Alberta isn’t sending cheques to Quebec. This clear-eyed guide explains how Canada’s equalization payments really work and why reform, not rage, is the answer.
Respectfully, this reads like spin. Confederation is in urgent need of renegotiation. The main reason we cannot have reasonable conversations about this topic is because we don't have a properly functioning democracy. Some Canadians have MUCH MORE say than others about the governance of our nation, and what policy decisions are necessary. BTW (just to be clear) I am not an Albertan.
“Without it, the economic disparity between provinces would deepen, and entire regions could fall into long-term decline.”
Thankfully, our fearless leaders have solved for this potential issue by sending the entire country into long-term decline.
Equalization is a vote buying scheme and nothing more. Anyone who thinks otherwise is not a serious person.
Also, to clarify one of your more inane suggestions, if a province’s taxpayers pay a ton of money into federal general revenue and the feds send a bit of that money back to the province, that’s called giving them some of their money back, not “funding”.
I live in QC, and our political issues here certainly put my hair on fire. I was not even aware of the grudges that Albertans hold until fairly recently.
I was raised with Canadian values of being there for each other, which makes sense that everyone should have the same starting point. The distance between the haves and the have-nots is now too far apart. It has become obscene.
For example, we're still not great at that with the issues of safe drinking water in Indigenous communities (mainly in Ontario). Still, we seem to have money to give when someone starts yelling "referendum". So I'm noticing all the angry yelling and emotional triggers coming out of Alberta, and I know the division and suspicions this causes.
Honestly, I've been through both of QC's referendums. They emboldened a lot of hate, division, and an elevated sense of entitlement. Being told I'm not in Canada while living here is infuriating because the government cashes the cheques from the equalization payments. We have much lower incomes here and pay a higher percentage of taxes. I don't know what they're doing with the money. (It's not spent on infrastructure, health care, or education: that's for sure!) I think other provinces that pay more deserve an accounting.
Unlike QC's decades-long rhetoric of threats, let's hope Albertans feel some Canadian pride and are willing to find common values to start from and not become the QC of the West. (I don't like people calling Alberta Texas. They have such a culture of oppression and violence there. Insulting each other is not helpful.)
I'm still too new to the conversation about Alberta to know the truth, so I haven't formed my opinion yet. But I do hope more Canadians get properly informed, both in Alberta and elsewhere.
I love Canada. I hope you do too and will work towards unity.
What is the incentive for Quebec to get more resources out of the ground if "wealthier" taxpayers pay them not to? Why should Hydroelectricity not be charged royalties like oil is? (I guess because it is most prominent in Quebec and Ontario). Do you realize how crazy it is for Alberta to raise taxes to lower their equalization burden? Equalization incentivizes provinces not to develop their own resources.
I am fascinated by people in any country who seem to believe that because they have stuff, they shouldn’t have to share with lesser groups and places. Unfortunately, while the goal of providing equal benefits of citizens to all citizens is the standard of all “civilized” societies, there are always those who are selfish and petty.
Not a Christian, are you? Don’t believe in charity? Haven’t ever walked in another’s shoes? Do you think you can all you’ve earned with you when you die, perhaps to pay your way into Heaven like some of our southern preachers beg for money to allow them to live ostentatious lifestyles? And do you believe that your children deserve your money without working at all for it?
You are a sad, sad person. And you have my thoughts and prayers.
I think Albertans are happy to be in a position to help other Canadians. But let's be honest about the lack of fairness. Canola, beef, wheat and pork sales to China have been stopped because Canada put a 100% tariff on Chinese EV's to save Ontario jobs (its rich that Trudeau set the 100 EV by 2035 then banned the most affordable EV's). Ontario and Quebec dairy and poultry farmers have the most egregious protections driving up consumer costs, hindering trade relations, stifling innovation for no good reason. The Feds tax carbon resources like oil and gas but pretend that hydro and renewables are carbon free. How much CO2 eating plantlife was lost to projects like James Bay that flooded 2.5 Million acres? I wonder how much c02 results from this every year. The government effectively banned additional oil tankers on the west coast but bumpkis on the east coast. And if Carney lives up to his "Value" per his own writings, Alberta will be worse off. Hopefully his "values" will be subject to the usual Liberal perfidy.
Perhaps Ontario, Quebec and the Maritimes should elect more politicians that have ethics and policies they actually believe in (I noticed Liberals get elected when they want carbon taxes and high immigration rates and hate our past and then they get elected when they adopt Conservative policies to remove the carbon tax, lower immigration rates, and show pride in being Canadian). To think that even if Alberta elected 30+ Liberals, the LPC would jeopardize the 193 seats in Quebec and Ontario you are naive.
The same “have not” provinces have received equalization for decades (with little change) and Alberta has always been a net contributor. This is not about helping provinces through a tough stretch — this is grift plain and simple.
Really? Exactly who is going to do that? Liberal governments who benefit politically from giving out other peoples money? The beneficiaries of equalization? You would have an easier time amending the constitution. It’s time for Alberta to assert its independence.
We are better united than separated. And are we all not supposed help each other. Sounds to me like a small faction of Albertans doesn’t want to contribute to anyone other than themselves. MAGA maples. No empathy. Not Canadians that I identify with. Sad and disappointing.
The sentiment of not being wanted by the eastern provinces originated long before President Trump or Maga. I thought you would have been aware of that?
It’s political BS from Alberta. Payments have NEVER happened. Been saying it for weeks, battling the uneducated morons who repeat it.
My post I share to every single idiot;
“Alberta does not make equalization payments to other provinces. Equalization payments are a federal program where the federal government distributes funds to provinces that have a lower revenue-raising capacity than the national average. These payments are funded by the federal government's general revenues and are not transferred from one province to another. Alberta, along with other provinces like Saskatchewan and British Columbia, has generally not received equalization payments in recent years”
More importantly, when the oil dries up one day, and it will, they will be crying for help.
They don’t think that far ahead while saying “blah blah Liberal, blah blah your children’s futures”. They aren’t thinking about ANYBODY’S distant future, they’re thinking about their IMMEDIATE profiteering.
They know the oil will disappear (either demand or supply) which is exactly why they are trying to maximize the price they get for it now so that they can diversify their economy and save for that day. As it is now, we (all Canadians) subsidize oil sold to the Americans and import over 125,000 barrels per day from Saudia Arabia, Nigeria, Columbia etc. We also import about 400,000 bpd from the US. BTW where do you thing the Federal government's general revenues come from?
“Equalization is a necessary part of maintaining a functional federation.” No, it’s not. There’s nothing necessary about it. The Canadian federation/confederation existed prior to equalization, so it could exist again with out it. All you’ve done in this piece is regurgitate all the relevant banal clichés—“federal tax revenues,” “fiscal capacity,” “constitutional”—while gesturing to the possibility of reform, ignoring the core issues of why Alberta is so rightly aggrieved. Not only is the formula by which equalization is calculated thoroughly political, designed to benefit the East, on which the Liberals’ political power depends, but it is undeniably an unequal transfer of money from the West to the East, which penalizes the former’s productivity and higher living standards while subsidizing the higher government spending of provinces in the east.
You also left out some crucial context. Alberta would undoubtedly be more willing to accept this inequality if the federal government would start enforcing another part of its constitutional mandate that pre-existed equalization and was the primary economic motivation for Confederation: its powers over the facilitation and promotion of inter-provincial trade. When Quebec has a veto over the development of west-to-east pipelines because the Liberals don’t want to antagonize their political power base there, depending instead for a large part of its petroleum needs from imports on ships sailing up the St. Laurent, while simultaneously receiving $13 billion taken by the federal government from the West, the insistence that equalization is justified because “it’s in the constitution!” rings rather hollow.
And for the record, I lived for over a decade in both Alberta and Quebec and now live in Ontario.
Addendum: you write that Alberta has chosen to have low taxes and could choose to raise them to have greater fiscal capacity to make up for what it doesn’t get in equalization. However, this ignores the fact that one of the reasons for Alberta’s greater productivity and entrepreneurship, which provides a great deal of the federal tax revenues that fund equalization, is its lower taxes. If Alberta were to raise taxes, it would lower its own productivity, ultimately lowering federal government tax revenues.
Equalization payments incentivize provinces to keep wages low to attract business and federal transfers that they then use to subsidize life for citizens to make up for the lower salaries.
Alberta does not take that aproach and is punished for delivering high wages for its citizens, which is already hit by escalating income taxes.
Respectfully, this reads like spin. Confederation is in urgent need of renegotiation. The main reason we cannot have reasonable conversations about this topic is because we don't have a properly functioning democracy. Some Canadians have MUCH MORE say than others about the governance of our nation, and what policy decisions are necessary. BTW (just to be clear) I am not an Albertan.
“Without it, the economic disparity between provinces would deepen, and entire regions could fall into long-term decline.”
Thankfully, our fearless leaders have solved for this potential issue by sending the entire country into long-term decline.
Equalization is a vote buying scheme and nothing more. Anyone who thinks otherwise is not a serious person.
Also, to clarify one of your more inane suggestions, if a province’s taxpayers pay a ton of money into federal general revenue and the feds send a bit of that money back to the province, that’s called giving them some of their money back, not “funding”.
Maybe EDUCATE Albertans? They seem to be short on truthful information.
I live in QC, and our political issues here certainly put my hair on fire. I was not even aware of the grudges that Albertans hold until fairly recently.
I was raised with Canadian values of being there for each other, which makes sense that everyone should have the same starting point. The distance between the haves and the have-nots is now too far apart. It has become obscene.
For example, we're still not great at that with the issues of safe drinking water in Indigenous communities (mainly in Ontario). Still, we seem to have money to give when someone starts yelling "referendum". So I'm noticing all the angry yelling and emotional triggers coming out of Alberta, and I know the division and suspicions this causes.
Honestly, I've been through both of QC's referendums. They emboldened a lot of hate, division, and an elevated sense of entitlement. Being told I'm not in Canada while living here is infuriating because the government cashes the cheques from the equalization payments. We have much lower incomes here and pay a higher percentage of taxes. I don't know what they're doing with the money. (It's not spent on infrastructure, health care, or education: that's for sure!) I think other provinces that pay more deserve an accounting.
Unlike QC's decades-long rhetoric of threats, let's hope Albertans feel some Canadian pride and are willing to find common values to start from and not become the QC of the West. (I don't like people calling Alberta Texas. They have such a culture of oppression and violence there. Insulting each other is not helpful.)
I'm still too new to the conversation about Alberta to know the truth, so I haven't formed my opinion yet. But I do hope more Canadians get properly informed, both in Alberta and elsewhere.
I love Canada. I hope you do too and will work towards unity.
What is the incentive for Quebec to get more resources out of the ground if "wealthier" taxpayers pay them not to? Why should Hydroelectricity not be charged royalties like oil is? (I guess because it is most prominent in Quebec and Ontario). Do you realize how crazy it is for Alberta to raise taxes to lower their equalization burden? Equalization incentivizes provinces not to develop their own resources.
An important note is that the formula, while due for change, was last negotiated under Harper and Kenney led the charge. Both Alberta people?
I am fascinated by people in any country who seem to believe that because they have stuff, they shouldn’t have to share with lesser groups and places. Unfortunately, while the goal of providing equal benefits of citizens to all citizens is the standard of all “civilized” societies, there are always those who are selfish and petty.
I am fascinated by the people in my country who think that because I have worked hard and earned money, I should give some of it to them.
Not a Christian, are you? Don’t believe in charity? Haven’t ever walked in another’s shoes? Do you think you can all you’ve earned with you when you die, perhaps to pay your way into Heaven like some of our southern preachers beg for money to allow them to live ostentatious lifestyles? And do you believe that your children deserve your money without working at all for it?
You are a sad, sad person. And you have my thoughts and prayers.
Thank you for acknowledging that equalization is charity. That’s very charitable of you.
Actually, I follow the Buddha’s Four Noble Truths.
I think Albertans are happy to be in a position to help other Canadians. But let's be honest about the lack of fairness. Canola, beef, wheat and pork sales to China have been stopped because Canada put a 100% tariff on Chinese EV's to save Ontario jobs (its rich that Trudeau set the 100 EV by 2035 then banned the most affordable EV's). Ontario and Quebec dairy and poultry farmers have the most egregious protections driving up consumer costs, hindering trade relations, stifling innovation for no good reason. The Feds tax carbon resources like oil and gas but pretend that hydro and renewables are carbon free. How much CO2 eating plantlife was lost to projects like James Bay that flooded 2.5 Million acres? I wonder how much c02 results from this every year. The government effectively banned additional oil tankers on the west coast but bumpkis on the east coast. And if Carney lives up to his "Value" per his own writings, Alberta will be worse off. Hopefully his "values" will be subject to the usual Liberal perfidy.
Perhaps Albertans should elect more politicians who serve its citizens more than its oil and billionaires?
Perhaps Ontario, Quebec and the Maritimes should elect more politicians that have ethics and policies they actually believe in (I noticed Liberals get elected when they want carbon taxes and high immigration rates and hate our past and then they get elected when they adopt Conservative policies to remove the carbon tax, lower immigration rates, and show pride in being Canadian). To think that even if Alberta elected 30+ Liberals, the LPC would jeopardize the 193 seats in Quebec and Ontario you are naive.
It's the culture of American individualism thst’s taken hold in Western Canada
I think if you are going to write about such a touchy subject ,you should put your name where your mouth is.
The same “have not” provinces have received equalization for decades (with little change) and Alberta has always been a net contributor. This is not about helping provinces through a tough stretch — this is grift plain and simple.
If that is the case the process needs to be updated to reflect the latest trends
Really? Exactly who is going to do that? Liberal governments who benefit politically from giving out other peoples money? The beneficiaries of equalization? You would have an easier time amending the constitution. It’s time for Alberta to assert its independence.
Thank you very much for clearing that up. Gotta admit, I did not know how it worked.
This summary should be blasted across the Canadian Intra-webs!
Thanks and please feel free to share it =)
We are better united than separated. And are we all not supposed help each other. Sounds to me like a small faction of Albertans doesn’t want to contribute to anyone other than themselves. MAGA maples. No empathy. Not Canadians that I identify with. Sad and disappointing.
Right back at you, Maria.
Would not surprise me if the separatist movement is backed by Trump or MAGA
Oh I think they have reason enough. They have talked about this for decades.
The sentiment of not being wanted by the eastern provinces originated long before President Trump or Maga. I thought you would have been aware of that?
Why not place this in every provincial mailbox ?
It’s political BS from Alberta. Payments have NEVER happened. Been saying it for weeks, battling the uneducated morons who repeat it.
My post I share to every single idiot;
“Alberta does not make equalization payments to other provinces. Equalization payments are a federal program where the federal government distributes funds to provinces that have a lower revenue-raising capacity than the national average. These payments are funded by the federal government's general revenues and are not transferred from one province to another. Alberta, along with other provinces like Saskatchewan and British Columbia, has generally not received equalization payments in recent years”
More importantly, when the oil dries up one day, and it will, they will be crying for help.
They don’t think that far ahead while saying “blah blah Liberal, blah blah your children’s futures”. They aren’t thinking about ANYBODY’S distant future, they’re thinking about their IMMEDIATE profiteering.
Who funds the federal government’s general revenues?
Taxes.
Don’t bother trying to make an argument that Alberta does this or that. It BS from Smith. It doesn’t work anywhere near the way she paints it.
Smith isn’t interested in Alberta’s needs, she’s furthering HER needs. Do you approve of paying for her $280,000 carpet?
Where do tax dollars come from?
Chris. I’m not going to play your little Alberta games. Try reading the article COMPLETELY instead of selectively.
Have a good day
They know the oil will disappear (either demand or supply) which is exactly why they are trying to maximize the price they get for it now so that they can diversify their economy and save for that day. As it is now, we (all Canadians) subsidize oil sold to the Americans and import over 125,000 barrels per day from Saudia Arabia, Nigeria, Columbia etc. We also import about 400,000 bpd from the US. BTW where do you thing the Federal government's general revenues come from?
“Equalization is a necessary part of maintaining a functional federation.” No, it’s not. There’s nothing necessary about it. The Canadian federation/confederation existed prior to equalization, so it could exist again with out it. All you’ve done in this piece is regurgitate all the relevant banal clichés—“federal tax revenues,” “fiscal capacity,” “constitutional”—while gesturing to the possibility of reform, ignoring the core issues of why Alberta is so rightly aggrieved. Not only is the formula by which equalization is calculated thoroughly political, designed to benefit the East, on which the Liberals’ political power depends, but it is undeniably an unequal transfer of money from the West to the East, which penalizes the former’s productivity and higher living standards while subsidizing the higher government spending of provinces in the east.
You also left out some crucial context. Alberta would undoubtedly be more willing to accept this inequality if the federal government would start enforcing another part of its constitutional mandate that pre-existed equalization and was the primary economic motivation for Confederation: its powers over the facilitation and promotion of inter-provincial trade. When Quebec has a veto over the development of west-to-east pipelines because the Liberals don’t want to antagonize their political power base there, depending instead for a large part of its petroleum needs from imports on ships sailing up the St. Laurent, while simultaneously receiving $13 billion taken by the federal government from the West, the insistence that equalization is justified because “it’s in the constitution!” rings rather hollow.
And for the record, I lived for over a decade in both Alberta and Quebec and now live in Ontario.
Addendum: you write that Alberta has chosen to have low taxes and could choose to raise them to have greater fiscal capacity to make up for what it doesn’t get in equalization. However, this ignores the fact that one of the reasons for Alberta’s greater productivity and entrepreneurship, which provides a great deal of the federal tax revenues that fund equalization, is its lower taxes. If Alberta were to raise taxes, it would lower its own productivity, ultimately lowering federal government tax revenues.
Why doesn’t Quebec’s hydroelectric revenues account in the calculation of the formula?
Voters.
Equalization payments incentivize provinces to keep wages low to attract business and federal transfers that they then use to subsidize life for citizens to make up for the lower salaries.
Alberta does not take that aproach and is punished for delivering high wages for its citizens, which is already hit by escalating income taxes.
That's why it needs to be reformed to reflect current needs as people get a general idea of how it's supposed to work and where the current gaps are