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HARDING: Exactly How Alberta Gets Ripped Off

Alberta is being suckled dry by much more than just Equalization.

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Last January, Angus Reid found out that 76 per cent of Albertans felt they got a “raw deal” from being part of Canada. They were certainly right—at least in part. If Albertans were as well represented as Quebec is in Parliament, they would have 40 MPs and 12 senators, not 34 and 6 as it is today. But the fiscal story is even worse. Forty-four per cent of what Albertans send to Ottawa each year never comes back. If you’re wondering how, read on.

“Of course Alberta is getting fleeced by Ottawa, just not in the way you think”, wrote Tristan Hopper in the National Post last year. Equalization accounts for only one of every 13 dollars that leaves Alberta for Ottawa—never to return. 

This year, the federal government will collect nearly $20 billion in “surplus” Alberta taxes and hand it out to Quebec, Manitoba, and the Maritime provinces, leaving Alberta, B.C., Saskatchewan, Newfoundland, and Ontario the worse off. Equalization should be renamed the Quebec-Maritime Subsidization Program. It serves the purpose of buying votes and convincing Quebec to stay in Canada.

The purported reason for the program is to provide an equal level of services for Canadians in all provinces. Few are gullible enough to believe it.

The largesse of Equalization was proven in 2013 when Mark Milke issued a report for the Fraser Institute entitled “Super-sized Fiscal Federalism: How equalization over-serves have-not provinces.” He showed that the have-not provinces delivered better services in 13 of 16 categories. In Canada, some provinces are more equal than others. 

Thankfully, things aren’t quite as bad now. When Milke did his study, health transfers were also affected by equalization calculations. That was changed to a purely per-capita transfer in 2016—a positive for Alberta.

Provincial health care is one thing, post-secondary education is another. In Quebec in 2018, university tuition averaged just $2,889. This is roughly half of what it cost students in British Columbia ($5,635) and Alberta ($5,749), and clearly would not be possible if Quebec did not get 62 per cent of Equalization payments. This was reported by Jake Fuss in an excellent policy paper on Equalization that he wrote for the Frontier Centre for Public Policy last year. 

Alberta giveth and Ottawa taketh away

At 63.9 per cent, Albertans watch a bigger slice of their annual tax bill go to the federal government than do taxpayers in any other province. Of the $49 billion Albertans sent to Ottawa in 2016, only $27.2 billion came back. That’s a gap of $21.8 billion, which works out to a whopping $5,265 for every man, woman, and child. Put another way, the average Alberta family of four sends $21,000 a year to Ottawa that just disappears. 

How does that compare to other provinces? Ontario was the second greatest net contributor to Canada at $9 billion ($669 per resident), while B.C. gave $4.2 billion ($904 per resident). 

Newfoundland and Labrador came out $1.4 billion ahead with an incoming $2,693 per resident from Ottawa, despite paying into Equalization. Manitoba got a $4.2 billion bump from Ottawa ($3,286 per resident). Quebec got nearly two-thirds of equalization payments, helping make it the big winner of confederation with a $16.1 billion bonus.

Just how Alberta loses so much wealth was laid out by University of Alberta economist Trevor Tombe.

Alberta’s low corporate tax rates mean many businesses locate to Alberta, but the federal portion goes to Ottawa nevertheless. This is the second-highest reason for the wealth transfer, accounting for roughly 18 per cent. At 11 per cent, Alberta has the lowest corporate tax rate in Canada, which it plans to lower it to 8 per cent by 2022.

But the biggest reason – at just over one-third of the total – is personal income taxes. In 2015, Alberta had Canada’s highest median income at $100,300, compared to $80,940 for Canada generally. That year, Calgary and Edmonton were the second and third best cities in that regard, second only to Ottawa.

As wages climb into higher tax brackets, their percentage rises. Tax brackets in Canada are 15 per cent at the lowest levels of income, then rise to 20.5, then 26, then 29. The Trudeau government introduced a 33 per cent tax rate at the 200,000+ annual level of taxable income (now at 210,371 thanks to inflation), a move that hits Alberta worse than any other province. The Liberals also eliminated income splitting for couples. This also had to hurt Alberta more than other places. It was far more likely that a single income from the oil patch could pay enough for two people, or one parent staying at home raising children while the other made most of the household income.

Alberta has a median age of 36, making it the youngest province in Canada. Fewer retirees means Albertans pay $3 billion more into the Canada Pension Plan than they get back each year. Quebec has its own pension plan, and experts like Jack Mintz believe an Alberta Pension Plan would be a slam dunk.

The Alberta Investment Management Corp (AIMCO) already exists and could expand its responsibilities into investing for an APP. AIMCO estimates that pension deductions would be just 7.21 percent, instead of the 10.2 currently levied for the CPP. That means more money in Albertans’ pockets.

Federal workers

Most federal government employees do not work in Alberta, but are paid by Alberta taxpayers to work elsewhere.

In 2015, the Canadian Federation of Independent Business compared the salaries and benefits of federal government workers versus people doing the same jobs in the private sector. It found that federal employees were usually paid 13 per cent more than their private sector counterparts, a gap that rose to 33.2 per cent once pensions and other benefits were considered. Problems with the Phoenix pay system aside, federal workers are paid at a premium and have money to spend. 

Relative to its population, Alberta has fewer federal employees than any other province.

When Alberta Premier Jason Kenney says, “People have a bloody right to be frustrated in this province,” he is right. Pipelines remain unbuilt, costing the energy sector $10 billion to $15 billion per year. 

Albertans watch their wealth needlessly disappear as opportunity is lost, and their earnings from what remain get sucked away. Some in other parts of Canada are starting to sympathize, but unless Alberta acts in its own interest, it’s hard to see how anything will change.

Opinion

MORGAN: Has Kenney dodged a bullet?

“Whatever shortcomings he may have, it is undeniable that Jason Kenney is a master political player.”

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Apparently the meeting was quick, but strategic discussions went well into the night before the Executive Committee (EC) of the UCP agreed upon the rules to set out for a future leadership review for Jason Kenney.

The political brinkmanship leading up to this meeting began months ago. While rogue constituency associations (CAs) were trying to meet a constitutional bar set for invoking a leadership review, Kenney loyalists were organizing to ensure the EC elected at the UCP’s November 2021 annual general meeting (AGM) could control the terms of the review. It appears the Kenney loyalists have won this round.

A total of 22 CAs issued a letter demanding a leadership review to be held by the end of March in 2022. That met the bar set out in the party bylaws to invoke such a review and it put Kenney on the spot. An attempt was made to raise the bar for calling a review to 29 CAs, but that motion was soundly rejected by party members at the November AGM. Plan B was to stack the party EC and that appears to have been a success.

A leadership review is now slated to be held in Red Deer on Saturday, April 9, 2022. This review will look nothing like what the 22 constituency associations wanted to see, however. The terms of this review have been set by the party executive and they will slant the odds in favour of Jason Kenney.

The CAs wanted the review to allow every member of the party to place a vote. The only party members who will be able to vote in the leadership review will be delegates who pay a fee and travel to Red Deer on April 9th in order to vote in person. That fee has yet to be determined, but we can rest assured it won’t be inexpensive. This will likely reduce the number of people voting in the leadership review down to well under 1,000. This provides a much more manageable number of members to manipulate in order to ensure a positive measure of support for Jason Kenney.

In the late hours of the last night of the legislative session, the UCP government invoked closure and passed Bill 81 that will allow a single person to purchase hundreds of memberships on behalf of other people in a political party. CAs that used to have to disclose the source of all donations will no longer be obliged to do so. This provides a mechanism for a political action committee (PAC) to funnel funds to CAs which could sponsor members to attend events such as leadership reviews. Theoretically, memberships could now be purchased for others who then have their transportation and convention fees sponsored in order for them to place votes favorable to the leader. Do you think this may happen?

Whatever shortcomings he may have, it’s undeniable that Kenney is a master political player. He knows rules and procedures inside out and he has decades of experience in winning campaigns from general elections to leadership races. Kenney is pulling out the stops to keep himself in the leader’s seat of the UCP and it looks like he may very well pull it off.

While Kenney may have just won the latest battle, it will remain to be seen if he wins the war. He is lining up the stars in order to ensure a winning leadership review, but he will be still facing a grumpy caucus and some infuriated CAs the day after the review if not sooner.

Kenney is buying himself time. With time he may win over ruffled caucus members and as we come closer to election time, CAs may become dominated by Kenney loyalists again.

While Kenney may pull off dodging a bullet with his leadership, his biggest challenge remains winning the next election. Being a skilled political operator may help keep him in the leader’s seat, but it doesn’t necessarily endear himself with the general electorate. Political intrigue can foster public mistrust.

Kenney is in a fight for his political life. This war will take place in a number of battles. So far Kenney is winning them.

The final battle will come in the spring of 2023 when Kenney faces the Alberta electorate as a whole.

Cory Morgan is Assistant Opinion & Broadcast Editor for the Western Standard
cmorgan@westernstandardonline.com

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The Pipeline: YouTube cancels Western Standard

This week a Calgary Cop suspended for refusing vax, YouTube cancels Western Standard and D-Day on Kenney’s leadership vote rules. Join us live at 12 PM!

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Opinion

MORGAN: Free speech in comedy under siege

“What has happened to our society when a comedy festival may turn into a street battle? “

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Standup comedians have always been on the front lines in battles over free speech and expression.

In the 1960s, 70s, and 80s, most of the pearl-clutching busybodies came from the ‘moral majority’ religious right. They feared obscenity within comedy acts would degrade the moral fabric of the nation and for a while, the law agreed. Comedian Lenny Bruce was convicted and sentenced to four months in a workhouse in 1964 for the crime of spreading obscenity in his act. George Carlin was arrested seven times during the 1970s for his famous “Seven Dirty Words” routine.

Bruce died before the appeal of his sentence was completed. He was posthumously pardoned in 2003. Charges against Carlin were all dropped before he could be convicted. Carlin and Bruce refused to back down and in the end, the state couldn’t win. We will never know how many comedians allowed themselves to be cowed into changing their acts due to state and social intimidation in those days. Not all of them had the will or support bases Carlin and Bruce enjoyed.

The ability for comedians to freely express themselves is just as threatened today as it was 50 years ago. The source of puritanical outrage against comedy routines has changed, though. These days the prigs demanding the curtailment of free speech in comedy acts are the snowflakes of the politically correct left.

Canadian comedian Mike Ward found himself dragged before human rights tribunals and the Canadian courts for nearly a decade over a routine in which he mocked a disabled young Canadian performer. The case ultimately went to the Canadian Supreme Court where it was ruled in a tight 5-4 split decision Ward’s right to free speech was to be protected, and jokes were not subject to judicial review. We came dangerously close to having a comedian convicted for his routine during this decade. The threat to free expression is real and it’s ongoing.

The prime target of the cancel-culture mob lately has been American comedian Dave Chappelle. Chappelle has long enjoyed poking fun at the hypersensitive underbelly of the LGBTQ activist community and has never backed down in the face of the enraged blowback following one of his acts. In Chappelle’s most recent Netflix comedy special he went out of his way to antagonize the usual suspects as he made jokes about transgender ideological orthodoxy. The response to his act was immediate and predictable. Activists demanded Netflix pull the special down and small groups of Netflix employees staged widely publicized walkouts in protest of Chappelle’s act.

Netflix never pulled Chappelle’s special down and Chappelle has remained unapologetic for it. The controversy generated by apoplectic snowflakes in response to Chappelle’s act likely only increased viewership of the special.

It has just been announced Dave Chappelle is going to be headlining a Netflix comedy festival this coming April in Hollywood Bowl. This signals Netflix has done well with Chappelle’s routine despite or perhaps even because of the controversy it generated. In having a set date at a large outdoor venue and in such a populated area, Netflix is upping the ante in their battle with cancel-culture activists. Not only are they saying they won’t pull Chappelle’s older content, but they are also expanding the reach for his next act.

American and Canadian courts have proven they will protect the rights of free expression for controversial comedians, albeit grudgingly. Anti-free speech activists will have to take their case to the streets now and I suspect they will. With as many as 17,000 attendees arriving for a comedy festival being potentially greeted by a sizable number of protesters, things may get ugly.

What has happened to our society when a comedy festival may turn into a street battle?

Chappelle’s showdown this spring could be a turning point for comedy. Will he and Netflix stand their ground in the face of protests? Will local authorities ensure the show can go on even if activists vow to shut it down? This comedy event is going to be an important one.

As with any art, the enjoyment of comedy is subjective. Some people like simple clean humour, some like complex satire, and some like vulgarity-laden shock comedy. The only people who can judge good comedy are the audience and they should only be able to render judgment through voting with their feet (and wallets). In other words, if you don’t like it, don’t watch it.

Comedians ply their trade by observing the world and poking at sacred cows. They dig into subjects people commonly avoid and force us to think about them through the lens of humour. They provide a public service by pushing the boundaries of free expression and ensuring no subjects are ever out of bounds. They often make us laugh and we need a whole lot more of that these days.

Comedians will not be able to effectively practice their art if they fear censors or legal repercussions. They will be restrained and they will leave subjects that need to be brought before public scrutiny untouched.

If the speech and expression of comedians are allowed to be suppressed, no speech is safe. We need to stand up for our comics for both their sake and our own.

Cory Morgan is Assistant Opinion & Broadcast Editor for the Western Standard
cmorgan@westernstandardonline.com

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