June 19th, 2019

Looking into issue of equalization payments


By Letter to the Editor on March 1, 2019.

With the up-coming provincial election, Albertans have a unique opportunity to help push forward what I think a lot of taxpayers in Alberta are concerned about: federal equalization payments.

The Canadian Taxpayers Federation sent out a message encouraging all Albertans to write/email all the leaders of the political parties in Alberta. The message/request is to have a referendum question on the provincial election ballot asking: Should the Alberta government challenge the federal equalization payments under the Canadian Constitution? I am not suggesting that this is the actual wording of the question, but you get the drift. Below is the verbiage I am using and will be sending it to all the leaders, my MLAs and local contestants in my riding. This referendum would not have to be binding, but if for example 80 per cent said yes, it would be a powerful tool to negotiate a better deal.

To the leaders of Alberta’s political parties:

I would ask you to seriously consider including a referendum question as part of this year’s provincial election ballot. I believe that most Albertans are concerned regarding the present mechanism on how federal equalization payments are calculated and adversely affects Alberta. To that point you should include a question to voters in Alberta: only a suggestion but you get the idea. “Should the Government of Alberta challenge the federal equalization payment program under the Canadian Constitution.” Yes or no. I believe whichever party forms the next government, this would be valuable information for the governing party. The time is right and would save money by including it in the existing process.

Here is the contact information for all the leaders:

– Rachel Notley, premier and leader of the NDP – premier@gov.ab.ca

– Jason Kenney, leader of the UCP – calgary.lougheed@assembly.ab.ca

– Derek Fildebrandt, leader of the Freedom Conservative Party – strathmore.brooks@assembly.ab.ca

– Stephen Mandel, leader of the Alberta Party – info@albertaparty.ca

– David Kahn, leader of Alberta Liberal Party – office@albertaliberal.com

– Marilyn Burns – leader of the Alberta Advantage Party – aapcoms@gmail.com

If you would like to better understand the history of how and why the federal equalization payments came about and, in my humble opinion, how truly unfair, this is to Alberta, check this out: http://www.c2cjournal.ca/author/ted-morton/.

I have already sent out my 12 messages to the appropriate Leaders and MLAs. I hope you do the same. Let’s make a difference for Alberta.

Barrie Orich

Lethbridge

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15 Responses to “Looking into issue of equalization payments”

  1. Fedup Conservative says:

    Gee Barrie how about raising the taxes and royalties back up to the Lougheed levels so we don’t have to worry about equalization payments like we had it under Lougheed and Getty. That’s what those of us who had ties to the oil industry 30 years ago recommend. Instead we watched Klein and Stelmach slash royalties and taxes and put this province in financial ruin. Now Albertans , along with Jason Kenney state we should lower our taxes and don’t increase royalties. How stupid are they, we are sitting on a gold mine, but aren’t smart enough to take advantage of it, instead they want to turn us into a have-not province and watch the conservative’s rich friends get a lot richer.

    I believe what a retired Exxon executive, who had worked in Calgary for Imperial oil, told me in 1997. Albertans are the dumbest people on the planet for letting their Klein Government give away their oil wealth the way he is. Don’t you people realize it’s non-renewable. He went on to say Where else in the modern world would the people be so stupid they would allow their government to take three hospitals away from them, driving out thousands of doctors and nurses and putting people’s lives at risk, then turn around and give them a bigger majority in the next election? My wife and I couldn’t get out of Calgary fast enough, we didn’t fit in we weren’t dumb enough. That’s exactly what Albertans did making us the laughing stock of the foreign oil industry investors and they are still laughing at us as they steal our oil wealth. The lowest royalties in the world we are told, so why wouldn’t they?

  2. George McCrea says:

    Yes maybe you’re right Fed UP but you’re riding the wrong horse. Notley conducted a nine month royalty review at the start of her term and after stopping investment in their tracks, changed nothing. She must be your hero.

    • lonestar says:

      George don’t argue with Fed-up he really knows Alberta’s political history – question not
      this brilliant northern boy’s mastery of “laughing stock” glaring in every single diatribe from the manifesto, except the mind is stuck in a somnolent prologue.

  3. IMO says:

    More correctly, Albertans should be concerned over the continued misinformation being promulgated regarding federal equalization payments.

    “Equalization is a federal transfer payment program that was first introduced in 1957 and is designed to reduce the differences in revenue-generating capacity across Canada’s 10 provinces. By compensating poorer provinces for their relatively weak tax bases or resource endowments, Equalization helps to ensure that Canadians residing in provinces have access to a reasonably similar level of provincial government services at reasonably similar levels of taxation, regardless of which province they call home. Another federal transfer program, Territorial Formula Financing, serves a similar purpose for territorial governments.

    “Equalization is financed entirely from Government of Canada general revenues. The provinces are uninvolved in the transfer except to the extent that they may qualify for Equalization payments; provincial governments do not contribute financially to the Equalization program, and each province’s ability to raise tax revenues is unaffected by the transfer. There are no conditions on the use of Equalization payments or the standards that should be achieved by the Equalization-receiving provinces. Instead, the provinces make decisions on behalf of their residents, and they are accountable to voters for the services they provide.”

    https://lop.parl.ca/sites/PublicWebsite/default/en_CA/ResearchPublications/200820E

    • lonestar says:

      IMO -. Explain where you think the Federal “Government of Canada” finds “general revenues” in the mega billions to sprinkle evenly(?) throughout the provinces and territories?

      • IMO says:

        lonestar: did you bother to read the Government of Canada document? This program is NOT a program whereby every province and territory receives the same amount in funding. It is a program of equalization.

        Long before the advent of this program, Canadians in the maritime provinces generously provided aid to those suffering on the prairies because of the severe drought during the 1930s.

        https://www.producer.com/1994/02/prairies-return-past-generosity/

        This spirit of parsimony in Alberta, as it regards the federal equalization program, is shameful.

        • lonestar says:

          IMO, the answer is yes, and we’re not quite as easy to bamboozle as the average relying on, the message in a 2 minute CBC clip on the six o’clock news or government factory documents delivering indoctrination.

  4. Fedup Conservative says:

    Yes she did George and she proved the Royalty system was a proper one but the conservatives hadn’t been following it. They were not bothering to collect what was legally owed to Albertans filling their rich friends pockets with our money, and she still hasn’t been able to bring it back up to the Lougheed levels due to the mess the oil industry is in at the present time, which is why investment stopped. It’s an international problem. Why is it so hard for you to understand that????

    Maybe you should read “Misplaced Generosity Alberta government set to forgo another $55 billion over next three years.” It’s the reason why the intelligent Albertans voted them out of office, but I realize you’re not capable of understand the truth. Now you’re hell-bent on electing another one of your Liberal friends who is promising to carry on where his hero Liberal Ralph Klein left off destroying this province, so where do you find the gall to call yourself a Conservative, that’s the question my conservative friends would like to know?

  5. Fedup Conservative says:

    IMO is right . While these phony conservatives (Reformers) feed these stupid Albertans the lie that Alberta is broke because we have had to send billions of dollars to Ottawa and Quebec in the form of equalization payments these fools believe it, apparently too dumb to understand what IMO is pointing out is correct.

  6. Fedup Conservative says:

    Apparently lonestar isn’t aware that all Canadians including all the businesses pay Federal Taxes which is where these revenues come from, and why wouldn’t they? Where does he think his old age security and provincial health care payments come from?

  7. lonestar says:

    Duh, thanks for the info Fed-up you are the brain trust, we (“his old age security” – what???) bow to the clairvoyance of the great one from the great city to the north to which he fled when he sensed so long ago he wasn’t “dumb enough” to live in Calgary any longer.

    On a more serious note and for the record.

    If you could read and understand we were responding to IMO’s statement “Equalization is financed entirely from Government of Canada general revenues” to which in turn we asked where IMO thought those revenues come from?

    It’s all public money, no matter how, when or where the despots fleece the sheep, via the carbon tax you champion, personal income tax, corporate income tax, property tax, goods and services tax, provincial sales tax, tobacco tax, permit tax, hotel tax, employment insurance tax, Canada pension tax, royalty tax, air conditioning tax, airport security tax, natural resource tax, business tax, toll taxes, airport departure tax, airport nav tax, duty tax, tax on every tire you buy, environmental tax, tax on every drop of gas,, school tax, license tax, gun permit tax, user fee taxes, tape tax, excise tax, Personal surtax, corporate capital tax, capital gains tax, financial intuitions tax, provincial payroll tax, school book tax, Alcohol tax, liquor markup tax, Customs tax, Importation tax, ATM tax, – the short list.

    Yes, oh mighty one, we have a general understanding of where the monies come from

  8. Fedup Conservative says:

    sorry lonestar I misread your comments and added in what most Klein-lovers have been believing that our Alberta government has been paying out billions to Ottawa and Quebec in equalization payments, which is why we are in financial ruins. Your hero created the lie in Edmonton when he was asked by reporters why we are so broke and Norway and Alaska aren’t.

  9. Montreal13 says:

    Please feel free to correct any misunderstanding but,this is what I think I know about equalization:
    It is to balance the have and the have nots , as regards to provincial budgets and serving of a provinces population.
    For example,apparently Quebec,who has a higher population than Alberta ,has a lower gdp than Alberta and therefore qualifies for equalization payments.
    The gross domestic product of each province and its population is used to determine this have or have not status.

    Are the costs of social programs(just for one example) subtracted from the total gdp of a province? Or ,are they totally a separate issue?
    One thing I do know for sure, is the difference in a tax return as to whether a student (who can for a short time choose to do a tax return in Alberta or Quebec)does their income tax as an Alberta resident or a Quebec resident. The 3 times I have compared tax return results for students , they are far and away better off to do their taxes as a Quebec resident- they get a considerable bigger refund. In other words the Alberta student gives more back to the province than the Quebec student does. Does this and other factors similar to this, have any bearing on this “relatively weak tax bases” that IMO refers to?
    Do the formulas used to determine gdp take into account the different tax rates,deductions and categories of the different provincial tax laws, before it is determined who is technically the weaker tax base?

    • gs172 says:

      Montreal13 close but what the federal government does is figure out the fiscal capacity of a province. What that does is calculate the difference of per capita of provincial revenues using average tax rates against the national average of per capita revenues. All Canadians are taxed the same federally. Receiving equalization is not good. It has been a source of embarrassment for Quebec governments since equalization was started. They DO NOT want to receive equalization payments as that is saying their province is not performing well financially. Quebec also has the highest provincial income taxes in Canada 15% compared to our 10% on the first $128,000 and the spread only goes up from there. It also has PST which we don’t have. Someone has to stop the misinformation that Quebec is using the equalization money for cigarettes and beer, it just isn’t true. Personally I feel fortunate to live in Alberta.

  10. biff says:

    with regard to equalisation payments and quebec… i guess we can sum it up as separate but unequal?