Canadian governments enacted Keynesian-inspired fiscal stimulus plans in 2009. These plans were to be a temporary response to the global economic recession. The stimulus spending was to be withdrawn after two years and program spending was then to be brought under control and returned to pre-stimulus trends.

Whenever governments are strapped for cash, eyes quickly turn to corporate income taxes as an expedient and presumed painless way to help balance their books. The erroneous thinking behind raising corporate income taxes, however, is that corporations and not people bear their burden. Economic theory and common sense both argue that corporate taxes are actually paid by consumers, workers, and/or investors.

Equalization is a federal transfer program that is explicitly designed to subsidize provinces with weak own-source revenues and to be politically unifying. However, the flip in Ontario’s status from a “have” to a “have-not” province has had, and will continue to have, profound consequences for the country as a whole.