A month before the 2019 Alberta general election, the UCP published a media release saying that if their party was elected, they’d challenge the Bill C-69, including holding a provincial referendum.
Bill C-69 is a federal bill that became law in June 2019. It was a fairly comprehensive bill that enacted the new Impact Assessment Act and Canadian Energy Regulator Act, repealed the Canadian Environmental Assessment Act, 2012 and the National Energy Board Act, and amended the Navigation Protection Act, as well as made minor amendments to several other acts.
Basically, it changed how the government assesses the impact of projects and activities within its borders, by increasing the number of activities that would trigger an impact assessment as well as increasing the number of steps needed to measure the environmental, socio-economic, cultural and health impact of such projects. (Here’s a good run down of the changes to impact assessment.)
In their media release, the UCP called Bill C-69 an “unwarranted intrusion into provincial jurisdiction” and promised to file a constitutional challenge if the bill became law. Less than 3 months after the bill received royal assent, the newly-elected UCP did just that, filing the challenge with the Alberta Court of Appeal. According to the Canadian Taxpayers Federation, the court will begin hearings next month.
The media release also contained a promise that if the bill was passed, the UCP government, if elected, would hold a referendum on 18 October 2021.
In preparation for that referendum, at least one politically-minded group has started campaigning to influence referendum votes.
Last month, the Society of Albertans Against Equalization incorporated with Service Alberta. A week and a half later, they registered the domain fightequalization.ca, which they’ve since set up as a website to gather contact information and raise funds from people who oppose Canada’s equalization programme. The website claims that the society was started by the Canadian Taxpayers Federation.
It has all the makings of a political action committee, but Elections Alberta has yet to add them to their “third party advertisers” list, which doesn’t seem to have been updated since September.
The website is pretty sparse at the moment regarding information about equalization, but I wanted to address some claims the website does make.
Albertans have paid more than $600 billion more to the feds than we have received back since the 1960s.
I’m not sure about the exact number for that period, but the general premise is true that Alberta has paid more to Ottawa than it has received. And it’s not because the current formulation (which Stephen Harper created in 2009) is unfair.
The equalization programme is financed exclusively through federal revenues, such as personal income tax, corporate income tax, and GST. These tax rates are universal: Alberta doesn’t have a 12% GST while Nova Scotia has a 2% GST, for example.
More of these federal revenues are generated in Alberta than in any other one province, despite the tax rates being universal and Alberta not having the largest population. Albertans pay more in absolute dollars than other provinces because the value of the things that are taxed are higher or there are more of them to tax. In other words, Alberta pays more because incomes are higher, corporate revenues are higher, and sales are higher (either in price, quantity, or both).
Keep in mind that the federal revenue generated within Alberta is only about 15% of all federal revenue; nearly 85% of federal revenue comes from outside of Alberta. So while it’s true that Albertans pay more than they receive, the rest of Canada pays more overall. Far more.
Now, why do we get so little back?
Federal expenditures in the provinces fall under 5 main categories:
- Net expenditures on goods and services
- Transfers to persons
- Transfers to provincial governments
- Debt servicing
Debt servicing is the same for all provinces and “other” accounts for only 5% of all federal spending, so let’s just focus on the first 3.
Ottawa has spent less per capita on goods and services in Alberta because it has operated fewer federal institutions per capita in Alberta.
Its transfers to persons have been lower in Alberta because Alberta has had the highest median income in the country (fewer people claiming EI compared to other provinces) and has had the lowest median age (fewer people receiving CPP and OAS payments).
Transfer payments aren’t the lowest in Alberta, but they are below the national average for the provinces. That’s because Alberta has had the highest GDP per capita and the highest incomes, which means they should have the fiscal capacity to generate enough revenue through personal and corporate income taxes, as well as other taxation—such as a sales tax—to cover provincial expenditures without needing to be subsidized through federal equalization payments.
Alberta has received so little from the federal government than other provinces because we’ve had fewer federal services in Alberta, higher incomes, a younger population, and the fiscal capacity to generate sufficient provincial revenue.
Through equalization, Albertans directly subsidize politicians that call our oil “dirty energy” and oppose our pipelines.
This is blatantly false.
Albertans don’t directly subsidize anything. Albertans pay taxes—just like Canadians living in any other province—and that money goes into general federal revenue.
There’s absolutely no proof that GST raised in Alberta (for example) is always allocated to politician salaries, let alone to specific politicians.
There’s only one way for Albertans to get a fair equalization deal: fight for it. The first step is winning the equalization referendum.
A referendum on the equalization programme is meaningless.
The equalization programme (although not the specific formula) is enshrined in the constitution. Alberta can’t change that, no matter how many referenda they hold. Section 38 of the constitution requires any constitution amendment to be authorized by a resolution of the senate, a resolution of the House of Commons, and resolutions from at least two-thirds of the provinces, who collectively make up at least 50% of the country’s population.
Holding a referendum on removing a section of the constitution—which is what the Fair Deal Panel recently recommended for the referendum—would be a waste of money.
This probably won’t be all we see regarding messaging around the equalization referendum, but it’s important that you have all the facts regardless of how you vote in the referendum.
Listening to the lies and misrepresentations of groups like the Canadian Taxpayers Federation won’t inform your vote, and you may be end up voting for something that either you don’t fully understand or can’t be changed.
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