October 25th, 2020

The big question about Alberta referendums is why?


By Lethbridge Herald Opinon on July 2, 2020.

Doug Firby

Troy Media Columnist

Referendums have been the source of high anxiety and popular uprisings in recent years. Whether they’re a truly democratic way to make vital decisions that best serve the public interest is a matter of great debate.

However, there really should be no debate – nine times out of 10, they’re a bad idea.

Alberta Premier Jason Kenney promised during the 2019 provincial election campaign to hold several referendums – including one to get a mandate to fight with Ottawa over changes to equalization payments and maybe one if his government decides it makes financial sense to abandon the Canada Pension Plan.

Let’s deal with that second question first, because it’s a no-brainer. Albertans may not like Ottawa, but the real question is whether they should trust Alberta to manage a pension plan.

The one word answer: AIMCo. That’s the Alberta Investment Management Corp., the public-sector money manager that infamously lost $2.1 billion this year in an investment strategy linked to market volatility.

If Albertans are worried about having enough money to retire on, then Ottawa’s team looks like a safer bet.

Now let’s go back to the first question: Will holding a referendum on equalization be an effective way to pressure Ottawa to rewrite the equalization formula?

The answer is almost certainly not.

There are a number of factors at play. The first is that 0.00001 per cent of the public actually understands how equalization works. You think that Ottawa takes all of Alberta’s money and gives it to Quebec because we’ve been an oil-rich province?

That’s the simple narrative that’s been advanced, but it’s not even close to the complex factors and mechanisms behind equalization.

For a decent primer on equalization, I recommend you read this article at https://www.canada.ca/en/department-finance/programs/federal-transfers/equalization.html. And for more on the history and context, check this Wiki page https://en.wikipedia.org/wiki/Equalization_payments_in_Canada.

So Kenney’s government will be asking people to vote on something they don’t understand.

And if I ask whether you feel you’re taxed too much, what do you suppose the answer will be?

The vast majority are going to say, “Hell yes!”

But that proves nothing. Because if you’re holding a referendum with a question that points to a predetermined outcome, then the value of the vote is just about zero. A vote that doesn’t ask a thoughtful question won’t give our premier a fresh mandate to pressure anyone. Waste of time.

That’s why then-prime minister Jean Chretien fought so hard to ensure a thoughtful question was put to the people of Quebec during the second sovereignty referendum in 1995. The result was a question that put conditions and context into the discussion. It read: “Do you agree that Quebec should become sovereign, after having made a formal offer to Canada for a new economic and political partnership, within the scope of the bill respecting the future of Quebec and of the agreement signed on June 12, 1995?”

See the difference?

So for a rough equivalent of such a question, Alberta’s referendum question on equalization would have to incorporate a little history, a basic understanding of the program itself and at least at hint at the implications of voting for change.

One of the other implications of voting in such a referendum is whether it could bring about meaningful change. Polls already tell us that the majority of Albertans think we’re getting a raw deal from Ottawa. Do we need a referendum to affirm this?

I would argue the Alberta government has all the information it needs if it’s going to try to appeal to the rest of Canada for a fairer equalization deal.

Another costly vote does nothing to reinforce the government’s mandate. After all, the ruling United Conservative Party government was elected on a platform of taking on Ottawa. It doesn’t need to have that mandate affirmed.

There are two things referendums can do for this government: demonstrate that it will live up to its election promise to hold them and – perhaps an unintended consequence – give frustrated Albertans a chance to voice their grievances to the rest of the nation.

So think of referendums as a form of cathartic relief. At least that will have felt worthwhile.

Veteran political commentator Doug Firby is president of Troy Media Digital Solutions and publisher of Troy Media.

Share this story:

27
4 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
buckwheat

Get a kick out of this. Firby states “infamously” lost 2.1 billion in investment income this year in a market strategy linked to market volatility. First, how much did you ‘infamously lose” due to the world economy basically being shut down over COVID 19. But we won’t count that. I don’t think Firby could have been more biased as he failed to mention that. It’s just another bashing anything Kenny and his government suggest. The market at one time was down 35-40%. What did you lose Firby. If you made money we all want YOUR strategy. Now that the market has somewhat rebounded what is the gain/loss as of today.
Oops, wrong question to ask.

Seth Anthony

I could be missing something, but it seems AIMCo’s overall return is much higher than whatever the feds do with the money.

Here’s AIMCo’s return rates:

https://www.aimco.alberta.ca/AIMCo_AR_2017/investment-performance.html

Here’s the fed’s return rates:

https://www.fraserinstitute.org/sites/default/files/rates-of-return-for-the-canada-pension-plan-exec-summary.pdf

Seth Anthony

The author states:

However, there really should be no debate – nine times out of 10, they’re a bad idea.
—————————————————————————————————-

The author is of course, just making that number up to suit his ideology. Furthermore, since when is letting the people decide their own a fate “a bad idea”? In my book, that’s called freedom, or Direct Democracy (the only true democracy).

Perhaps the author should go tell the Swiss (who practice direct democracy) that what they’re doing is a “bad idea”. He would be laughed at.

Dennis Bremner

Personally, I think Kenney is attempting to placate the separatists among us. By the time he gets to a Referendum, Alberta will be a have not province requiring equalization payments from Ottawa unless of course the whole referendum is a spin to try to get some money back from previous years? Good luck with that 🙂