The author is correct that the referendum may not force the Federal Government and Provinces to discuss equalization nor solve the issues Alberta has against equalization. The Premier could, as the NDP would, raise taxes on an already damaged economy to add to our small business sector's closures due to the mass exodus of the oil and gas industry and the pandemic. It would go along well with the rising inflation, supply issues, and the clean fuel tax coming in a few months. Or we could put a question on the table for other Provinces and the Federal Government to consider revisiting an outdated formula. The only resources included in the equalization formula are oil and gas. Hence, those unwilling to produce them, regardless of an ample supply to fund their own Provincial coffers, take money from the hard work of Albertan's who do produce theirs. It is no longer "equalization" when Provinces can accumulated a massive trust fund and balanced budgets with the aid of $13 billion dollars a year in "equalization" payments. That is not equalizing, that is profiteering. The profits from electricity (the resource of the future) are not included in equalization payments, only oil and gas are, so Alberta receives less equalization due to our resource industry, higher wages, and less taxation. Equalization is an award for being unproductive and adding high taxation to the people of the Provinces. In the meantime the same Provinces that are aided by equalization, along with out Federal Government, are destroying the resource industry or" phasing" it out. Alberta receives no benefit in equalization partially due to the resources we produce or will have produced in our Province. Equalization therefore must also be phased out or changed as well. So please vote yes or we can not even bring it to the table to discuss the issue. Voting no to spite Kenney, is self destructive. It will not harm him, it harms your fellow Albertan's.

Expand full comment

Kenney's approval ratings are irrelevant as are claims that people do not understand the inner workings of equalization.

What is important:

1) The equalization formula was up for review in 2018, yet the Feds didn't even attempt to consult. This was a snub. The Liberal talking point of the current formula being designed by Harper and Kenney is a red herring. That methodology came into existence in 2009 during the depths of the Financial Crisis when the stack-up of provincial economic fortunes was much different. Yes Harper took the expeditious tact of bullding in an equalization escalator, but that is no excuse to not adapt to current realities. Alberta cannot accept the Federal snub without some sort of protest.

2) Equalization is obviously flawed when it sends more money to Quebec each year even though the divergence between that province's GDP and that of the rest of Canada, and especially to that of Alberta, continues to narrow. Allegedly equalization seeks to enable Provinces to provide reasonably similar service levels across the country. More likely, it is a tool for Liberal re-election.

3) Equalization is but one of many federal transfers. The net balance between taxes colleced within a province and what comes back to a province needs consideration. CPP and EI should be excluded as those are in effect balances held by the Feds on behalf of individuals. OAS and GIS should also be excluded as those correlate with demographics. The impact of Federal employment, contracting and sourcing is more challenging. Those will obviously bias towards Ontario and Quebec due to Ottawa's geography. That being said, only some of that balance should be excluded as Federal spending obviously boost the econonomies of those provinces. Maybe someone like Trevor Tombe could do such an aggregate analysis

4) If 3 above shows Alberta to be a massive net contributor, as I expect it most definately will, the Feds need to recognize that citizens of the province can't be expected to "take one for the team" on every issue. Is it surprising that inviduals would question the value add of the Federal government when they fund the government to greater levels than do other Canadians and in return are expected to accept Federal policies that work counter to the growth and prosperity of the province?

5) Provincial finances are a mess across the country, mostly due to the rising healthcare costs of again populations. Maybe a rebalance is in order where Federal taxes fall significantly so that Provinces can take up the room. Eliminate the middleman. Ottawa could respond by reducing transfers to the Provinces and cleaning up its own house by eliminating large numbers of direct employees and reducing corporate welfare. I look forward to the day of unemployed political consultants, lobbyists and former Federal ADM's wearing signs saying "Will do nothing meaningful for food" on ramps to the Queensway.

Expand full comment

The thing that's always gotten to me about creating a provincial pension plan, police force and tax collection is where the advocates expect we'll actually get the money to pay for all the extra bureaucracy that comes with it, especially after Kenney's recent multi-billion dollar tax cut (and how many jobs did that create again?)

My sister lived in Quebec for a few years. She had to do two sets of paperwork when she filed her taxes, one for her federal set and one for her provincial set. When we file our taxes here in Alberta, we do our federal and provincial ones at the same time. It's about as fun for most people as getting an enema, but you only have to do it once.

Try telling your typical Albertan that they have to fill out two sets of tax forms and see where it gets you.

Expand full comment

It will be interesting to see who Albertans hate more, Kenney or Ottawa/Quebec.

Expand full comment

Thx for the analysis. Here in SK, you never heard a peep about equalization fairness when we were a have-not province (and frankly a lot nicer place to live for all of the problems we had). Now that our fortunes have risen (thank you potash, uranium, coal & even some oil), the petty grievances against central Canada have blossomed.

Expand full comment
Comment removed
Expand full comment

I think you've made my point, those who only wanted a pay cheque left. The rest of us stayed through the bad times and made our communities better. No bubble for me working in restaurants, term jobs, etc.

Expand full comment

Best possible result is that it is made fun of for months, dwindles away in procedural committees designing the details, so that it won't have to be attempted. So, let's get started making fun.

HOW would this work? Performative politics often fails on the rubber/road contact point. As Jen notes, the province isn't taxed, the individuals are. A $36K/year service person pays the same tax in Alberta and PEI. Is the hotel maid in PEI to pay higher taxes on $36K so that the Alberta hotel maid gets a rebate on the taxes she pays on $40K? (Even hotel maids make a little more in Alberta, I'm sure, Jen has noted how nurses do.)

Can you imagine the billboards you could put up in the rest of Canada?

But, of course, Jason doesn't want cheques to individual Albertans, he wants a giant novelty cheque for Jason Kenney, a transfer of federal tax dollars to provincial control. This is super-common in Canada, of course, but the problem is this one would stick out.

Name a figure! How much is Jason asking for? Why not say, $4B. It divides neatly into $1000 for every Albertan, paid for by a loss of $110 to every other Canadian, roughly. Times 2.5 people per Ontario household, just put up billboards asking if they want to chip in $275 so that wealthy Albertans are treated more fairly.

Don't forget to fill the other half of the billboard with how much less provincial tax a typical Ontario household would pay at Alberta rates, with the finish line, 'We have to keep subsidizing their low taxes!'

Jen's supplied all the material, the political ads write themselves. It's an embarrassing proposition, like all the rest of Kenney's schemes. This will go up there with the War Room and the $1.5B pipeline purchase.

Expand full comment

What the opinion makers don't want to realize is that Alberta is economically (and perhaps even culturally) more attached to the US than the rest of Canada. Alberta after all is the sole province that has US levels of start up activity, incomes and wealth.

Alberta competes with Texas and Colorado for business, not with BC or Ontario. We already have significant disadvantages for business being part of Canada, we shouldn't also score in our own net.

Expand full comment

Alberta, more economically/culturally attached to the U.S.?

Alberta, whose conservatives accept socialized medicine as an article of faith and only advocate for privatization as a way to relieve pressure on the public system?

Alberta, where hardly anybody cared about the legalization of gay marriage, or the courts writing gay rights into our human rights codes, and where the Wildrose Alliance's election campaign in 2012 self-destructed after the comment about gays drowning in a lake of fire?

Alberta, where we've had the highest levels of government spending per capita in the country?

Alberta, the only place to create a distinct land base for the Metis?

Alberta, where Stephen Harper didn't suffer any political consequences for refusing to discuss abortion restrictions?

Alberta, the place that became Quebec's biggest oil supplier from 8% in 2012 to 44% in 2017, a supply increase of some five times over?

And when you talk about US levels of incomes and wealth, which parts of the U.S. are you talking about? The ones where income inequality has skyrocketed, and even leftist bugbear Jonathan Kay notes that it's easier to become rich here than it is in the U.S.?

And are we really economically attached to the U.S. when they're becoming a net exporter of fossil fuels, going from one of our biggest customers to one of our biggest competitors?

You should market whatever it is you're smoking, buddy. You'd be a multimillionaire overnight.

Expand full comment

Living like socialists but prefer to pay taxes like free enterprisers.

Expand full comment