Canadian Disputes

June 25, 2007

There has been alot of angry talk recently in the canadian media about how the provinces are angry at the federal government. The issue seems to be about broken promises over equalization payments. The root of the problem is how revenue from shared resources is distributed and we see this issue over and over in all kinds of conflicts all over the world. When you find oil or natural gas or precious metals or diamonds or fish or any other valuable shared resource who is the owner? In canada it seems that the answer is government and the question is which level of government. In venezuela hugo chavez’ power comes from oil revenues. Same problem in russia. The conflict in Aceh, Indonesia started with the discovery of natural gas. One of the problems is that we allow governments to gather revenue from sources other than tax. If oil revenue in venezuela was first distributed as a dividend to the population and the only revenue the government received was from taxing those dividends how different would policy be?