We may or may not get a pipeline. The indecisive status quo is from the party that has run Ottawa for the past decade and fuels organizations like the Alberta Prosperity Project.
Much of the animosity stems from the perception that Alberta writes a cheque to Quebec every year, which isn’t the case. The mechanics around it are complicated.
Read more: Column: Progress vs. reality
However, outside of permitting a new pipeline, Ottawa could take one serious step to change some perceptions. Equalize the equalization payment formula.
For decades, Alberta has been labelled a “have” province, with residents contributing billions of dollars each year to federal coffers. Some of those dollars end up going toward equalization payments aimed at raising the living conditions in “have-not” provinces.
Quebec receives tens of billions in those payments, despite both provinces being resource-rich. Why? Because the math isn’t the same.
Quebec receives roughly $22 billion per year in equalization payments.
A significant portion of Hydro-Québec’s profits are excluded from the formula used to calculate the province’s fiscal capacity. In turn, it helps determine how much equalization they get/give.
That partial exclusion allows Quebec to remain a “have-not” province and continue receiving massive federal transfers, despite its significant resource wealth.
If Ottawa fully accounted for Hydro-Québec’s profits, its equalization payments would drop to about $8 billion annually, still substantial, but far less than the current sum.
Alberta, on the other hand, is treated differently. The province’s oil royalties, which amount to roughly $20–30 billion per year, are fully accounted for in our fiscal capacity. The flawed math makes Alberta a “have” province, meaning, of the federal tax dollars our workers pay, approximately $12–14 billion each year ends up going to “have-not” provinces.
If we had the same creative math provided to Quebec, our net contributions would drop to $2-5 billion. We might even become a “have-not” province if oil prices were to fall.
This discrepancy is no longer acceptable. Alberta taxpayers are subsidizing other provinces under a system that is inconsistent, opaque and fundamentally unfair.
It’s time for Ottawa to level the playing field. Resource revenues must be treated the same across all provinces. The status quo fuels resentment, undermines national unity and discourages economic growth in Alberta.
We don’t want special treatment. Just fair treatment. The purpose of equalization is to ensure all Canadians have access to similar services, not to reward one province with loopholes while punishing another.
The federal government must act. It doesn’t matter who came up with the calculation; it needs to change. Ottawa cannot continue to arbitrarily pick winners and losers when billions of dollars and provincial economies are at stake.
Read more: Column: Dangerous delays cause concern
