What Policies Have Been Used to Address Regional Economic Concerns

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The Answer is Numerous governments have used two policies in order to address region economic disparities-equalization payments and regional economic development programs. Equalization payments are annual cash grants to the have-not provinces that are designed to allow them to raise their services to an acceptable national level but can be spent for any purpose. In other words, they are unconditional grants, with no strings attached. Equalization payments are highly contested by both "have" and "have-not" provinces. For instance, Newfoundland and Labrador and Nova Scotia, recently claimed that for every dollar these two provinces took in from offshore petroleum revenue, 70 cents was clawed back by Ottawa by reducing their equalization payments.The second means of reducing regional economic disparities is to establish federal regional economic development programs. The basic thrust of these programs was to designate those parts of the country that needed economic assistance (essentially the whole country except Ontario's Golden Horseshoe-that is, Toronto and westward around the head of Lake Ontario), and then to provide grants to firms that would locate or expand existing operations in such areas. The frequent reorganization of economic-development programs is probably an indication of their recognized deficiencies. Many cases could be documented of corporations receiving money without being in need of it, or taking the money and not living up to their commitments to create jobs.

What Policies Have Been Used to Address Regional Economic Concerns

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