No wonder Alberta’s furious: Kenney calls for referendum on equalization while Quebec receives $13 billion in 2019

In an attempt to cut through the dark pall put over Alberta on election night, Jason Kenney put forward a motion for a public referendum on the continuation of equalization payments for the rest of Canada.

Premier Kenney started his speech by discussing the phone call he had with Prime Minister Trudeau, the morning after the election, on the issues Albertans face.

“I was also clear with the Prime Minister that yesterday we saw the largest democratic mandate in the history of Alberta for a federal party with nearly 70% of Albertans voting for the Conservative Party of Canada…..I told the Prime Minister that behind those numbers lies a profound sense of alienation that must be taken very seriously.”

Pointing out this reality is worthwhile, as far as the Prime Minister and Liberal Party are concerned. Albertans just witnessed an election where not only did the Liberals not win a single seat in Alberta, they showed little to no interest in the province.

Unlike the Conservatives, who made considerable gains across much of Canada, with the exception of Quebec, the Liberals conceded defeat in Alberta and much of the midwest. They are comfortable ignoring the region as a bastion of support it is not.

At a northeast Calgary rally Friday night, Trudeau gave a typical Trudeau-style speech, playing to widely held stereotypes of Conservatives as he resurrected the ghost of Harper. Who, mind you, hasn’t been prime minister since 2015.

As prime minister, Harper did enter negotiations with Quebec, and in 2007 the Conservatives reintroduced the formula-based approach to equalization, rather than a fixed-sum method, which significantly increased payments to Quebec.

This formula system is the reason for nationalized companies like Quebec Hydro keeping prices artificially low so that revenue from royalties don’t increase Quebec’s provincial budget enough to not qualify for equalization payments. Every year Quebec can manipulate its revenues to appear poorer, which is why they can be considered a “have” province while being paid like a “have not” province.

In 2009, Harper’s government partially fixed the system by tying increases in equalization to the growth of the Canadian national economy. Under these reforms, equalization payments couldn’t bubble from the sudden economic downturn in a payment-receiving province.

These decisions may not have been fair for Alberta, but their negative impacts pail in comparison to Trudeau’s arbitrary increases in equalization payments to politically pander to the east.

At the introduction of his motion, Premier Kenney said: “This Alberta government will put on the ballot, in the form of a constitutional referendum, the principal of equalization by seeking the approval of the people of Alberta to delete section 36, equalization, from the Canadian constitution.”

Section 36 commits the Canadian and provincial governments to “providing essential public services of reasonable quality” and “furthering economic development to reduce disparity in opportunities,” to all Canadians.

Section 36 is what is supposedly used to ensure equalization payments from “have” to “have not” provinces, of which Alberta has always contributed. Services of reasonable quality in today’s standards is considered $6,000 per capita in public service spending.

The standards have shifted overtime to where section 35 is now being used to define wants as needs.

PEI is currently receiving the highest per capita transfer payments of the provinces, receiving $3,924 per resident in order to bring the province up to the $6,000 standard.

It is patently ridiculous that all provinces require $6,000 in per capita public service funding to be considered “quality” as PEI, a province the size of a pingpong table, logistically shouldn’t require the same level of public service spending as a larger province like Alberta.

Quebec, despite requesting less per capita top ups to service spending, is the main villain in the discussion of equalization. Other provinces may rely on Alberta’s transfer payments to make up for their poor fiscal management, but Quebec by all measures is in fine shape.

Now that Quebec is a have province you would assume they would start being a benefactor to have-not provinces. Well, you would be wrong.

Ottawa rewarded Quebec for its improved economy and financial situation by increasing the provinces yearly equalization payments by $1.4 billion for 2019. This makes the new yearly total $13.1 billion.

These extra costs are of course mainly being shouldered by Alberta, at a time when the province is experiencing $9 billion dollar deficits and Quebec is collecting budget surpluses.

This strange imbalance of responsibility is no surprise as the rest of Canada has for 58 years expected Alberta to pay up. Since 1961, $611 billion in net transfers have left the province, $476 billion of which went to Quebec alone.

Quebec has for a long time suffered from “welfare syndrome” where it associates its typical share of Alberta’s tax revenues as its birthright; a sort of “where is my money” mindset to funding that it is generously being granted to them.

Bloc Québécois leader Yves-François Blanchet said during one of the English debates,“Oil provinces are very wealthy and have developed those resources with money from all across Canada, including Quebec… Now, we have paid for development of oil in western Canada and you make us pay again with this idea of buying a pipeline over there.”