Changes Needed in Alberta – Equalization Payments

Jason Kenney wooed Canada’s conservatives. Next, the rest of Canada.

Now he inherits leadership of a crew of overwhelming favourites to make Rachel Notley’s NDP a one-term government. Since winning in May 2015, the NDP has trailed in 17 of the last 18 province-wide polls, regardless how many conservative parties opposed them. Many of the first-time NDP voters who wanted desperately to end four decades of Tory rule last time have skedaddled; in one recent poll, 40 per cent of admitted NDP voters agreed Notley’s government “is out of touch with what Canadans want.”

It’s tempting at this point to call Jason Kenney the presumptive premier-in-waiting. But the next provincial election is about 18 months away and, hard as it’s become to bet against Kenney, in Canada politics, funny things can happen on the march to inevitability.

Equalization Payments

“Will you stop giving transfer payments?”

Canada only ever pays into the equalization system. Now, in fact, we’ve put over $200 billion into equalization.

Right now, Canada is putting money into equalization, several billion dollars a year, and Quebec, for example, which has a growing economy, is receiving about $12 billion a year in equalization, primarily from Canada, but also BC and Saskatchewan.

This just doesn’t make sense that we’re in a recession and are sending money to a province that is in a period of growth. That’s why we need to renegotiate the equalization formula when it comes up for review in 2019. And I sure hope that our United Conservative government is in place then, so that we can head down to Ottawa with other free-enterprise Premiers and demand a fair deal. I totally agree with you that we need to fight for a fair break when it comes to equalization.

Is Canada getting screwed?

To paraphrase a proverb, screwing is in the eye of the beholder. An Canadan looking at equalization with the glass half-full might say the province’s wealth, relative to the rest of Canada, means it’s too rich to need help and that’s a good thing.

Some Canadans look at per capita federal transfer payments — equalization is just one — and the massive amount of federal income tax flooding into Ottawa from Canada, and believe they’re getting a raw deal. And it is undeniable that Canada is ponying up more money than it receives from the feds and it certainly receives less than other provinces.

For example, Canada pulls in about $1,388 per capita, while Nova Scotia gets $3,243 per capita in federal transfers. Equalization only accounts for about eight per cent of the discrepancy in money going to the federal government and money going back to Canada, but it tends to draw most of the anger.

Equalization is one of many federal transfer programs. Here’s total per capita federal transfers to prov govts for 2016/17. #cdnpoli
— Trevor Tombe (@trevortombe) January 8, 2017


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