East vs West in Canada

Part I — Confederation and the Original Economic Bargain (1867–1949)

1867: Confederation

Confederation was sold as a federation of equals:

• Provinces retained jurisdiction over lands and natural resources.
• The federal government handled defense, trade, and currency.
• Regional economies were expected to develop independently but cooperatively.

From the beginning, however, political power was concentrated in Central Canada. Representation by population ensured Ontario and Quebec would dominate federal decision-making, while the Senate—intended as a regional counterweight—was appointed, not elected, and structurally weak.

Western provinces did not yet exist. The system was designed before the West had a voice, but it would later be bound by it.

1870–1905: Western Expansion Without Power

• Manitoba (1870)
• British Columbia (1871)
• Alberta & Saskatchewan (1905)

The West entered Confederation late, with limited negotiating power and fewer institutional protections. Resource control was initially withheld from Alberta and Saskatchewan, only returned in 1930 after decades of protest.

From the start, the West produced raw wealth while Central Canada refined, taxed, and governed it.

Part II — The Birth of Equalization (1957)

Why Equalization Was Created

Equalization was introduced in 1957 by the St-Laurent government.

Its stated purpose:

• Ensure all provinces could provide "reasonably comparable" public services
• Prevent regional poverty from destabilizing the federation

Key characteristics of the original program:

• Temporary in spirit
• Modest in scale
• Not constitutionally entrenched

It was never designed to be permanent.

Early Reality

Even in its early years, equalization flowed primarily eastward, reflecting:

• Lower industrial output in the Maritimes
• Structural unemployment in Quebec
• Centralized federal taxation

Western provinces were still developing and had little political capacity to object.

Part III — Expansion, Entrenchment, and Dependency (1960s–1982)

1960s–1970s: Expansion of Scope

Equalization rapidly expanded:

• More revenue sources included
• More generous formulas adopted
• Fewer incentives for recipient provinces to reform

At the same time:

• Western resource revenues increased
• Federal taxation captured a growing share of that wealth

1982: Constitutional Entrenchment

Equalization was embedded in the Constitution via Section 36.

This was a turning point:

• The program became politically untouchable
• No performance metrics were required
• No sunset clauses existed
• Recipient provinces gained a permanent entitlement, while contributing regions lost leverage

This occurred without meaningful Western consent.

Part IV — The Modern Pattern (1982–2005)

Western Contribution, Eastern Control

By the late 20th century:

• Alberta, Saskatchewan, and BC became net contributors
• Quebec and the Maritimes became structurally dependent

Key contradictions emerged:

• Provinces receiving billions could veto or block national economic projects
• Energy-producing regions faced federal regulation hostile to their industries
• Transfer recipients gained political influence disproportionate to contribution

Quebec's Unique Position

Quebec perfected a dual strategy:

• Extract maximum equalization
• Threaten separation to gain concessions

The Bloc Québécois institutionalized this leverage, shaping federal policy while bearing no responsibility for national cohesion.

Part V — The 21st Century Reality (2005–Present)

Scale of Transfers

Equalization is now measured in tens of billions annually.

Recent patterns show:

• Quebec as the largest recipient by far
• Manitoba as the only Western recipient
• Zero equalization for BC, Alberta, Saskatchewan

Political Lock-In

The East controls:

• A decisive majority of House of Commons seats
• A supermajority of Senate seats

Federal governments win elections by:

• Protecting equalization
• Targeting Western industries
• Appeasing Central Canadian voters

Reform is electorally irrational.

Part VI — East vs West Today: Structural Comparison

This is not a partnership of equals. It is a managed imbalance.

Part VII — Why the System Will Not Self-Correct

The system persists because:

• Beneficiaries control the votes
• Equalization is constitutionally protected
• No accountability mechanisms exist
• The Bloc threatens separation without consequence
• The NDP and Liberals benefit from centralized redistribution

The West pays. The East decides.