Travis Toews: The equalization referendum is a crucial step in Alberta’s fight for fairness

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October 18 is approaching and, with it, the question of the referendum on equalization being raised by the Government of Alberta. There are a few reasons why I think it is vitally important to pose this question to our colleagues in Alberta.

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First, a brief history. The program was created in 1957 to “equalize” provincial fiscal disparities. In 1982, this commitment to equalization was enshrined in the Constitution and Alberta has been a net contributor ever since.

In fact, the last time Alberta qualified for equalization was in 1965 and since then it has contributed hundreds of billions more to the country than we have received in transfers and federal spending. Since 2007, Alberta has contributed $ 240 billion of net to the rest of Canada, or about $ 20 billion annually, even though our economy is struggling under the weight of low commodity prices and bad economic policies. of the previous government. It’s about $ 20 billion each year that is not available to Albertans to pay for health, education, or debt reduction.

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Albertans are frustrated and there is a growing perception that the compensation system is broken and fundamentally unfair to Alberta, taking billions of dollars out of our province, even in times of economic downturn. This frustration is also directed at the provinces that benefit from Alberta’s generosity while attacking our economic interests and implementing policies harmful to our energy industry, our province, and our people. Since 2015, for example, Quebec has raised more than $ 70 billion in offset payments, while opposing critical energy infrastructure projects like the Energy East gas pipeline and, more recently, an LNG project in Saguenay, Que., Que. would have sent Alberta’s natural gas to markets. Exterior.

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Additionally, Alberta has often come up with reforms that would help address the program’s current inequalities, including the irrational requirement that the program must grow with Canada’s economy, even as fiscal disparities across the country narrow. This requirement inflates payments beyond what the provinces deserve under the formula and is clearly unfair and unaffordable.

The integrity of the compensation formula is further eroded by the fact that non-renewable resource revenues are included in the calculation. Including this type of revenue disincentives provinces to develop their resource industries, support national economic recovery, and, over time, reduce dependence on compensation payments among recipient provinces. The inequity is compounded by the fact that revenues from state-owned natural resources are not included, which gives Quebec preferential treatment over its hydroelectric revenues.

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Over the years, these obvious reforms that would have made Canada’s economic and fiscal engine run more smoothly and sustainably have not been addressed and ignored. After years of trying to fix the program collaboratively, it is clear that there is little interest in cooperation. With no one more willing to defend Alberta’s interests, we have no choice but to raise our concerns in October.

The referendum question is simple: “Should Article 36 (2) of the Constitution Act of 1982 – the commitment of the Parliament and the Government of Canada to the principle of making compensation payments be removed from the Constitution?”

A “yes” vote on this question would boost Alberta’s fight for equity on the national agenda. And, based on a Supreme Court ruling tied to Quebec’s separation referendum, it would force the federal government to negotiate in good faith.

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Albertans are proud of their significant contributions to the country and are proud to be the nation’s wealth-creating engine, but many are frustrated with their place in the federation. The lack of fairness in our federal tax programs causes Alberta families to pay too much to subsidize the provincial services of others, and it has never been more unfair than in 2021 when our own provincial services are so strained. While there is still much work to be done, this equalization referendum is a crucial step in Alberta’s ongoing fight for fairness in the federation.

It’s time for the voices of Albertans to be heard.

Travis Toews is Alberta’s finance minister and chairman of the Treasury Board.