Trevor Tombe, an economist at the University of Calgary, argues that Canada's current equalization payment system, which bases transfers on provincial revenue generation, fuels resentment between wealthier and poorer provinces.

He proposes linking federal equalization payments directly to provincial GDP per capita instead, arguing this would reduce systemic gaming of the formula and eliminate polarizing debates over resource revenues.

The Macdonald-Laurier Institute report suggests a simplified macro-based formula could account for factors like age demographics and regional price differences.

Tombe highlights how Quebec's electricity subsidies artificially inflate its fiscal capacity, enabling higher equalization payments despite opposing oil infrastructure projects.

Alberta and Saskatchewan, which rarely receive equalization, face growing tax burdens under the Harper-era growth escalator that forces annual increases in transfers.The article notes that 5.9% of Alberta's GDP went to federal transfers in 2024, with $13.9 billion allocated to Quebec alone this year.Critics argue the system perpetuates interprovincial tensions while failing to address fiscal fairness.