There is a real problem with Smith's understanding of Equalization. Albertans do not contribute to Equalization. Neither do British Columbians nor Manitobans. Equalization comes from federal tax revenue. The federal government does not tax Albertans, British Columbians or Quebeckers. It taxes Canadians. And a Canadian in Charlottetown earning $200K per year contributes just as much to Equalization as a Canadian in Calgary earning the same amount. How much you contribute to equalization has nothing to do with where you live. It only matters if think your province of residence is more important than your citizenship. Every liberal democratic state in the world practices some form of redistribution of monies to ensure relatively equitable access to services. As a federal state where most of the social safety net and social programming rests with the provinces Canada's form of redistribution sends those funds to those provinces who have less capacity to self-fund those services.
If Alberta has a problem funding its social programming it needs to look at its own available revenue raising capacity rather than trying to claw back federal tax dollars to which it has no right.
For someone who continually harps about the federal government 'staying in its lane' Premier Smith seems to have no compunction about telling the federal government how to run its programming. Equalization is a federal program redistributing federal tax dollars and Premier Smith should recognize that her attempts to characterize this as some excess tax on Albertans given to spendthrift Quebeckers is straying far out of her lane.
That’s not what she said Tom. “Why should Saskatchewan, a smaller province than Manitoba, be sending money to the center so it can be spent in Manitoba? That doesn’t make any sense. Why should BC and Alberta be in the same position, where we’re subsidizing Quebec in some years, and Ontario in some years? And why should Newfoundland and Labrador be in a position where they’re subsidizing their much larger neighbors in the Atlantic provinces? I think it’s an important conversation that we’re having about why we need to get back to the principle of equal per capita transfers…”. What she is arguing against is what you consider axiomatic that “every liberal democratic state in the world” must have some portion subsidize some other portion, at a national level, and replacing it with a population proportion transfer.
Read what I wrote. Saskatchewan does not send money to Ottawa to give to Manitoba. That is a fundamental misunderstanding of how Equalization works. It is a redistribution from wealth(ier) Canadians to less wealthy Canadians so we can all enjoy reasonably equitable levels of public services. The provinces do not write cheques. I contribute to equalization (as a pretty well-off Sask resident) via my federal taxes -- taxes I owe as a Canadian not as a Sask resident. An equally well off resident of PEI contributes just as much as I do to Equalization.
Tom, most people understand how equalization works but if one contributes and one receives it is the same as writing a cheque. What is unfair is that most of Alberta's contribution is derived from a finite resource while the so called more environmentally friendly and sustainable Quebec Hydro is excluded. I am sure the rules will be rejigged when the oil runs out so Quebec does not help Alberta.
Actually I don't think "most" people understand how it works. I hear too often how AB pays MB or QC $X in Equalization. If they understood how it works then that comment wouldn't be so common (and Premiers wouldn't exploit that misunderstanding to score political points).
But leave that aside, you are right that the formula for equalization is completely f*ck'd. On that you won't get an argument for me.
However, the UofC economist Trevor Tombe built a model on his website that allows one to adjust all the things that go into the equalization formula (renewable and non-renewable resources, tax rates, GDP, etc.). No matter what dial you twiddle in adjusting the formula, AB (in its current state) won't receive equalization because it will still have way more wealthy residents per capita than any other part of the country.
In my view there should be some kind of independent body that sets the formula so as to not allow it to be played with by politicians seeking political gain. (Incidentally the last major fiddle of the formula was done by a Prime Minister whose seat was in Calgary but who wanted more seats in QC.)
This is a silly argument. The federal government is the intermediary and the net is the same as direct transfer from AB taxpayers to those of have not provinces. Yes someone earning $200K pays the same in federal taxes regardless of whether they live in Clagey or Charlottetown. The difference is that the Federal government sends more money back to the PEI government per capita than it does to the AB government. Again, the balance is what matters, not the transactions that net out to the balance.
If it is silly then why do so many feel this way? Alberta is a net contributor to Canada and it's not even close. I think it is the defining hot spot for Canadian federalism.
Canada wants to be a "Green Superpower" at the same time as being "Resource Superpower" in its bank account and national reputation. Without Alberta’s dirty oil money, the Canadian social safety net would effectively collapse.
Meantime Ottawa tells Alberta they hate the dirty oil, they happily let it bankroll Canada.
There are a lot of arguments out there, to stir hatred of other Canadians. Alberta is a net contributor, Yes. However Ontario and Quebec and all other provinces also contribute to the wealth of our Country. Either the Nation is supreme or the provinces are. A choice has to be made. I believe that our collective effort bankrolls our social programs. Not just one element of it. The big picture is accurate.
The problem is that the concept of equalization creates a fiscal imbalance between provinces and the federal government. There is a net outflow of money (collected by the feds) from the "have" provinces, which is then distributed to the "have nots". What happens is that federal services are underfunded in some parts of the country, or social service have to be funded by the province in one part of Canada, where in another part, they are subsidized by the feds. I fail to see why one government has the right to tell another government on how they should raise revenue. Under Premier Legault, the province of Quebec was running surpluses. Should that be taken into account when determining equalization? I recall when Mike Harris was the premier in Ontario, he introduced tax cuts. The federal government under Prime Minister Chretien said they would not increase any transfers to Ontario if the Premier was cutting taxes. Equalization, IMHO, was and is primarily political.
That imbalance is baked into the Canadian constitution. The feds have greater means to raise revenue than do provinces. But provinces have greater expenditure commitments when it comes to human services (health, social welfare and education).
Those human services are federally subsidized in ALL provinces. Every province receives a per capita transfer for health care and social services. Those transfers are nominally targeted (you're supposed to spend the Canadian Health Transfer on health care) and loosely conditional (you're supposed to abide by the terms of the Canada Health Act in spending you CHT dollars). In reality all the money goes into General Revenues and it is impossible to determine if every Canada Social Transfer dollar went to social services.
Those transfer exist to offset the fiscal imbalance that is built into the federation.
And a province could use those transfers as a means to reduce their own contributions to service spending. In other words if the feds raise the Health Transfer by 10% you could reduce the amount you allocate to health care from your provincial budget to keep health spending constant. That's politically difficult for a provincial govt, though, because spending on health care is popular with voters.
The Equalization Program is different in that it is an unconditional transfer to the recipient province. And it is calculated by a formula that has been consistently manipulated by the federal government for political purposes, which is something that should be changed. In the end, though, provinces can spend Equalization dollars on anything they want.
And the federal government provides a lot of money to post-secondary education (research funds, funded chairs at universities, etc.), but that money goes directly to the universities and colleges and does not flow through provincial coffers.
There is another way to do all of this. The feds could transfer tax points (and not dollars) to the provinces. In other words, reduce federal taxes and allow provinces to occupy that tax room. Your overall tax bill wouldn't go up, you would just pay more to the province and less to the feds basically.
This is a popular position with bigger provinces like ON and QC with bigger and more diverse economies. It is much less popular with smaller provinces like NS, PEI and NB. The tax point transfer is not something I would support, but it is a perfectly legitimate alternative to the current way the various transfers work. And it wouldn't change Equalization necessarily because that is mandated by the Constitution.
The greater revenue generation potential of the Federal government is a choice. Sure the Feds have access to revenue sources like tarrifs unavailable to the Provinces, but the bulk of their revenue comes from income taxes. It would be easy to, for example knock 5% off each federal tax bracket, and the Provinces takes up the room.
Our Constitution was written by the creators of Canada, NOT the Federal Government. Our Constitution works for all Canadians. Some politicians may argue it does not, however I am weary of politicians and their thirst for power over the good of all.
There's a lot of hyperbole in this thread but I have major problems with this system and I'll do my best to articulate them:
1) The HoC allocates a strong majority of seats to the two largest provinces, effectively giving them outsized control of the federal political agenda.
2) Instead of a “Triple E” Senate, like in the US and Australia, which gives more weight to individual states, the PM appoints partisans as senators (I don't buy Trudeau’s “independent senator” shell game).
3) This, with political power centralized with Laurentian Elites, both of the largest provinces as net recipients of equalization, there is little incentive for transparency.
4) After the 2014 oil price crash, Alberta still don't receive equalization. Why?
5) Have not provinces are disincetivized from improving their economies. For instance, Legault claimed he want Quebec to be economically self-sufficient, yet the equalization system disincetivized this effort and it didn't happen. I've read conspiracy theories claiming this is a tactic to prevent Quebec separation. Who knows, but it's an interesting way to look at it.
6) Talented Canadians who would have moved to more prosperous provinces to contribute talent to stronger more productive economies are disincetivized from doing so, effectively creating an opportunity cost for those provinces.
1) In a system based on one person, one vote, provinces with large populations are going to have more seats. It is called “democracy”. They don’t have an “outsized” proportion of the seats in the HoC, they have the proportion of seats that is justified by the size of their population.
2) Some of the biggest opponents of a Triple E senate are provincial premiers. If you heighten the power of the Senate as a form of intrastate federalism, then you likely lessen the power of the premiers in the arena of interstate federalism — look at the US, who do you think exercises more power in the system, the governor of NDakota or a Senator from NDakota. And do you really think that PEI with 150K people should have the same number of Senate seats as AB or BC? There’s a lot wrong with the Senate and it needs massive reform … but a Triple E model is not the right answer
4) Even if you remove oil and gas revenue from the formula and even if you add revenue from renewables into the formula, AB still wouldn’t qualify for equalization (cf the work of UofC economist Trevor Tombe) under the current formula implemented by Stephen Harper. The formula is f*ck’d, there’s no argument there, but it could be easily fixed.
I do, though, wonder why Albertans and British Columbians are so eager to get equalization payments. Being a recipient of equalization means your economy is weak and you can’t support the programming that other Canadians have. When he first took office, Brad Wall gave a speech to the Canadian Club in which he said he couldn’t wait to grow the Sask economy so that it wouldn’t need equalization payments anymore and that it could finally contribute to equalization. That was his goal, to grow his economy and for his province to be wealthy enough that its residents could be net contributors to the federation rather than recipients of aid. And that’s what he did. Of course, now his successor is complaining that the system is unfair. I’m not a Brad Wall fan, but I always admired that sentiment — I don’t want my province to be a recipient of social welfare from the federal government, but I do want to contribute to the social welfare of the rest of the country.
It is also the case that the provinces that are long time recipients of social welfare tend (with the exception of Quebec) to be more likely to acquiesce to federal intrusions into their jurisdiction. Just look at Atlantic Canada — they are highly dependent on federal transfers and in intergovernmental negotiations they are almost always the first to break ranks with the other provinces to appease Ottawa. We saw this with the most recent round of health care spending agreements — they were the first out of the gate to agree to Ottawa’s demands. Receiving those transfers come at a cost.
5/6) Yes, there are some disincentives to equalization and it probably does impact labour mobility. But that is also by design. Without the transfers that allow comparable services and comparable taxation regimes, they would lose a good many of the talented people they need to do what you suggest — diversify and strengthen their economy. If you remove equalization then either services decline or taxes go up significantly. That will drive entrepreneurs and capital out of those provinces to provinces that already have stronger more diverse economies. These provinces already suffer from a “brain drain”, removing equalization would only make it worse. You could not transfer enough tax points to Nova Scotia to make them self-sufficient.
In a country as large as Canada, with its somewhat peculiar provincial borders (a couple of big provs, some medium provs and four small provs), it’s over-reliance on world market for its natural resources, and the host of other socio-economic factors we can’t just wish away or pretend aren’t real (QC nationalism, western pissed-offedness, etc.), you have to have some kind of redistribution between citizens to keep the thing stitched together. There’s lots wrong with the way Equalization works, no argument there, but I don’t see how you can have this country, with this geography and this political & economic history and not have some series of mechanisms to ensure you don’t create a country that depopulates and impoverishes some parts of the country.
I think we in Alberta would be far less frustrated with equalization payments if the federal government wasn’t also simultaneously hampering our resource development and spending so much money on wasteful programs if not outright graft. What was the return on the whole EV batteries investments? the green fund? and the huge expansion of the administrative cost of government?
Maybe "feelings" but it isn't grounded in objective reality.
Oil production is at all time highs. Much of the investments on EVs (which is the future in any case, and electrification would insulate us from supply shocks) were conditional on production.
I guess we’ll agree to disagree, but some final thoughts:
1) The US generally has a more powerful federal government than Canada does, which I disagree is caused by an elected senate. Do you feel Australia has the same dynamic with respect to state premiers and senators?
2) Countries with effective governance have friction and checks and balances to prevent one branch of government from having too much power. A Triple E senate would counter the PM’s relatively immense power, with one very specific example being the ability the nominate his/her own judge to investigate an Emergencies Act public inquiry.
3) The province that contributes an outsized amount to equalization is essentially frozen out of federal power due to lack of demographic heft, without the ability to contribute to the friction I alluded to in 2).
To be clear, I don’t oppose (necessarily) an elected senate, but one that gives PEI and ON the same number of senators would be (in my view) ridiculous.
I don’t know the Australia case as well as I probably should, but their federal government has a bigger role in the provision of social policy (like health care) than does ours and that makes a difference. To my mind, it isn’t just the institutional arrangements that are important, it is also the division of powers in each state. The US was designed to be highly decentralized and yet wound up becoming highly centralized. Canada was the opposite — designed to be centralized and now one of the most decentralized federations in the world. Australia is somewhere in the middle — maybe that’s why we don’t see a high level of intergovernmental dysfunction there (but that’s just a guess).
So, as for checks and balances keeping one branch from becoming too powerful, how’s that working out in the US these days? But I do agree that we need better intrastate federalism to create the frictions you talk about — I just don’t think the Triple E is it and I also don’t think that any particular institutional arrangement is a silver bullet that will solve that problem.
And, once again, no province contributes a single dollar to equalization and thinking about equalization as coming from one province to another is to misunderstand the whole program and its rationale. It is about Canadians using their collective tax dollars to ensure that we all as Canadians (not as Albertans or British Columbians or Nova Scotians) have equitable services.
The current allocation gives each of BC and AB the same numbet of seats as NL and fewer than each of NS and NB. Equal representation would be better than the current allocation which seems to reflect populations from the 1800s
1) Without the checks and balances in the US, I have no doubt things would be even worse right now.
2) "We all as Canadians" only works so long as one region doesn't feel so marginalized as to no longer consider themselves "Canadian".
3) "No province constitutes a single dollar to equalization" may be technically true, but UKIP plastered ads all over how much the UK lost out in NHS funds to the EU. They won.
A) Quebec separation is a pipe dream, it will not happen. It does not stop the press from speculating, it sells as a doom story. PEI in 1873 got its request of 4 MPs and 4 Senators, why? it makes no sense but here you go. Now thanks to Trump and his disastrous war on Iran, the price of oil shot up to plus $100 USD overnight, Ms Smith is laughing.
Smith understands perfectly well how Equalization works, as evidenced by this statement contained in the interview above:
"Our people are very, very aware that we generate $26 billion more in the various federal taxes than the federal government reinvests back in our province."
I have yet to meet a single person who actually believes that Alberta writes a big cartoon-sized cheque annually with Quebec as the recipient.
There are good reasons why the residents of AB contribute more to federal coffers than they receive. First, the population is significantly younger than the Canadian average and therefore has a a larger proportion of its population at the peak of their earning power. Second, Albertans make significantly higher incomes than most other Canadians and therefore pay more taxes on that income. I would suggest that those are pretty good problems to have. PEI or Nova Scotia would love to have those problems.
It also seems that you're suggesting that every province should get federal tax spending in accordance to what their residents pay in federal taxes. That would mean no equalization whatsoever and would mean the wealthier provinces would get more services and more federal spending than poorer provinces because they contributed more to the pot of federal dollars. That's not a country I would want to live in.
The CRA would classify me as a high income individual, so I probably contribute more to federal and provincial coffers than I receive in services from either level of government. I'm okay with that because it means that the single mother gets social assistance that keeps her family's head above water. I have no children but pay property taxes that pays for the public education of other people's kids. I'm okay with that because an educated population is a key driver of economic growth and creates the social capital that helps bind us together.
Again I go back to the position of Brad Wall who wanted his province to be successful enough to become a net contributor to equalization -- being able to assist others and contribute to their success was a marker of his province's success. To me that is a quintessentially Canadian perspective on what it means to be Canadian.
Nowhere did I say that every province should get federal tax spending in accordance to what their residents pay in federal taxes.
Nor am I saying that Albertans begrudge Canada the federal taxes we pay.
You seem very determined to put words in other people's mouths. You've generated a huge amount of chatter in this string due to your base assertion - which was that you believe Albertans somehow don't understand how Equalization works.
So, if Albertans do not begrudge the federal taxes they pay (and AB pollster Janet Brown continually refers to Albertans as particularly "tax averse") then why are they so upset about how much more they pay towards Canada than anyone else? You wouldn't complain about paying more in taxes than you receive in services if you didn't begrudge (at least a little) paying more in taxes than you receive in services.
I'm not sure what point you're trying to make. Yes, the federal tax rates have to cover the transfers. And in the case of Equalization the federal govt is constitutionally obliged to do Equalization. And they are legally (and politically) obliged to provide the Health Transfer and the Social Transfer which also redistribute monies between Canadians via cheques to their provincial governments. Personally I have no problem with my taxes being used in this way -- I see it as a key element in keeping the country together.
Good Day Paul. Decent effort on your part in reaching out to the premier and respectfully asking your questions. I so loathe the main stream medias obsession in constantly trying to catch her in a sound byte that they can then spin to suit their click bait needs. NOTHING infuriates Albertans more than these folks 'Albertasplanin' Alberta to Albertans. You would think that with a couple other premiers and one PM, that they would have sufficient material to feed upon. Ms. Smith is no dummy and if given a fair opportunity, she consistently, eloquently and clearly presents her position that, by the way, has not varied far from her original intended path for the province. Indeed circumstances are changing rapidly but unlike some of her peers and the PM, she has not wavered in her efforts to share, discuss and to engage Albertans in the process. That she is protective of the province is more than reasonable. Be VERY wary by the current news that she is somehow tettering on the brink of toppling. The NDP have installed more recall actions to her and her cabinet than in any other Canadian jurisdiction at any time in Canadian history. They have yet to see any of those lofty and impotent efforts bear fruit. Alberta will continue to fight for its place within confederation. Only time and the energized Alberta voters will tell what that will ultimately look like. How strangely democratic of us.
While I don’t agree with the numbers of recall actions that have been generated by people opposed to the UCP(they are not all NDP generated actions) I think it was in many cases a protest to the UCP lowering the threshold for recalls in the first place. There is an argument that the threshold was changed from the original legislation of the Kenny UCP government due to the unsuccessful recall of Jyoti Gondek as Mayor of Calgary. Originally, the UCP saw the lowering of the threshold as benefitting conservative groups and never conceived that it could turn against their own politicians.
A Paul Wells interview is always informative, thoughtful - and civil, which is a nice change of pace in these tumultuous times. But sometimes perhaps a bit too civil. Danielle Smith is articulate; she gets away with a lot in Alberta's media. It would be nice to have her feet held to the fire more often. Jared Wesley's recent post entitled "Governing by Referendum" on Substack zeroed in on the key question regarding the Premier's 9-question referendum:
"“the people” aren’t deciding which topics are prioritized and how the issues are framed. If they were, polls suggest Albertans would prefer to vote on issues like healthcare, the economy, education, and affordability -- all of which they feel the UCP is bungling.
Nice to read an elected official who can talk freely and in words we can all understand. I am so fed up with whiners in Ottawa trying to not answer questions. Listening to an intelligent conversation is so refreshing and makes the citizen want to hear more.
Terrific interview, and Smith comes out of it very well. She's clear and articulate about her positions, and successful in many of her arguments.
I don't share her politics, but I better understand them now, and how place and time and circumstances have shaped them.
It's a pleasure to experience a consummate professional at work, and she certainly is that. As an intellectual exercise, I wonder what her unique style would look like when transported outside of the unique Alberta situation to, for example, Ontario.
Fat-fingered send! Our second most populous province has a chronic “below-average fiscal capacity (the ability to raise revenue)”, mostly due to its silly language policies and huge dysfunctional bureaucracy, while the current Equalization calculations enable this bad behaviour. Ontario has almost twice the population and receives only $546M to Quebec’s $13.6B.
Both good points gentlemen I also should have mentioned. And not to mention Quebecers also pay among the lowest, if not THE lowest, electricity prices in Canada, $10 a day government daycare if you can find a place, excellent parental leave programmes, provincial pharma- care for those not covered by private plans, terrible roads and crumbling infrastructure, exorbitant industrial subsidies, and the list goes on. It’s amazing what $13.5B will buy! Full disclosure, I live in Montreal. It’s a beautiful city that deserves better. To paraphrase Stephen Dedalus’ line in Joyce’s Ulysses; “history is a nightmare from which nationalist Quebecers have not yet awoken”.
A $32B Heritage Fund would be exponentially larger if Alberta had a moderate sales tax or had royalty rates even remotely close to those of other oil producing jurisdictions.
Alberta could have chosen to accumulate the Heritage Trust Fund off to the side, touching none of it, while taxing our citizens to account for our annual expenses.
This is absolutely a choice we could have made, and what a different province Alberta would be if that was the choice we had made.
But let me ask you - in the theoretical world in which Alberta was currently sitting on a Savings Account which had a trillion or more dollars in it, do you think our federal government would have simply allowed us to keep the money....?
The Equalization formula counts Alberta's lack of a PST against us "as if" we were collecting every penny of it.
...but strangely, it does NOT count Quebec's oil and LNG deposits against them "as if" they were choosing to develop them rather than leaving these resources in the ground.
WHY?
Both are equally provincial decisions about provincial matters.
I feel like we’re living in the Upside Down when discussions about breaking up the federation (already one of the world’s most decentralized btw) ramp up in conjunction with the greatest external threat we’ve seen in an age.
A perfect example is the news that the OLF is hiring “undercover inspectors” to fan out across the province and check stores for any unlawful English words. You can’t make this stuff up.
Great interview Paul, and I have always been impressed with Premier Smith. Concerning equalization and Quebec, I think the issue that upsets many Canadians is the fact that our second most populous province with below-average “fiscal capacity” (the ability to raise revenue).
1) Would you like to thank BC for taking away a lot of your medical expenses? There's a clear pattern of Albertans paying in taxes through their productive years, then moving to BC to inflict their medical issues on the system they didn't pay into; BC has nearly twice the population over 65 that Alberta does. Would you acknowledge that's a reverse transfer payment?
2) Albertan premiers love to draw the dotted line around provinces, and call the the tax patterns transfer payments...but would you blame Mayors, including Alberta Mayors, for pointing out that cities pay far more in federal and provincials taxes than rural areas do, and rural areas benefit from transfer payments out of cities to buy their hospitals and roads? The Mayors frequently complain about getting enough infrastructure money for their own growth - shouldn't those transfer payments get them some credit?
Healthier people are more likely to relocate during retirement so the impact is likley less than expected. The corollary is that those more likely to consume healthcare stay put.
Wealthier people are more likely to relocate during retirement, especially to BC which is one of the least affordable places in the world. They bring with them land transfer taxes, sales taxes and income taxes.
What is this "retirement" fantasy? Unless you are a Boomer or a public sector worker, it doesn't exist.
#1 seems to be in support of my point that those "transfer payments" out of Alberta are sometimes going to Albertans who retired to other provinces, when doing the reverse is rare.
#2 is all correct, but anecdotes that don't change the statistics. The statistics are that rural areas receive more federal money than they pay in taxes, just like some provinces do. Cities receive less in federal spending than they contribute.
Good interview and good questions, Paul. Danielle Smith is an exceptional communicator — and I’ve frequently said that her superpower is making radical ideas sounds totally reasonable. That’s been a key to her success as the Premier of a provincial government that hasn’t skipped a beat implementing one of the most radical political agendas in memory in Alberta.
Premier Smith took tips from her trip to Trump in Mar-a-Lego on flooding the zone. Perhaps his war of choice will mitigate Alberta’s budget mess by driving up the price of oil. Since Smith can no longer run against Trudeau, Quebec serves as a convenient foil. She’s an effective spokesperson for an incoherent, inconsistent policy agenda.
I was admitting she presents well; certainly not a Trump in the sense of mangled paragraphs and thoughts. But then, she lost me at comparing the cost of education to income tax, when of course it comes from property taxes. A slip, or genuinely confused? Or am I?
No, it mostly comes from general provincial revenue in Alberta. In Calgary the education portion of income tax is $1.25 billion for 2026, for a population of 1.6 million. So about $760 per capita. If you double or triple the per capita to per taxpayer, it's still a small percentage of the overall cost. The province picks up the rest.
Thank you, good to know. Now my only confusion is why every other province isn't making the same complaint, if TFW are in fact economic negatives to the provinces.
Isn't their presence a transfer payment from provincial coffers to the private firms that need cheap labour? We the People get soaked for $10K for the kid's school, while McDonalds gets a cheap burger-flipper? Should we just subsidize Canadian burger-flippers with $10K instead?
I suspect that the answer is actually "No" because the problem is tiny. I couldn't find, anywhere, the number of TFW that bring in school-age children - and I suspect the number is so small that Smith is basically fabricating an "issue". It would hardly be a first.
Low wage TFW is 100% a transfer from taxpayers to private firms. Essentially keeping wages low in those industries. What we save in cheap coffee, fast food and cheap delivery services we pay for in higher taxes. Also pay for in overcrowded classrooms and hospitals.
There is a real problem with Smith's understanding of Equalization. Albertans do not contribute to Equalization. Neither do British Columbians nor Manitobans. Equalization comes from federal tax revenue. The federal government does not tax Albertans, British Columbians or Quebeckers. It taxes Canadians. And a Canadian in Charlottetown earning $200K per year contributes just as much to Equalization as a Canadian in Calgary earning the same amount. How much you contribute to equalization has nothing to do with where you live. It only matters if think your province of residence is more important than your citizenship. Every liberal democratic state in the world practices some form of redistribution of monies to ensure relatively equitable access to services. As a federal state where most of the social safety net and social programming rests with the provinces Canada's form of redistribution sends those funds to those provinces who have less capacity to self-fund those services.
If Alberta has a problem funding its social programming it needs to look at its own available revenue raising capacity rather than trying to claw back federal tax dollars to which it has no right.
For someone who continually harps about the federal government 'staying in its lane' Premier Smith seems to have no compunction about telling the federal government how to run its programming. Equalization is a federal program redistributing federal tax dollars and Premier Smith should recognize that her attempts to characterize this as some excess tax on Albertans given to spendthrift Quebeckers is straying far out of her lane.
That’s not what she said Tom. “Why should Saskatchewan, a smaller province than Manitoba, be sending money to the center so it can be spent in Manitoba? That doesn’t make any sense. Why should BC and Alberta be in the same position, where we’re subsidizing Quebec in some years, and Ontario in some years? And why should Newfoundland and Labrador be in a position where they’re subsidizing their much larger neighbors in the Atlantic provinces? I think it’s an important conversation that we’re having about why we need to get back to the principle of equal per capita transfers…”. What she is arguing against is what you consider axiomatic that “every liberal democratic state in the world” must have some portion subsidize some other portion, at a national level, and replacing it with a population proportion transfer.
Read what I wrote. Saskatchewan does not send money to Ottawa to give to Manitoba. That is a fundamental misunderstanding of how Equalization works. It is a redistribution from wealth(ier) Canadians to less wealthy Canadians so we can all enjoy reasonably equitable levels of public services. The provinces do not write cheques. I contribute to equalization (as a pretty well-off Sask resident) via my federal taxes -- taxes I owe as a Canadian not as a Sask resident. An equally well off resident of PEI contributes just as much as I do to Equalization.
Tom, most people understand how equalization works but if one contributes and one receives it is the same as writing a cheque. What is unfair is that most of Alberta's contribution is derived from a finite resource while the so called more environmentally friendly and sustainable Quebec Hydro is excluded. I am sure the rules will be rejigged when the oil runs out so Quebec does not help Alberta.
Actually I don't think "most" people understand how it works. I hear too often how AB pays MB or QC $X in Equalization. If they understood how it works then that comment wouldn't be so common (and Premiers wouldn't exploit that misunderstanding to score political points).
But leave that aside, you are right that the formula for equalization is completely f*ck'd. On that you won't get an argument for me.
However, the UofC economist Trevor Tombe built a model on his website that allows one to adjust all the things that go into the equalization formula (renewable and non-renewable resources, tax rates, GDP, etc.). No matter what dial you twiddle in adjusting the formula, AB (in its current state) won't receive equalization because it will still have way more wealthy residents per capita than any other part of the country.
In my view there should be some kind of independent body that sets the formula so as to not allow it to be played with by politicians seeking political gain. (Incidentally the last major fiddle of the formula was done by a Prime Minister whose seat was in Calgary but who wanted more seats in QC.)
You just do not get it
This is a silly argument. The federal government is the intermediary and the net is the same as direct transfer from AB taxpayers to those of have not provinces. Yes someone earning $200K pays the same in federal taxes regardless of whether they live in Clagey or Charlottetown. The difference is that the Federal government sends more money back to the PEI government per capita than it does to the AB government. Again, the balance is what matters, not the transactions that net out to the balance.
If it is silly then why do so many feel this way? Alberta is a net contributor to Canada and it's not even close. I think it is the defining hot spot for Canadian federalism.
Canada wants to be a "Green Superpower" at the same time as being "Resource Superpower" in its bank account and national reputation. Without Alberta’s dirty oil money, the Canadian social safety net would effectively collapse.
Meantime Ottawa tells Alberta they hate the dirty oil, they happily let it bankroll Canada.
There are a lot of arguments out there, to stir hatred of other Canadians. Alberta is a net contributor, Yes. However Ontario and Quebec and all other provinces also contribute to the wealth of our Country. Either the Nation is supreme or the provinces are. A choice has to be made. I believe that our collective effort bankrolls our social programs. Not just one element of it. The big picture is accurate.
The problem is that the concept of equalization creates a fiscal imbalance between provinces and the federal government. There is a net outflow of money (collected by the feds) from the "have" provinces, which is then distributed to the "have nots". What happens is that federal services are underfunded in some parts of the country, or social service have to be funded by the province in one part of Canada, where in another part, they are subsidized by the feds. I fail to see why one government has the right to tell another government on how they should raise revenue. Under Premier Legault, the province of Quebec was running surpluses. Should that be taken into account when determining equalization? I recall when Mike Harris was the premier in Ontario, he introduced tax cuts. The federal government under Prime Minister Chretien said they would not increase any transfers to Ontario if the Premier was cutting taxes. Equalization, IMHO, was and is primarily political.
That imbalance is baked into the Canadian constitution. The feds have greater means to raise revenue than do provinces. But provinces have greater expenditure commitments when it comes to human services (health, social welfare and education).
Those human services are federally subsidized in ALL provinces. Every province receives a per capita transfer for health care and social services. Those transfers are nominally targeted (you're supposed to spend the Canadian Health Transfer on health care) and loosely conditional (you're supposed to abide by the terms of the Canada Health Act in spending you CHT dollars). In reality all the money goes into General Revenues and it is impossible to determine if every Canada Social Transfer dollar went to social services.
Those transfer exist to offset the fiscal imbalance that is built into the federation.
And a province could use those transfers as a means to reduce their own contributions to service spending. In other words if the feds raise the Health Transfer by 10% you could reduce the amount you allocate to health care from your provincial budget to keep health spending constant. That's politically difficult for a provincial govt, though, because spending on health care is popular with voters.
The Equalization Program is different in that it is an unconditional transfer to the recipient province. And it is calculated by a formula that has been consistently manipulated by the federal government for political purposes, which is something that should be changed. In the end, though, provinces can spend Equalization dollars on anything they want.
And the federal government provides a lot of money to post-secondary education (research funds, funded chairs at universities, etc.), but that money goes directly to the universities and colleges and does not flow through provincial coffers.
There is another way to do all of this. The feds could transfer tax points (and not dollars) to the provinces. In other words, reduce federal taxes and allow provinces to occupy that tax room. Your overall tax bill wouldn't go up, you would just pay more to the province and less to the feds basically.
This is a popular position with bigger provinces like ON and QC with bigger and more diverse economies. It is much less popular with smaller provinces like NS, PEI and NB. The tax point transfer is not something I would support, but it is a perfectly legitimate alternative to the current way the various transfers work. And it wouldn't change Equalization necessarily because that is mandated by the Constitution.
The greater revenue generation potential of the Federal government is a choice. Sure the Feds have access to revenue sources like tarrifs unavailable to the Provinces, but the bulk of their revenue comes from income taxes. It would be easy to, for example knock 5% off each federal tax bracket, and the Provinces takes up the room.
Our Constitution was written by the creators of Canada, NOT the Federal Government. Our Constitution works for all Canadians. Some politicians may argue it does not, however I am weary of politicians and their thirst for power over the good of all.
There's a lot of hyperbole in this thread but I have major problems with this system and I'll do my best to articulate them:
1) The HoC allocates a strong majority of seats to the two largest provinces, effectively giving them outsized control of the federal political agenda.
2) Instead of a “Triple E” Senate, like in the US and Australia, which gives more weight to individual states, the PM appoints partisans as senators (I don't buy Trudeau’s “independent senator” shell game).
3) This, with political power centralized with Laurentian Elites, both of the largest provinces as net recipients of equalization, there is little incentive for transparency.
4) After the 2014 oil price crash, Alberta still don't receive equalization. Why?
5) Have not provinces are disincetivized from improving their economies. For instance, Legault claimed he want Quebec to be economically self-sufficient, yet the equalization system disincetivized this effort and it didn't happen. I've read conspiracy theories claiming this is a tactic to prevent Quebec separation. Who knows, but it's an interesting way to look at it.
6) Talented Canadians who would have moved to more prosperous provinces to contribute talent to stronger more productive economies are disincetivized from doing so, effectively creating an opportunity cost for those provinces.
1) In a system based on one person, one vote, provinces with large populations are going to have more seats. It is called “democracy”. They don’t have an “outsized” proportion of the seats in the HoC, they have the proportion of seats that is justified by the size of their population.
2) Some of the biggest opponents of a Triple E senate are provincial premiers. If you heighten the power of the Senate as a form of intrastate federalism, then you likely lessen the power of the premiers in the arena of interstate federalism — look at the US, who do you think exercises more power in the system, the governor of NDakota or a Senator from NDakota. And do you really think that PEI with 150K people should have the same number of Senate seats as AB or BC? There’s a lot wrong with the Senate and it needs massive reform … but a Triple E model is not the right answer
4) Even if you remove oil and gas revenue from the formula and even if you add revenue from renewables into the formula, AB still wouldn’t qualify for equalization (cf the work of UofC economist Trevor Tombe) under the current formula implemented by Stephen Harper. The formula is f*ck’d, there’s no argument there, but it could be easily fixed.
I do, though, wonder why Albertans and British Columbians are so eager to get equalization payments. Being a recipient of equalization means your economy is weak and you can’t support the programming that other Canadians have. When he first took office, Brad Wall gave a speech to the Canadian Club in which he said he couldn’t wait to grow the Sask economy so that it wouldn’t need equalization payments anymore and that it could finally contribute to equalization. That was his goal, to grow his economy and for his province to be wealthy enough that its residents could be net contributors to the federation rather than recipients of aid. And that’s what he did. Of course, now his successor is complaining that the system is unfair. I’m not a Brad Wall fan, but I always admired that sentiment — I don’t want my province to be a recipient of social welfare from the federal government, but I do want to contribute to the social welfare of the rest of the country.
It is also the case that the provinces that are long time recipients of social welfare tend (with the exception of Quebec) to be more likely to acquiesce to federal intrusions into their jurisdiction. Just look at Atlantic Canada — they are highly dependent on federal transfers and in intergovernmental negotiations they are almost always the first to break ranks with the other provinces to appease Ottawa. We saw this with the most recent round of health care spending agreements — they were the first out of the gate to agree to Ottawa’s demands. Receiving those transfers come at a cost.
5/6) Yes, there are some disincentives to equalization and it probably does impact labour mobility. But that is also by design. Without the transfers that allow comparable services and comparable taxation regimes, they would lose a good many of the talented people they need to do what you suggest — diversify and strengthen their economy. If you remove equalization then either services decline or taxes go up significantly. That will drive entrepreneurs and capital out of those provinces to provinces that already have stronger more diverse economies. These provinces already suffer from a “brain drain”, removing equalization would only make it worse. You could not transfer enough tax points to Nova Scotia to make them self-sufficient.
In a country as large as Canada, with its somewhat peculiar provincial borders (a couple of big provs, some medium provs and four small provs), it’s over-reliance on world market for its natural resources, and the host of other socio-economic factors we can’t just wish away or pretend aren’t real (QC nationalism, western pissed-offedness, etc.), you have to have some kind of redistribution between citizens to keep the thing stitched together. There’s lots wrong with the way Equalization works, no argument there, but I don’t see how you can have this country, with this geography and this political & economic history and not have some series of mechanisms to ensure you don’t create a country that depopulates and impoverishes some parts of the country.
I think we in Alberta would be far less frustrated with equalization payments if the federal government wasn’t also simultaneously hampering our resource development and spending so much money on wasteful programs if not outright graft. What was the return on the whole EV batteries investments? the green fund? and the huge expansion of the administrative cost of government?
I think there’s something to this.
Maybe "feelings" but it isn't grounded in objective reality.
Oil production is at all time highs. Much of the investments on EVs (which is the future in any case, and electrification would insulate us from supply shocks) were conditional on production.
I guess we’ll agree to disagree, but some final thoughts:
1) The US generally has a more powerful federal government than Canada does, which I disagree is caused by an elected senate. Do you feel Australia has the same dynamic with respect to state premiers and senators?
2) Countries with effective governance have friction and checks and balances to prevent one branch of government from having too much power. A Triple E senate would counter the PM’s relatively immense power, with one very specific example being the ability the nominate his/her own judge to investigate an Emergencies Act public inquiry.
3) The province that contributes an outsized amount to equalization is essentially frozen out of federal power due to lack of demographic heft, without the ability to contribute to the friction I alluded to in 2).
To be clear, I don’t oppose (necessarily) an elected senate, but one that gives PEI and ON the same number of senators would be (in my view) ridiculous.
I don’t know the Australia case as well as I probably should, but their federal government has a bigger role in the provision of social policy (like health care) than does ours and that makes a difference. To my mind, it isn’t just the institutional arrangements that are important, it is also the division of powers in each state. The US was designed to be highly decentralized and yet wound up becoming highly centralized. Canada was the opposite — designed to be centralized and now one of the most decentralized federations in the world. Australia is somewhere in the middle — maybe that’s why we don’t see a high level of intergovernmental dysfunction there (but that’s just a guess).
So, as for checks and balances keeping one branch from becoming too powerful, how’s that working out in the US these days? But I do agree that we need better intrastate federalism to create the frictions you talk about — I just don’t think the Triple E is it and I also don’t think that any particular institutional arrangement is a silver bullet that will solve that problem.
And, once again, no province contributes a single dollar to equalization and thinking about equalization as coming from one province to another is to misunderstand the whole program and its rationale. It is about Canadians using their collective tax dollars to ensure that we all as Canadians (not as Albertans or British Columbians or Nova Scotians) have equitable services.
The current allocation gives each of BC and AB the same numbet of seats as NL and fewer than each of NS and NB. Equal representation would be better than the current allocation which seems to reflect populations from the 1800s
1) Without the checks and balances in the US, I have no doubt things would be even worse right now.
2) "We all as Canadians" only works so long as one region doesn't feel so marginalized as to no longer consider themselves "Canadian".
3) "No province constitutes a single dollar to equalization" may be technically true, but UKIP plastered ads all over how much the UK lost out in NHS funds to the EU. They won.
A) Quebec separation is a pipe dream, it will not happen. It does not stop the press from speculating, it sells as a doom story. PEI in 1873 got its request of 4 MPs and 4 Senators, why? it makes no sense but here you go. Now thanks to Trump and his disastrous war on Iran, the price of oil shot up to plus $100 USD overnight, Ms Smith is laughing.
“What is causing so much grievance with Albertans?”
I found this to be a bit of a quirky question given the history of Alberta politicians and their use of Ottawa as a foil.
Smith understands perfectly well how Equalization works, as evidenced by this statement contained in the interview above:
"Our people are very, very aware that we generate $26 billion more in the various federal taxes than the federal government reinvests back in our province."
I have yet to meet a single person who actually believes that Alberta writes a big cartoon-sized cheque annually with Quebec as the recipient.
There are good reasons why the residents of AB contribute more to federal coffers than they receive. First, the population is significantly younger than the Canadian average and therefore has a a larger proportion of its population at the peak of their earning power. Second, Albertans make significantly higher incomes than most other Canadians and therefore pay more taxes on that income. I would suggest that those are pretty good problems to have. PEI or Nova Scotia would love to have those problems.
It also seems that you're suggesting that every province should get federal tax spending in accordance to what their residents pay in federal taxes. That would mean no equalization whatsoever and would mean the wealthier provinces would get more services and more federal spending than poorer provinces because they contributed more to the pot of federal dollars. That's not a country I would want to live in.
The CRA would classify me as a high income individual, so I probably contribute more to federal and provincial coffers than I receive in services from either level of government. I'm okay with that because it means that the single mother gets social assistance that keeps her family's head above water. I have no children but pay property taxes that pays for the public education of other people's kids. I'm okay with that because an educated population is a key driver of economic growth and creates the social capital that helps bind us together.
Again I go back to the position of Brad Wall who wanted his province to be successful enough to become a net contributor to equalization -- being able to assist others and contribute to their success was a marker of his province's success. To me that is a quintessentially Canadian perspective on what it means to be Canadian.
Nowhere did I say that every province should get federal tax spending in accordance to what their residents pay in federal taxes.
Nor am I saying that Albertans begrudge Canada the federal taxes we pay.
You seem very determined to put words in other people's mouths. You've generated a huge amount of chatter in this string due to your base assertion - which was that you believe Albertans somehow don't understand how Equalization works.
I assure you, we do - as does our Premier.
So, if Albertans do not begrudge the federal taxes they pay (and AB pollster Janet Brown continually refers to Albertans as particularly "tax averse") then why are they so upset about how much more they pay towards Canada than anyone else? You wouldn't complain about paying more in taxes than you receive in services if you didn't begrudge (at least a little) paying more in taxes than you receive in services.
I'm not sure what point you're trying to make. Yes, the federal tax rates have to cover the transfers. And in the case of Equalization the federal govt is constitutionally obliged to do Equalization. And they are legally (and politically) obliged to provide the Health Transfer and the Social Transfer which also redistribute monies between Canadians via cheques to their provincial governments. Personally I have no problem with my taxes being used in this way -- I see it as a key element in keeping the country together.
‘To each according to their need.
From each according to their ability’
The problem comes when the need demand exceeds the supply the able can produce.
How many needy Canadians can able Canadians support?
Government borrowing would indicate that number has already been far exceeded.
Good Day Paul. Decent effort on your part in reaching out to the premier and respectfully asking your questions. I so loathe the main stream medias obsession in constantly trying to catch her in a sound byte that they can then spin to suit their click bait needs. NOTHING infuriates Albertans more than these folks 'Albertasplanin' Alberta to Albertans. You would think that with a couple other premiers and one PM, that they would have sufficient material to feed upon. Ms. Smith is no dummy and if given a fair opportunity, she consistently, eloquently and clearly presents her position that, by the way, has not varied far from her original intended path for the province. Indeed circumstances are changing rapidly but unlike some of her peers and the PM, she has not wavered in her efforts to share, discuss and to engage Albertans in the process. That she is protective of the province is more than reasonable. Be VERY wary by the current news that she is somehow tettering on the brink of toppling. The NDP have installed more recall actions to her and her cabinet than in any other Canadian jurisdiction at any time in Canadian history. They have yet to see any of those lofty and impotent efforts bear fruit. Alberta will continue to fight for its place within confederation. Only time and the energized Alberta voters will tell what that will ultimately look like. How strangely democratic of us.
While I don’t agree with the numbers of recall actions that have been generated by people opposed to the UCP(they are not all NDP generated actions) I think it was in many cases a protest to the UCP lowering the threshold for recalls in the first place. There is an argument that the threshold was changed from the original legislation of the Kenny UCP government due to the unsuccessful recall of Jyoti Gondek as Mayor of Calgary. Originally, the UCP saw the lowering of the threshold as benefitting conservative groups and never conceived that it could turn against their own politicians.
A Paul Wells interview is always informative, thoughtful - and civil, which is a nice change of pace in these tumultuous times. But sometimes perhaps a bit too civil. Danielle Smith is articulate; she gets away with a lot in Alberta's media. It would be nice to have her feet held to the fire more often. Jared Wesley's recent post entitled "Governing by Referendum" on Substack zeroed in on the key question regarding the Premier's 9-question referendum:
"“the people” aren’t deciding which topics are prioritized and how the issues are framed. If they were, polls suggest Albertans would prefer to vote on issues like healthcare, the economy, education, and affordability -- all of which they feel the UCP is bungling.
Daveberta is also good
This is also important
https://www.readtheorchard.org/p/assembly-of-treaty-chiefs-votes-no
No, it isn't.
Nice to read an elected official who can talk freely and in words we can all understand. I am so fed up with whiners in Ottawa trying to not answer questions. Listening to an intelligent conversation is so refreshing and makes the citizen want to hear more.
Terrific interview, and Smith comes out of it very well. She's clear and articulate about her positions, and successful in many of her arguments.
I don't share her politics, but I better understand them now, and how place and time and circumstances have shaped them.
It's a pleasure to experience a consummate professional at work, and she certainly is that. As an intellectual exercise, I wonder what her unique style would look like when transported outside of the unique Alberta situation to, for example, Ontario.
Fat-fingered send! Our second most populous province has a chronic “below-average fiscal capacity (the ability to raise revenue)”, mostly due to its silly language policies and huge dysfunctional bureaucracy, while the current Equalization calculations enable this bad behaviour. Ontario has almost twice the population and receives only $546M to Quebec’s $13.6B.
Both good points gentlemen I also should have mentioned. And not to mention Quebecers also pay among the lowest, if not THE lowest, electricity prices in Canada, $10 a day government daycare if you can find a place, excellent parental leave programmes, provincial pharma- care for those not covered by private plans, terrible roads and crumbling infrastructure, exorbitant industrial subsidies, and the list goes on. It’s amazing what $13.5B will buy! Full disclosure, I live in Montreal. It’s a beautiful city that deserves better. To paraphrase Stephen Dedalus’ line in Joyce’s Ulysses; “history is a nightmare from which nationalist Quebecers have not yet awoken”.
And the formula exclude a renewable resource, Quebec Hydro
A $32B Heritage Fund would be exponentially larger if Alberta had a moderate sales tax or had royalty rates even remotely close to those of other oil producing jurisdictions.
Sure, yes it would.
Alberta could have chosen to accumulate the Heritage Trust Fund off to the side, touching none of it, while taxing our citizens to account for our annual expenses.
This is absolutely a choice we could have made, and what a different province Alberta would be if that was the choice we had made.
But let me ask you - in the theoretical world in which Alberta was currently sitting on a Savings Account which had a trillion or more dollars in it, do you think our federal government would have simply allowed us to keep the money....?
This prairie boy doubts it VERY much.
The Equalization formula counts Alberta's lack of a PST against us "as if" we were collecting every penny of it.
...but strangely, it does NOT count Quebec's oil and LNG deposits against them "as if" they were choosing to develop them rather than leaving these resources in the ground.
WHY?
Both are equally provincial decisions about provincial matters.
I feel like we’re living in the Upside Down when discussions about breaking up the federation (already one of the world’s most decentralized btw) ramp up in conjunction with the greatest external threat we’ve seen in an age.
A perfect example is the news that the OLF is hiring “undercover inspectors” to fan out across the province and check stores for any unlawful English words. You can’t make this stuff up.
Great interview Paul, and I have always been impressed with Premier Smith. Concerning equalization and Quebec, I think the issue that upsets many Canadians is the fact that our second most populous province with below-average “fiscal capacity” (the ability to raise revenue).
My two fantasy questions for an Alberta premier:
1) Would you like to thank BC for taking away a lot of your medical expenses? There's a clear pattern of Albertans paying in taxes through their productive years, then moving to BC to inflict their medical issues on the system they didn't pay into; BC has nearly twice the population over 65 that Alberta does. Would you acknowledge that's a reverse transfer payment?
2) Albertan premiers love to draw the dotted line around provinces, and call the the tax patterns transfer payments...but would you blame Mayors, including Alberta Mayors, for pointing out that cities pay far more in federal and provincials taxes than rural areas do, and rural areas benefit from transfer payments out of cities to buy their hospitals and roads? The Mayors frequently complain about getting enough infrastructure money for their own growth - shouldn't those transfer payments get them some credit?
A few things you are missing.
Albertans spend a lot on vacations to BC during their working years and own and pay property taxes on vacation property.
Also I live near an Alberta hamlet with a 20 unit low rental housing occupied mostly by people fleeing the high cost of living in BC.
Healthier people are more likely to relocate during retirement so the impact is likley less than expected. The corollary is that those more likely to consume healthcare stay put.
Wealthier people are more likely to relocate during retirement, especially to BC which is one of the least affordable places in the world. They bring with them land transfer taxes, sales taxes and income taxes.
What is this "retirement" fantasy? Unless you are a Boomer or a public sector worker, it doesn't exist.
Aren't there residency requirements before one can receive health benefits after changing provinces?
#1 seems to be in support of my point that those "transfer payments" out of Alberta are sometimes going to Albertans who retired to other provinces, when doing the reverse is rare.
#2 is all correct, but anecdotes that don't change the statistics. The statistics are that rural areas receive more federal money than they pay in taxes, just like some provinces do. Cities receive less in federal spending than they contribute.
So it’s federal, but comes from Ontario…
…I’ve reached:
3) http://www.lipglossiping.com/wp-content/uploads/2011/12/my-brain-is-full.jpg
Good interview and good questions, Paul. Danielle Smith is an exceptional communicator — and I’ve frequently said that her superpower is making radical ideas sounds totally reasonable. That’s been a key to her success as the Premier of a provincial government that hasn’t skipped a beat implementing one of the most radical political agendas in memory in Alberta.
Premier Smith took tips from her trip to Trump in Mar-a-Lego on flooding the zone. Perhaps his war of choice will mitigate Alberta’s budget mess by driving up the price of oil. Since Smith can no longer run against Trudeau, Quebec serves as a convenient foil. She’s an effective spokesperson for an incoherent, inconsistent policy agenda.
Superb interview Paul. Ms Smith is quite eloquent.
Excellent interview.
Superb interview and insightful comments. Thank you Paul.
I was admitting she presents well; certainly not a Trump in the sense of mangled paragraphs and thoughts. But then, she lost me at comparing the cost of education to income tax, when of course it comes from property taxes. A slip, or genuinely confused? Or am I?
No, it mostly comes from general provincial revenue in Alberta. In Calgary the education portion of income tax is $1.25 billion for 2026, for a population of 1.6 million. So about $760 per capita. If you double or triple the per capita to per taxpayer, it's still a small percentage of the overall cost. The province picks up the rest.
Thank you, good to know. Now my only confusion is why every other province isn't making the same complaint, if TFW are in fact economic negatives to the provinces.
Isn't their presence a transfer payment from provincial coffers to the private firms that need cheap labour? We the People get soaked for $10K for the kid's school, while McDonalds gets a cheap burger-flipper? Should we just subsidize Canadian burger-flippers with $10K instead?
I suspect that the answer is actually "No" because the problem is tiny. I couldn't find, anywhere, the number of TFW that bring in school-age children - and I suspect the number is so small that Smith is basically fabricating an "issue". It would hardly be a first.
Low wage TFW is 100% a transfer from taxpayers to private firms. Essentially keeping wages low in those industries. What we save in cheap coffee, fast food and cheap delivery services we pay for in higher taxes. Also pay for in overcrowded classrooms and hospitals.