The Newfoundland and Labrador government has abandoned its legal challenge against the federal equalization program, a move being hailed by the Canadian Taxpayers Federation as a win for taxpayers across the country.The province had been seeking larger payments through the equalization system by challenging Ottawa in court. The Canadian Taxpayers Federation participated in the case as an intervener, arguing against expanding the program and representing taxpayers who would ultimately fund any increase in transfers.“This is a win for taxpayers in every part of the country,” said Devin Drover, the CTF's Atlantic director and general counsel.“The Newfoundland and Labrador government was asking the courts to force bigger equalization handouts onto the backs of taxpayers from coast to coast. Walking away from that fight is the right call.”Equalization is a federal transfer program that redistributes tax revenue among provinces. This year, Ottawa is expected to send approximately $25 billion in equalization payments to Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.The program is funded by federal taxpayers, with the CTF noting that British Columbia, Alberta and Saskatchewan are net contributors to the system.Newfoundland and Labrador is projected to receive more than $180 million in equalization payments this year.The province's lawsuit argued it was entitled to larger transfers under the current formula. Had the challenge succeeded, taxpayers across Canada could have faced higher costs to fund increased payments, according to the CTF.“Canada’s Constitution was never designed to let provincial governments sue the federal government for bigger handouts,” said Drover..While welcoming the decision to discontinue the case, the taxpayer advocacy group said broader concerns remain about the long-term cost of the equalization program.“Discontinuing the case is the right outcome, but it doesn’t fix the bigger problem,” said Drover. “Equalization costs taxpayers billions every year and taxpayers can’t afford to keep funding whatever new spending provincial politicians dream up.”The CTF is urging the Newfoundland and Labrador government to focus on economic growth rather than seeking larger federal transfers.“The path forward isn’t suing for bigger cheques, it’s growing the economy through lower taxes, less waste and more accountable government,” said Drover.“That’s how Newfoundland and Labrador stops being a have-not province. Not by going to court for more federal tax dollars.”
