The Surprising Story of North American Balance of Payments

How do Canada and the US compare?

Before looking at the data, consider this: Prince Edward Island, Canada’s smallest and most transfer-dependent province, receives approximately $9,800 per capita more from Ottawa than it pays in federal taxes.

How many US states receive more per capita than that?

Answer: At least seven, including West Virginia ($12,100), Alaska ($14,800), and New Mexico ($16,200). The American “have-not” states don’t just match Canada’s most dependent province. They far exceed it.

The Data

Net Federal Fiscal Balance Per Capita (2022–2023)

The Pattern

Look at the left side of the chart, the net contributors. Canada and the US are strikingly similar: Alberta (+$3,714), New Jersey (+$2,011), Ontario (+$1,635), Massachusetts (+$967), British Columbia (+$730). The “have” provinces and states cluster together, contributing comparable amounts per capita.

Now look at the right side. This is where the two countries diverge dramatically.

Canada’s most dependent province (Prince Edward Island) receives $9,794 per capita. The US has seven states that exceed this, and New Mexico nearly doubles it at $16,178. America doesn’t just have more “have-not” jurisdictions; the depth of dependency runs far deeper.

Canadian provinces cluster in the middle of the chart. American states spread across the full range and dominate the far right, where federal support is highest.

The Deficit Connection

The chart reveals something else: the bars overwhelmingly point downward. When you sum all the per capita balances:

US states average: -$4,948 per capita

Canadian provinces average: -$3,590 per capita

In both countries, federal expenditures exceed federal receipts. This isn’t just regional redistribution, it’s deficit spending made visible. The gap between what governments collect and what they distribute must be financed by borrowing or monetary expansion.

In the US, only 3 of 48 states are net contributors. In Canada, fully 3 of 10 provinces. Everyone else receives more than they pay, funded by future taxpayers or newly created money.

Why the Difference?

Several factors likely contribute to the US having deeper “have-not” regions:

Higher US income inequality. Greater wealth concentration at the top tends to mean more poverty at the bottom, requiring more federal programs (Medicaid, SNAP, housing assistance) to fill the gap.

Fragmented healthcare. Canada’s single-payer system spreads costs relatively evenly. America’s patchwork of Medicare, Medicaid, employer plans, and the uninsured likely concentrates federal healthcare spending in poorer regions.

Defense geography. Military bases and defense contracts concentrate federal dollars in specific states: New Mexico’s national laboratories, Alaska’s strategic position.

Chronic deficits. When the federal government consistently spends more than it collects, that excess flows disproportionately to lower-income regions, funded by debt, not transfers from richer states.

Reality vs. Perception

If you’re Canadian, this chart might shed light on why Albertans get frustrated about equalization. They’re not imagining things; Alberta genuinely is the top contributor in North America, paying more per capita than any US state. When oil prices swing and provincial revenues tighten, watching billions flow east can understandably rankle. To put it in perspective, if you take Alberta’s annual transfer payments for thirty years, you can move the $26 billion Heritage fund within striking distance of Norway’s $1.7 trillion Sovereign fund, built with similar oil industry revenues.

If you’re American, consider New York. Despite decades of rhetoric about wasteful big-city liberalism, New Yorkers are net contributors to federal coffers. Or take California, often painted as fiscally irresponsible, yet essentially break-even in federal flows, paying roughly what it receives. The “coastal elite states are takers” narrative doesn’t survive contact with federal fiscal data.

This is the value of looking at actual data. Reality and perception can be widely separated by our biases, as most readers may have discovered with the opening quiz. The numbers don’t care about our assumptions. Perhaps now, looking forward to the transformative nature of AI on the economy, subjects like Universal Basic Income (UBI) and Universal Basic Services (UBS) won’t seem quite so disruptive. We have in fact successfully living with versions for a very long time.

This article presents AI-generated Pareto 80:20 research at TheLastProspector.com. It is intended to provide real-time scenario analysis. While the data has been fact-checked, we leave it to the reader to conduct their own detailed diligence.

Methodology notes:

· US data from the Rockefeller Institute of Government’s Balance of Payments analysis (FFY 2023). Canadian data from Finances of the Nation (University of Calgary), annualized from 63-year cumulative figures (1961–2024). Both datasets local currency. The time periods differ deliberately: long-run Canadian averages reveal structural dependencies that persist across economic cycles, while the US single-year data captures the most current snapshot. Both approaches have merit; readers should note that single-year figures can reflect temporary anomalies.

· Sign convention: This article expresses balances as taxes paid minus spending received, so contributors show positive values and recipients show negative values. This is the inverse of Rockefeller’s convention, where positive means net recipient.

· The per-capita averages cited (-$4,948 US, -$3,590 Canada) are simple unweighted averages across jurisdictions, not population-weighted national figures. They illustrate the typical state/province balance rather than aggregate national deficits.

· Virginia and Maryland are excluded from US data. Their favorable balances are driven by federal workforce concentration near Washington, DC rather than state-based economic dependency.

· Both datasets include healthcare transfers (Medicare/Medicaid in US; Canada Health Transfer in Canada), making the comparison methodologically valid.