‘Fair Deal’ strategies

Written by Brenda Schimke

If a referendum on equalization transfers is held in Alberta, it’s a foregone conclusion—we’d scrap it! The Fair Deal committee that criss-crossed the province to seek Albertan’s input reinforced Premier Kenney’s well-articulated beefs.

The point of both is to show our general unhappiness in Confederation and gain leverage. Unfortunately, it is also feeding into growing anger and alienation sentiments.

The problem with a fair deal is ‘fair’ is subjective and each person interprets ‘fair’ differently. What may be considered ‘fair’ to most Albertans may not be considered fair to the majority of Canadians.

Of course, one’s ‘fair’ isn’t always constitutional either. Equalization transfers came into existence in 1957 and were enshrined in our Constitution in 1982.

Other than tinkering with the equalization formula, substantive changes or its elimination requires the high bar of constitutional approval—the Senate, House of Commons and legislative assemblies of at least two-thirds of provinces, with at least 50 per cent of the population of all provinces.

These enshrined equalization transfers reflect a long-held Canadian value. A belief that Canadians living in smaller, weaker provinces, without the same potential for revenue generation or natural resources, will still have the financial ability to provide access to a reasonably similar level of provincial services.

It is a myth that the Alberta Government writes a cheque for equalization payments. No provincial government, including ours, pays a nickel towards equalization to another province. All equalization transfers come from the federal government’s general revenue.

Certainly, today and for some decades, Alberta taxpayers pay the most federal taxes ‘per capita’ because on average, we earn the most money ‘per capita’. In ‘gross’ terms, however, Ontario, British Columbia and Quebec pay an almost equivalent or a greater ‘gross’ amount of federal taxes— simply by having larger populations.

In 2019-20 Newfoundland, Ontario, Saskatchewan, British Columbia and Alberta did not qualify to receive federal funds under the equalization program.

Formula tinkering can be done to equalization transfers as the Stephen Harper government, Kenney among them, did in 2007 and 2008.

These changes increased the total amount going into equalization transfers and ironically gave Quebec a larger share of the pie. The tweaks also stopped Ontario from accessing the fund— having just met qualification requirements.

Premier Kenney is well aware of how the equalization payments work, how they are funded, how they are enshrined in the Constitution and how provincial tax and PST rates factor in.

He also knows of the $75 billion major transfers from the federal government to provincial governments in 2019, $20 billion went to equalization transfers and $55 billion went as health and social transfers.

As well, Kenney as a member of the Harper government ensured that Alberta got a bigger chunk of the health and social transfers during the 2007/08 tweaking exercises.

Kenny passionately espouses his love for Canada and rejects separation so why is he playing fast and free with the facts?

Does he not understand just how angry regular Albertans are over equalization payments?

Every person I’ve asked over the years believes Alberta writes a $20 billion cheque to Ottawa annually for equalization payments, and that most of it ends up in Quebec. A belief with more falsehoods than truths.

There comes a point when feeding anger, not correcting misleading and false statements, and promoting false perspectives turns into an unstoppable inferno. If the Premier’s goal is not separation but leverage, his strategy desperately needs to change.

About the author

Brenda Schimke

Schimke is a Graduate with Distinction from the University of Alberta with a BCom degree. She has lived and worked in Alberta, BC and Ontario.