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Ottawa, February 28, 2002
2002-020

Equalization Adjustment: Impact on Quebec Suspended for One Year

Finance Minister Paul Martin today announced a one-year suspension of any negative impacts on equalization entitlements resulting from Statistics Canada’s recent change in the methodology it uses to measure the value of residential capital stock.

He said, however, that any provinces that benefit from the change in Statistics Canada’s methodology will not have their entitlements suspended.

Statistics Canada has invited provinces to a formal consultation on the change in methodology.

"Statistics Canada has undertaken to review the substance of the change with the provinces," said Minister Martin. "The independence of Canada’s statistical agency is important to the country, so the final call, of course, must be theirs alone."

At the end of those consultations, Minister Martin has said that if there are any negative impacts from the methodological change they will be spread out over a five-year period.

In addition, Statistics Canada has proposed that, in the future, when methodological changes are being considered that would have an impact on transfers to the provinces, formal consultations will be held before any changes are introduced.

The Department of Finance Canada’s equalization calculations are governed by legislation and regulations, which require that the most recent available data from Statistics Canada be used.

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