Equalization

Referendum Question 1 states:

Should Section 36(2) of the Constitution Act, 1982 –Parliament and the government of Canada’s commitment to the principle of making equalization payments – be removed from the Constitution?


You may vote “Yes” or “No”

  • A “YES” vote means that you support the removal of Section 36(2) from the Constitution Act, 1982, ending the practice of equalization payments.
  • A “NO” vote means that you support keeping Section 36(2) in the Constitution Act, 1982, continuing the practice of equalization payments.

What is Section 36(2) of the Constitution Act, 1982?

The Constitution Act, 1982 applies to all of Canada. It contains sections such as the Canadian Charter of Rights and Freedoms and outlines the jurisdiction of federal, provincial and territorial governments. Section 36(2) of the Constitution Act, 1982 states:

(2) Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.


What are equalization payments and who receives them?

Section 36(2) of the Constitution Act, 1982, commits the federal government to providing equalization payments. Equalization payments make sure each province can provide a reasonably comparable level of public services to its residents. To determine which provinces receive an equalization payment, the federal government measures each province’s ability to raise tax revenues and compares that ability to other provinces. If a province’s ability to raise tax revenues does not allow it to provide a reasonably comparable level of public service to other provinces, the provincial government will receive an equalization payment from the federal government.


What about the equalization formula?

 The referendum question does not ask about the specific formula used to determine equalization payments. It asks whether Canada’s commitment in the Constitution Act, 1982 to make equalization payments should be removed.

For those interested in learning more about this topic, there are many online and textbook sources that provide information about the equalization formula used in Canada and how it has changed over time.   The federal government publishes a brief explanation of the equalization formula at  https://www.canada.ca/en/department-finance/programs/federal-transfers/equalization.html


What happens following the vote on this question?

The referendum question about equalization is a constitutional question asked under the authority of Section 1 of Alberta’s Referendum Act. As amending the Constitution Act, 1982 is federal jurisdiction, the result of this vote is binding only on the provincial government to pursue the action directed by the majority vote, not on the federal government to amend the Constitution Act, 1982. To remove or amend the Constitution, the federal government and the other provinces and territories would need to enter into discussions about the proposed change.