Voters in Alberta’s municipal elections next Monday will find, alongside local candidates for mayor, city council and school board, an unusual question on the ballot: whether they are in favour of rewriting a part of Canada’s Constitution.
The query is straightforward: “Should Section 36(2) of the Constitution Act, 1982 – Parliament and the Government of Canada’s commitment to the principle of making equalization payments – be removed from the Constitution?”
This quixotic referendum is the product of a strategy from 2019, when Jason Kenney became Premier and promised to address grievances he was stoking with a plan to “stand up” for Alberta against all enemies, real or imagined. Ending equalization is, of course, not something the government of Alberta has the power to do. It also isn’t something Ottawa or most other provinces have any intention of doing. Instead, as Mr. Kenney said when he announced the vote in June, he wants to “elevate Alberta’s fight for fairness to the top of the national agenda.”
But the unfairness is hard to see. And it isn’t even at the top of the list of issues in Alberta, as the province grapples with a terrible fourth pandemic wave, one supercharged by the Kenney government’s bad decisions. Emergency outside aid now supports staffing at Alberta’s overrun ICUs. The Premier’s popularity is at a nadir. A faction of his own party is trying to depose him.
Equalization was established in 1957, backed by both the federal Liberals and Progressive Conservatives. (Remember when Western Canada was a have-not region?) The goal is ensuring that provinces have the fiscal capacity to offer a relatively equal level of services. The principle was enshrined in the Constitution in 1982 and has long been an essential part of the functioning of the country.
Mr. Kenney often argues that Alberta is paying for equalization, but that’s not quite right. No provincial government pays. Equalization is a federal program, funded by federal income taxes and other revenue. And Albertans are subject to exactly the same federal tax rates as other Canadians. The reason the province is a net payee into the federal treasury and equalization, rather than a net recipient, is because Albertans, on average, have higher incomes than other Canadians. It’s similar to someone making $100,000 a year and wondering why she paid more in taxes than her neighbour who earned $20,000 less.
Quebec is usually a target of Mr. Kenney’s ire, but on a per-capita basis the top beneficiaries of equalization are actually New Brunswick, Prince Edward Island and Nova Scotia.
Can changes to equalization be considered? Of course. But Mr. Kenney, in his stirring up of regional antagonism, ignores that the last federal government to make major changes to the program was the Alberta-rooted Harper government, in which he served as a senior minister.
Complaints of a raw deal are exaggerated. In 2020-21, when the pandemic hurt every province and Alberta doubly suffered from rock-bottom oil and gas prices, it was federal transfers of $10.5-billion that accounted for a quarter of Alberta’s revenue. Part of the reason transfers are so robust is because Mr. Harper reworked the rules.
Back in 2019, one of Mr. Kenney’s reasons for demanding a referendum was lack of progress on an oil pipeline to the Pacific. Fast forward to this year, and Alberta’s government is beset by a lot of problems – but this isn’t one. Ottawa paid $4.4-billion to buy the Trans Mountain oil pipeline, and is spending $12.6-billion to expand it. Meanwhile, oil hit US$80 a barrel last Friday. Natural gas has also surged. Alberta expects $11-billion more in 2021-22 revenue than forecast in its February budget, and that may shoot higher.
Mr. Kenney acts as if he speaks for Alberta’s id, but the province is more complicated than that. One poll even showed Albertans backing equalization. An Environics Institute survey from 2020 found that 57 per cent of Albertans either strongly or somewhat supported it.
Like all provinces, Alberta has had some credible grievances over the years, but its wiser leaders didn’t go too hard on equalization. In 1980, at a first ministers meeting on the Constitution, Alberta Premier Peter Lougheed spoke passionately in favour. Albertans’ wealth, he said, bolsters equalization but the program was, in his view, “a crucial aspect of Canadian Confederation.” Alberta voters should think about that when they cast a ballot next Monday.
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