Recent outrage over the extension of the federal equalization formula through 2024 is a bit disingenuous.
Without getting too technical, here’s a brief primer on equalization; Basically, the federal government collects payroll and business taxes from everyone across Canada, at the same rates. This largely funds the operations of our federal government, but a portion of these proceeds are also remitted to Canadian provinces to allow for delivery of services, like healthcare, that fall under provincial jurisdiction. Provinces that have more fiscal capacity from strong economies receive less than those with weaker economies, or less fiscal capacity. Theoretically, the distribution of funds ensures that a similar standard of health care can be received in Halifax, Vancouver, or any point between.
It’s not a perfect system, and it certainly is worth discussing how it may be improved, but it does help move towards the stated goal of reducing regional inequality. Whether you live in perpetual have not province Nova Scotia, or perpetual have province Alberta – when you have a heart attack, it’s reasonable to expect that you will receive a similar standard of access and treatment in a healthcare facility.
As a cabinet minister under Stephen Harper, United Conservative Party leader Jason Kenney had a say when the current federal equalization formula was written and approved. Former Wildrose leader Brian Jean was also an MP in Harper’s government.
That formula gave Ontario several billion dollars more than they had received previously. An argument could be made that that decision took more money out of Alberta taxpayers’ pockets. A real cynic could argue the Harper government was trying to buy votes in Ontario.
In either case, they approved the formula at the federal level. Since Jason Kenney and Brian Jean have come back to Alberta they have railed consistently against the unfairness of it.
Some have made the, not inaccurate, argument that Alberta’s situation has changed since 2009. The last downturn had a significant impact on my immediate family who had to relocate due to hiring freezes and impending phase-out of coal power generation. The last downturn had a significant impact on a number of people.
When we are considering equalization though, we have to consider Alberta’s position in relation to other provinces. Through this lens, Alberta still had the strongest economy of all Canadian provinces, leading in economic growth even during the recession.
While Alberta still didn’t qualify for equalization, the federal government extended the eligibility period for Employment Insurance, reduced the amount of time required to be employed to qualify for EI, and reduced the waiting time to qualify for EI payments. This amounted to nearly $700 million in additional support to Alberta and its workers.
While we’ve had it bad, we’ve still had it better than other provinces. We have no sales tax and maintain some of the lowest payroll taxes and business taxes in the country.
To claim the extension of the equalization formula is an attack on Alberta is both misinformed and hyper-partisan rhetoric; especially when the protesters condoned the deal in 2009. But, attacking Ottawa has never been a losing political play in Alberta.
I will say that it is poor optics for the federal government to have buried the extension in a 580 plus page budget implementation bill. At the same time, with 97 federal Conservative MPs, they and their staff should have been able to handle 5-6 pages each to ensure they knew what was included.
Even high-profile University of Calgary economist Trevor Tombe wrote about his surprise the deal had been extended without any announcement or negotiation, and that he had missed this lone paragraph in the bill. However, all federal Opposition parties should have been able to identify this prior to the bill receiving assent; it is what they are paid to do.
Even more concerning is that the politicians that are now here to save us from Ottawa, were so at the ready to use our tax dollars to buy Ontario votes when it was politically expedient for them in Ottawa.