Jen Gerson: Eat your referendum ballot. It's delicious
I wouldn't be shocked if the referendum failed simply to spite Jason Kenney.
Alberta premier Jason Kenney (centre) in a gentler, more innocent age.
By: Jen Gerson
Let's start with all the usual but necessary rigmarole about the Alberta referendum on equalization: a "yes" vote won't peel equalization from the constitution; even a resounding victory may not actually force the federal government to sit with the province of Alberta to discuss the matter. I mean, it might: this was Ted Morton's idea, and his argument. That Alberta can force Ottawa and the provinces to engage in some kind of open-hearted exchange by piggybacking on the Quebec Secession Reference is not totally impossible, I guess.
As this Fraser Institute bulletin by Rainer Knopff points out, that reference is specific to questions of, well, secession and probably can't be re-applied willy nilly to any old provincial grievance. However, Knopff goes on to note that the referendum is necessary to create a provincial legislative resolution on the matter, which would allegedly trigger some kind of duty to negotiate — although certainly no duty to come to an agreement that Alberta would find acceptable.Â
Most credible individuals begin to handwave furiously when asked to nail the technical legal details about how we're going to make Ottawa cede a damn thing. Even Morton had to point out that the referendum's greatest power lies in granting Alberta "moral force" on the question.Â
In other words, it's political theatre, and it's poorly timed political theatre at that.Â
Equalization is a perennial complaint in Alberta, and not one totally without merit. Although the province doesn't cut Ottawa some kind of novelty-sized equalization cheque at tax time, we are a comparatively wealthy province, which means the province traditionally sends more money to the federal government through its income and business tax remittances than it receives in rebates and services. There is a sense of injustice, here, which notes that equalization-receiving provinces offer services like cheap daycare, and are now racking up rainy day funds as Alberta falls ever deeper into debt. Meanwhile, we can't seem to get a pipeline built to transport the very product that provides so much of this national bounty and wealth because other provinces oppose them.Â
Of course, those quick to make political currency on this long-standing resentment are never quick to point out another inconvenient fact: Quebec also taxes its residents at a much higher rate than Alberta. We could fix our fiscal problems pretty quickly, if we taxed our own population at the same rate as even British Columbia.Â
Equalization may be unfair, but it's also not Alberta's primary problem. We have the ability, right now, to balance our own books without provoking some kind of pointless legal-political constitutional battle royale, but instead this province would rather bitch about the federal government while demanding more money from it and pretending this is some kind of milestone towards provincial independence.Â
The most powerful argument I could ever muster against the fantasy of Greater Cascadia, Wexit, Alberta firewalls, and Fair Deal Panels is embodied not in the ideas themselves, but rather in the people who actually pine for them. These guys haven't been able to balance the books for almost a generation despite running the richest province in the country. We're calling in the army to help with COVID-19 and have resorted to desperately begging other provinces to take our ICU patients. And this is the moment they picked to run an equalization referendum: when the premier is less popular than syphilis and we find ourselves in the middle of another COVID wave that undermines our credibility and will ensure no one has any obligation to take the outcome of the referendum seriously.Â
What would the people running our provincial government actually do if they were unbridled from Confederation? Would you actually trust these guys to run your pension fund, or to manage an independent police force? Are you nuts?Â
But I digress.Â
What's most interesting about this referendum is that it's barely been an issue at all. I expect support for equalization in principle to be somewhere in the range of 10 per cent in Alberta. Further, there's a reason why this vote was appended to Monday's municipal election. No doubt, it was hoped that something this juicy and base-satiating would drive more conservatives to the mayoral and ward-level polls. In any ordinary moment, a referendum like this should be an easy and resounding success, even if most people did know that it's a weak-armed play for federal attention. This is close to a motherhood and apple pie question on the prairies: "Do you submit that the province of Alberta likes puppies?" "Should the province of Alberta make Corb Lund its human mascot? "Would the province of Alberta like to affirm the ease and convenience of the F-150? Sure, it's a little excessive for daily commuting, but what if you need to make a dump run?"
But now?Â
I wouldn't be shocked if the referendum failed simply to spite Jason Kenney. I'm not even sure such an outcome would be bad for him. A no vote, at least, spares him having to follow through and make something useful of the exercise.
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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.
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.