes from general federal revenues, collected nationwide, but with higher per-capita contributions in Alberta and Ontario.
In principle I support equalization. Where I have been unhappy is in the growing proliferation of side deals and one-off adjustments. Those sorts of deals have made me more sympathetic to McGuinty's fiscal imbalance complaints, not because the complaints are completely logical, but rather because Martin's special deals are delegitimizing the system. It is becoming more about political payola than it is about "enabl[ing] less prosperous provincial governments to provide their residents with public services that are reasonably comparable to those in other provinces, at reasonably comparable levels of taxation."
Back to the Conservative policy... In my view, taking steps to factor out natural resources is an unnecessary idea that is not connected to the program's purpose. However, what really worried me about the Conservatives' policy would seem to not be true. Since the equalization standard is set by the average of Quebec, Ontario, Manitoba, Saskatchewan and British Columbia, I don't think that dropping non-renewable natural resource revenue from the formula will have a dramatic effect beyond what Paul Martin has already granted.
I would caution, however, that the last sentence in the Conservative policy is simply untrue. Equalization is the shifting of money from one pocket to another. It is a zero-sum game, so the Conservative Party cannot ensure that no province will be adversely affected from changes to the equalization formula. It remains to be seen what changes the CPC has in mind.