EDMONTON — Premier Danielle Smith claims the UCP is focused on ending Canada's equalization payment program, but there needs to be a roadmap to do so, and she says the pathway starts with altering the formula. "That is our stance that we ultimately think every single province should chart a pathway to standing on their own two feet, just like British Columbia has done, and Alberta's done, and Saskatchewan has done, and Newfoundland and Labrador has done,” said Smith during an interview with the Western Standard. "Finding ways to invest in the kinds of businesses and the sectors that will allow for provinces to earn own source revenue is absolutely where every province should go." Smith faced heat after she publicly pitched Prime Minister Mark Carney on Wednesday about altering the federal equalization formula by cutting ties that sync the program's growth with Canada's economic success, and instead transfer funds based on need and then distribute the rest on a per-capita basis. ."I haven't made much headway yet with my fellow premiers on who are the recipient provinces, but I can tell you that the ones who are kind of the net contributors feel as well that we've got to get a bit more fairness into the program," Smith said on Wednesday. The pitch did not resonate with some individuals in Alberta, though, as many noted that in 2021, Albertans voted to end the equalization program, not just make changes to the formula. Smith clarified that her government maintains the ultimate goal of fulfilling the mandate given by Albertans, but that will not happen overnight. "So if that's the objective, 'How do we get there?' and what I was answering was the 'how,'" Smith said. “One of the ways you get there is you stop adding more money to equalization with the growth of the economy. That is such a no-brainer. "As the economy grows, the equalization pool should shrink because you shouldn't need more money as everybody's getting wealthier. It's counterintuitive; doesn't make sense." .The federal government will transfer over $27 billion under the equalization program in the 2026/27 fiscal year, including $13.9 billion to Quebec and $406 million to Ontario. Conversely, Alberta, Saskatchewan, and B.C. will receive zero funds under the program. Smith claims the current equalization formula has led to more than $7 billion in over-equalization over the last five years, which is why she suggested altering it to a needs-based distribution to ensure "equivalent programs and equivalent tax rates." "If we took an approach as a second step, that we would only equalize to a reasonable national average, that would greatly reduce the equalization pot," Smith said. Further, Smith said Canada needs to continue working to build the economy and make a five- or ten-year push encouraging every province to become self-sufficient. "I think that's the method that you would use," Smith said. "But you got to start somewhere, and I think the way we start is we've got to get rid of the thing that is the most obvious thing to change, which is stop growing the program with the growth in the economy and start and begin the pathway of starting to reduce."
