The province believes it should get refunded billions of dollars of federal taxes collected from Albertans because those dollars were never returned to the provincial government in equal proportion through equalization payments.
Does it then follow that Calgarians, the wealthiest and largest contributors to provincial tax revenues, should also demand a refund whenever more money is spent on, say, Edmonton hospitals than theirs?
Kenney is going to use a fall referendum on equalization to argue, ‘those who pay the most taxes, should get an equivalent return’.
Equalization payments are messy and easily misunderstood.
Former Prime Minister Harper, with Jason Kenney as a senior federal minister, didn’t eliminate equalization payments when they had a majority in Ottawa because they couldn’t. Equalization payments are enshrined in the Constitution. The federal government is mandated to ensure reasonable provincial parity in health, education and social services.
Another important fact, it’s individual Albertans and corporations who finance the federal budget, yes, even equalization payments, not the Alberta government. Over the last 40 years, on average, Albertans have, and still do, make the most money and, in turn, pay the most federal taxes. Similar to Calgarian taxpayers versus the rest of us.
Some will even go to the polls believing the Alberta government writes a big fat cheque every year to the federal government to dole out ‘our money’ to other provinces.
So why is Premier Kenney having a referendum on equalization when it is a constitutionally-mandated federal program, and its Canadian taxpayers that foot the bill, not provincial governments?
Former Governor General David Johnston in his book, “Trust, Twenty Ways to Build a Better Country”, argues party platforms, election contests and elected legislatures, albeit lengthy processes, provide the best filtering to reach wise decisions, whereas referenda undermine the complex interplay of a democracy.
“Referenda are polarizing devices and are used to not only divide regions and peoples, but divide families—often irrevocably”, wrote Johnson. “They usually focus on a single issue and they are invariably emotional affairs—extremely so, which tends to cloud or distort our individual and collective thinking.”
Alberta has major troubles. We’ve spent 40 years subsidizing low tax rates with resource revenues and spending like drunken sailors through each boom, making the bust times unsustainable.
We want the solutions to be easy—privatize the civil service and cut someone else’s job—but unfortunately our hole is too big for ‘bust’ policies of the past. Revenue must also be on the table—our own revenue, not the federal government’s revenue.
Instead of an emotional, nonsensical, non-binding referendum on equalization, we need an Alberta government willing to acknowledge past mistakes made by successive provincial governments.
We all enjoyed the ride—addicted to petroleum dollars, ultra-low taxes and the highest standard of living in Canada.
We wanted for little, but planned poorly for the future. Unfortunately, the future has arrived.
Albertans, including myself, were like millionaire lottery winners. We didn’t invest our windfall wisely, we didn’t plan for our money to run out, we kept spending as our cash was depleting (Alberta has run a deficit budget every year but one since 2008) and now broke, we’re claiming Ottawa stole our money.
Offering up a federal responsibility (equalization) in a provincial referendum won’t bring financial stability to Alberta. It will, however, distract Albertans from the UCP government’s lackluster performance in handling Alberta’s revenue problems and its multi-billion-dollar investment bungles last year.
But the referendum is money in the bank for those who want to rile Albertans into an even higher state of emotional rage against Ottawa and further the advancement of their ultimate goal of separation.