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First, the problems of Atlantic Canada should be decoupled from those in Quebec.

While Quebec receives the largest share of equalization, that share is much smaller in relation to its economy than in Atlantic Canada or Manitoba. Also, Quebec receives much less, in relation to its size, from disproportionate federal employment or generous EI arrangements than the other eastern provinces. Quebec has issues but they are less intractable than in Atlantic Canada.

Second, equalization in Atlantic Canada should come only with conditions.

The first is that independent expenditure reviews along the lines of the Drummond Commission in Ontario should be completed for each Atlantic province. Provincial auditors should certify the independence of these reviews. The second is that delivery of provincial programming in the four Atlantic provinces should be by a common services commission operating under contract with each of them. Four separate public services for four provinces with a total population of two million is extravagant.

Third, the government of Canada needs to reinvent equalization if it is to become a unifying rather than a corrosive force.

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The reform effort should begin with measuring program comparability among provinces. This is the stated goal of equalization and, presumably, other subsidy efforts, but the federal government makes no effort to compare provincial programming across Canada. Equalization should also be changed so that the needs of populations in each province are considered in determining equalization entitlements. Failure to factor demographics, labour market conditions, educational issues and many other matters in determining equalization entitlements means that the program is disconnected from the everyday lives of all Canadians.