Whenever the issue of equalization comes up in Alberta, we are predictably greeted by a chorus of academics chiding everyone for not understanding how the program works. While most Albertans might not understand every bizarre detail of the program, they understand its principles. That’s why we so vociferously oppose it in overwhelming numbers..We oppose the entire concept of a central government taking our tax dollars and doling them out to provinces based on political goals, rather than actual economic needs. We want the ability to express our opposition to the constitutionally entrenched equalization in no uncertain terms and a referendum is an ideal tool with which to do it..Spending a few months within a referendum campaign on equalization will provide us with a great opportunity to clear up misconceptions on the program. Provinces do not cut cheques directly to the federal government for equalization. We have our funds taken through federal taxes and fees, they are put into general revenue, and then redistributed back to select provinces through a number of transfers and services..Between 2007 and 2018, Quebec sucked $171.3 billion more out of Canada than it had put in, while Alberta put in $240 billion more than it got back from the rest of Canada. Equalization transfers made up $107.5 billion of what Quebec took in. While Alberta never wrote a cheque directly to Quebec, let’s not pretend that Alberta isn’t contributing billions to them through equalization. We can clarify that as the campaign progresses..Critics of tackling equalization point to the lack of a direct province-to-province cheque as evidence this is much ado about nothing..Let’s put this in simpler terms: If a community association collected homeowners fees from everyone in a neighbourhood and gave all of the cash back to just 50% of the households, the remaining 50% would be losing money. It would be little different than Canada’s equalization formula, except those receiving the money often get to block the driveways of those paying, but not receiving..Some tall foreheads are telling us we are wasting our time having a referendum on a constitutional issue. There is a formula for constitutional amendments and it would take much more than an Alberta referendum result to trigger it..In trying to change the constitution through conventional means, Alberta would need to get a super majority of provinces to sign on. Since the majority of provinces enjoy a parasitic benefit from the current equalization setup, it’s unlikely they would ever consent to change it..While equalization as a concept is constitutionally mandated, the formula for the distribution of it is not. Equalization legislation has seen a number of changes over the decades. Usually, they are done so in order to maximize dollars taken from Alberta and maximize those given to Quebec and to the Atlantic provinces. This was done when non-renewable revenues such as those from oil and gas were factored into provincial income, while hydroelectric revenues in Quebec were exempt. This helps Quebec maintain its perpetual state as a “have-not” province despite having enough economic ability to stand on its own two feet. The formula can be changed legislatively to increase or decrease equalization to any degree. If a large majority of Albertans expressed their discontent with the way equalization is right now, perhaps enough federal politicians will be inspired to change the formula into something a little fairer..As with most welfare programs, equalization is purportedly supposed to be a program that lends a hand up, rather than a handout. It is supposed to help a province weather bad economic periods in a temporary manner rather than become a permanent entitlement. Quebec has been a recipient of equalization transfers since the inception of the program in 1957. I think we can safely say after 64 years of trying, the equalization program has failed to help Quebec find its way towards economic independence within Canada. While Alberta has seen many economic ups and downs, it has never managed to qualify for a payment in the program’s modern history. No matter how hard times get for Alberta, it is pretty clear that the equalization formula won’t help them out as it sits. It will be difficult to try and paint equalization as a successful national program during the Alberta referendum campaign..The cost of holding a referendum is negligible in light of the number of dollars being debated. With the entire province holding municipal elections at the same time as the referendum, adding another ballot is hardly an overwhelming task. Direct democracy is valued in Alberta and this example of it will be welcomed by most..In having a referendum on equalization, Alberta will bring the issue to the table for national discussion. Many Canadians seldom even think about equalization, much less dwell on the inequity of it. That’s a luxury one can have when the program hasn’t been robbing them for decades. Perhaps with a national debate on the merits of the program, we will see support for it declining in other regions as people realize just how odious it is. National discourse is a good thing..Whether one opposes or supports equalization, they shouldn’t oppose a referendum being held on it. In letting Albertans debate and vote upon this issue, many myths can be put to bed and we can come closer to a resolution on what has been a divisive issue for decades..I expect opponents to a yes vote on the referendum will try to paint the referendum as being a proxy vote on Alberta independence. This simply isn’t true. The referendum on equalization is a dress rehearsal for a referendum on independence. How the rest of Canada reacts to the outcome of Alberta’s equalization referendum will determine if there is to be another referendum and how Albertans choose to vote in it. The referendum on equalization won’t be a waste of time by any measure..Cory Morgan is the Alberta Political Columnist for the Western Standard and the Host of the Cory Morgan Show
Whenever the issue of equalization comes up in Alberta, we are predictably greeted by a chorus of academics chiding everyone for not understanding how the program works. While most Albertans might not understand every bizarre detail of the program, they understand its principles. That’s why we so vociferously oppose it in overwhelming numbers..We oppose the entire concept of a central government taking our tax dollars and doling them out to provinces based on political goals, rather than actual economic needs. We want the ability to express our opposition to the constitutionally entrenched equalization in no uncertain terms and a referendum is an ideal tool with which to do it..Spending a few months within a referendum campaign on equalization will provide us with a great opportunity to clear up misconceptions on the program. Provinces do not cut cheques directly to the federal government for equalization. We have our funds taken through federal taxes and fees, they are put into general revenue, and then redistributed back to select provinces through a number of transfers and services..Between 2007 and 2018, Quebec sucked $171.3 billion more out of Canada than it had put in, while Alberta put in $240 billion more than it got back from the rest of Canada. Equalization transfers made up $107.5 billion of what Quebec took in. While Alberta never wrote a cheque directly to Quebec, let’s not pretend that Alberta isn’t contributing billions to them through equalization. We can clarify that as the campaign progresses..Critics of tackling equalization point to the lack of a direct province-to-province cheque as evidence this is much ado about nothing..Let’s put this in simpler terms: If a community association collected homeowners fees from everyone in a neighbourhood and gave all of the cash back to just 50% of the households, the remaining 50% would be losing money. It would be little different than Canada’s equalization formula, except those receiving the money often get to block the driveways of those paying, but not receiving..Some tall foreheads are telling us we are wasting our time having a referendum on a constitutional issue. There is a formula for constitutional amendments and it would take much more than an Alberta referendum result to trigger it..In trying to change the constitution through conventional means, Alberta would need to get a super majority of provinces to sign on. Since the majority of provinces enjoy a parasitic benefit from the current equalization setup, it’s unlikely they would ever consent to change it..While equalization as a concept is constitutionally mandated, the formula for the distribution of it is not. Equalization legislation has seen a number of changes over the decades. Usually, they are done so in order to maximize dollars taken from Alberta and maximize those given to Quebec and to the Atlantic provinces. This was done when non-renewable revenues such as those from oil and gas were factored into provincial income, while hydroelectric revenues in Quebec were exempt. This helps Quebec maintain its perpetual state as a “have-not” province despite having enough economic ability to stand on its own two feet. The formula can be changed legislatively to increase or decrease equalization to any degree. If a large majority of Albertans expressed their discontent with the way equalization is right now, perhaps enough federal politicians will be inspired to change the formula into something a little fairer..As with most welfare programs, equalization is purportedly supposed to be a program that lends a hand up, rather than a handout. It is supposed to help a province weather bad economic periods in a temporary manner rather than become a permanent entitlement. Quebec has been a recipient of equalization transfers since the inception of the program in 1957. I think we can safely say after 64 years of trying, the equalization program has failed to help Quebec find its way towards economic independence within Canada. While Alberta has seen many economic ups and downs, it has never managed to qualify for a payment in the program’s modern history. No matter how hard times get for Alberta, it is pretty clear that the equalization formula won’t help them out as it sits. It will be difficult to try and paint equalization as a successful national program during the Alberta referendum campaign..The cost of holding a referendum is negligible in light of the number of dollars being debated. With the entire province holding municipal elections at the same time as the referendum, adding another ballot is hardly an overwhelming task. Direct democracy is valued in Alberta and this example of it will be welcomed by most..In having a referendum on equalization, Alberta will bring the issue to the table for national discussion. Many Canadians seldom even think about equalization, much less dwell on the inequity of it. That’s a luxury one can have when the program hasn’t been robbing them for decades. Perhaps with a national debate on the merits of the program, we will see support for it declining in other regions as people realize just how odious it is. National discourse is a good thing..Whether one opposes or supports equalization, they shouldn’t oppose a referendum being held on it. In letting Albertans debate and vote upon this issue, many myths can be put to bed and we can come closer to a resolution on what has been a divisive issue for decades..I expect opponents to a yes vote on the referendum will try to paint the referendum as being a proxy vote on Alberta independence. This simply isn’t true. The referendum on equalization is a dress rehearsal for a referendum on independence. How the rest of Canada reacts to the outcome of Alberta’s equalization referendum will determine if there is to be another referendum and how Albertans choose to vote in it. The referendum on equalization won’t be a waste of time by any measure..Cory Morgan is the Alberta Political Columnist for the Western Standard and the Host of the Cory Morgan Show
