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EDITORIAL: On Monday, vote ‘Yes’ to end equalization

“A big ‘yes’ vote to kill equalization will not end those payments overnight, and frankly, they are unlikely to yield any reform whatsoever without a clear “or else” option for Ottawa and Quebec to ponder; but without it, we are endorsing the status quo of an exploitative federal system that is unworthy of Canada’s history.”

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Jointly written by the Editorial Board of the Western Standard

Albertans are a generous and patriotic people, but the exploitive nature of Canada’s fiscal federalism is turning many away from an unquestioning salute of the maple leaf. 

Since Canada’s centennial year in 1967, Alberta has contributed a net $600 billion more to the rest of Canada than it has received back in transfers and spending, despite our relatively small size.

Albertans make a net contribution of $15-27 billion in an average year, over $3 billion of which goes toward the $20 billion equalization program. Albertans pay another$3 billion (net) in the Canada Health Transfer and Canada Social Transfer more than is returned back to the province. 

All in, the average family of four in Alberta pays $20,000 a year in extra taxes that are sent directly to Quebec and other recipient provinces, after being laundered in Ottawa.

Many Albertans may not have minded this kind of charity in good times, but in tough times, Canada has not been there for Alberta beyond token trinkets. When Alberta needs to build pipelines to tidewater in order to keep producing the wealth that gets sent to others, many of those others stand in the way. 

Quebec – which receives more than $12 billion a year – has rejected the construction of pipelines that would transport what its premier calls “dirty oil” across her territory. The federal government – which is supposed to be the guarantor of the free movement of goods, services, and capital across all of Canada – has barely lifted a finger. In fact, the Liberal, Conservative, NDP, and Bloc Quebecois leaders have all promised voters in Quebec that no pipeline would be constructed there without their support. 

And what constitutes support? In British Columbia, the clear majority of people support pipeline construction, but governments have kowtowed to a vocal, radical minority. 

This is because Alberta simply doesn’t matter politically. Our economy is big enough to pay the bills, but our population is too small to decide elections. 

Alberta is underrepresented in the House of Commons and wildly discriminated against in the Senate, where we hold almost half the seats of tiny New Brunswick, but have twice the population of all four Atlantic provinces combined. When we try to elect our own senators, the federal government more often-than-not ignores the democratic will of Albertans. 

It’s time to fight back. The first big step in this is voting ‘yes’ to remove equalization from the Canadian constitution on October 18. To be clear, this will not actually result in the removal of equalization from the constitution on October 19. What it will do, however, is trigger a constitutional obligation on the part of the federal and other provincial governments to negotiate the issue, as the Supreme Court ruled in the Quebec Secession Reference case of 1998. 

In that case, the court ruled that if a clear majority of Quebecers voted ‘yes’ on a clear question of independence, then the rest of Canada would be constitutionally obliged to negotiate in good faith. Unspoken however, was the threat that in the event that the rest of Canada did not negotiate in good faith, that Quebec could make a unilateral declaration of independence; something that could only be circumvented by a military invasion of the province and the forceful deposition of its government; a prospect laughable in its improbability.

Alberta is not voting on independence however. It is voting on removing a confiscatory policy principle from the constitution. But what unspoken threat does Alberta have if the rest of Canada fails to negotiate in good faith? As yet, there is none. The Alberta government has pre-emptively taken more dramatic options off the table. This is a mistake. 

There are several organizations across Alberta that have done excellent work making the case for abolition, reform, and alternatives, including Fairness Alberta, the Alberta Institute, Project Confederation, the Canadian Taxpayers Federation, FightEqualization.ca, and others. 

Missing in the campaign was Alberta Premier Jason Kenney. He has wisely decided to keep a low profile, knowing that his unpopularity could jeopardize a successful ‘yes’ vote. While some Albertans may wish to send the premier a message by voting ‘no’ to what they perceive as his pet project, this would be a grievous error. It would be cutting off our nose to spite our face. 

The project of an equalization referendum goes back well before Kenney even considered going into provincial politics, to a report from the old Wildrose Party’s Equalization Fairness Panel in 2016. 

There are positive signs that Albertans are putting the fight for a fair deal above partisan politics. A Mainstreet Research poll conducted for the Western Standard found that a 66% majority of Albertans intend to vote ‘yes’ on October 18. That poll saw that a majority in every region of Alberta – Edmonton, Calgary, rural north, and rural south – all intend to cast a ballot for change to the status quo. And while a majority of NDP voters intend to vote for the status quo, a sizeable minority of them intend to break ranks and vote with the rest of Alberta. 

A big ‘yes’ vote to kill equalization will not end those payments overnight, and frankly, they are unlikely to yield any reform whatsoever without a clear “or else” option for Ottawa and Quebec to ponder; but without it, we are endorsing the status quo of an exploitative federal system that is unworthy of Canada’s history. 

On October 18, we encourage Albertans to send Ottawa a message. On October 19, we encourage Albertans to make sure that our provincial government doesn’t let Ottawa forget it. 

Jointly written by the Editorial Board of the Western Standard

The Western Standard Editorial Board is composed of the senior editorial staff of the Western Standard. Editorials written by the WSEB are jointly written and reflect the shared position of the company.

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2 Comments

2 Comments

  1. Baron Not Baron

    October 16, 2021 at 10:32 am

    A yes vote handed over to Ottawa, by Kenney, is like throwing “yes eggs” and expecting them to land where “they suppose to” and change something. This effect is going to be – I always find it correctly addressed – like a strong massage to a wooden leg!
    There will be [a] Kenney pretending he wanted to give Albertans freedom, but you see.. Ottawa didn’t want to divorce.. so there’s nothing he can do.. This last sentence is also comprised of WORDS, like everything else. A hypocrite is a caught liar.

  2. berta baby

    October 16, 2021 at 9:31 am

    Honestly folks anything we do to try and somehow retain freedom is futile.

    A yes vote with 2.30 cents will get you a coffee at McDonald’s.

    Just like the UCP a vote yes will surly disappoint and end us up in the same damn place.

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Opinion

BRADLEY: No Central Bank Digital Currency can stack up to Bitcoin

Why Bitcoin will always be the superior digital currency.

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These days, many countries are considering introducing their own Central Bank Digital Currencies (CBDCs).

The Bank of England recently released a research paper discussing the possibility of creating its own digital currency, saying it has “not yet made a decision on whether to introduce CBDC”.

In July 2021, the Bank of Canada issued a discussion paper called “The Positive Case for a CBDC”, citing it “could be an effective competition policy tool for payments” and “could also support the vibrancy of the digital economy.”

But no country is moving faster on this front than China.

The Central Bank of China has already introduced a digital yuan, which is expected to eliminate physical cash and provide a centralized payment-processing network.

As China continues to expand its CBDC implementation beyond its trial run in some cities, more of its citizens will be forced into using the government’s app to identify themselves, store their wealth and make everyday purchases. That means the Chinese government will be able to track purchases and even freeze or close personal accounts, for whatever reason they see fit.

That is a terrifying prospect – and it highlights one of the many reasons bitcoin will always be superior to any currency issued and controlled by any government.

The Bitcoin network uses blockchain technology to track the status of the network, including user balances and transactions. This allows transparency and decentralization by nature. Perhaps most importantly, this means that the system cannot be controlled or influenced by any one person, company or government.

China’s digital yuan – and any CBDC under consideration – have the complete opposite fundamentals. With a CBDC, one central bank has ultimate control and power over the currency, not to mention the ability to track and even reverse everyday purchases.

It’s a particularly worrisome situation in China, where its government has been pushing a social credit system that, at its core, rewards or punishes people for their economic and personal behaviours. As the country implements its digital yuan more broadly, there are fears China could use its CBDC to extend control over even more of its citizens’ rights and freedoms.

We don’t face that threat in western countries yet, but that’s not to say we are immune from the possibility. If Meta’s recent announcement that it’s shutting down the face recognition system on Facebook is any indication, our society is definitely not keen on being monitored, controlled, or surveilled in any way.

From 2013 to 2017, the U.S. Department of Justice ran Operation Choke Point to monitor and crack down on payments for what the government deemed “high-risk activities”, ranging from online gambling and payday loans to pornography and surveillance equipment sales. These activities were not illegal but they offended the government’s moral compass – a slippery and scary slope.

Most recently, in October 2021 U.S. President Joe Biden and his government backed down from requiring the IRS to collect data on every bank account with more than $600 in annual transactions. 

Infringements like these on our privacy are unacceptable. But the likelihood of them happening will grow exponentially if, and when, western governments introduce their own CBDCs.

Aside from a potential loss of personal freedom and privacy, CBDCs would introduce another undesirable outcome: even greater inflation than we’re experiencing today. Governments, including our own here in Canada, are printing money faster than ever, which simultaneously drives inflation and devalues personal wealth.

As Saifedean Ammous writes in his fantastic book, The Fiat Standard: The Debt Slavery Alternative to Human Civilization, “CBDCs would allow for the implementation of…inflationist schemes with high efficiency, allowing for increased central planning of market activity. Government spending would proceed unabated by whatever little discipline credit markets currently exert. Real-world prices are likely to rise, which would lead to more control over economic production to mandate prices.”

To sum this up, CBDCs could lead to higher inflation, less personal autonomy, and more government meddling. For those reasons, whenever I’m asked if the introduction of CBDCs will kill bitcoin and its relevance, my answer is a resounding, “No.”

Central bank digital currencies are not the same thing as bitcoin. They aren’t even competitors with bitcoin, nor will they ever replace bitcoin. They are a distraction. In my opinion, CBDCs will only create greater demand for bitcoin and its many advantages.

Bitcoin offers individuals the profound ability to own sound money, protect their wealth from inflation and keep governments from micro-managing their finances. That is certainly not what CBDCs will do, and it’s why we should all be very apprehensive about giving central banks the ability to issue, oversee and control digital currencies.

No CBDC can, or ever will, stack up to bitcoin.

Guest Column from Dave Bradley, Chief Revenue Officer at Bitcoin Well
@bitcoinbrains on Twitter

Sponsored by Bitcoin Well

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Opinion

ROYER: Canada ignores Alberta. Because it can

The only conclusion is that Canada is not a functioning, modern federal democracy. It caters almost exclusively to the needs of the two primary provinces.

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Crickets. That is the sound of Canada’s response to Alberta’s request to consider revisions to the equalization program over a month ago. What does the deafening silence say about Canada?

Trudeau brushed off the referendum saying that he couldn’t unilaterally address the issue, although he clearly can. His government has several bilateral agreements with provinces other than Alberta.  He can agree to change the equalization formula to drain less wealth from Alberta and Saskatchewan in the first place.

The federal Conservative Party’s silence is due to their leader Erin O’Toole’s decision to pander to Ontario and Quebec, taking the West for granted.

The silence has made one thing absolutely clear: Alberta has no voice in Canada. Voting against the Liberals hasn’t worked. Voting in a couple of Liberal MPs hasn’t helped. Relying on protection provincial sovereignty under the constitution has proven to be useless; Trudeau’s government intercedes into those defined powers with impunity.

All that remains is to look at the big picture. Alberta had no democratic input into decisions that dramatically diminished its economy. Wealth continues to be drained from the province and it has no means to stop it. A referendum — the ultimate expression of democratic rights — is ignored. What does this make Canada?

First, it clearly is not a modern democratic nation. Modern democracies give voice to minorities and seek compromise.

We do not have a federal government. There is no structural input from the far reaches of the country in the nation’s decision-making process. It is a central government, serving only the centre.

We are not really a federation either. Rights of the lesser provinces are extinguished at the whim of the central government. Those intrusions are dutifully upheld by the Supreme Court, an institution with a majority of judges from central Canada. The Senate is completely ineffective in protecting the federation. It over-represents Quebec and Atlantic Canada, is appointed at the sole discretion of the prime minister and has very limited powers to disagree with him. Alberta’s attempt to introduce democracy into the selection of Senators has been ignored by the prime minister.

Power is extremely concentrated. Trudeau’s emissions cap on hydrocarbon production is just the most recent example. No discussion with Parliament or the provinces was taken; he just made the decision with his personal staff, and announced it

He has this power because hyper-partisanship, strict party discipline and the overly centralized government concentrates power. We’ve abandoned our historic Westminster Parliamentary system of government and taken on an American style constitutional system with judicial supremacy, but with an all-powerful prime minister that lacks the checks-and-balances placed upon an American president.

The only respectful response to Alberta came from Saskatchewan’s Premier Scott Moe. He called for his province to become a nation within a nation, a status effectively granted Quebec. Neither the federal structure nor the national parliament protect the outlying provinces. They now need to gain near national powers in order to protect themselves from the central government.

The only conclusion is Canada is not a functioning, modern federal democracy. It caters almost exclusively to the needs of the two primary provinces: Ontario and Quebec. The concentration of power and the malleability of federal sovereignties has makes the prime minister effectively an elected dictator. The only check on the prime minister’s power is in an occasional national election, the results of which are determined almost entirely in Ontario and Quebec.

So, what is Canada? It is a country in which the central provinces in conjunction with the central government have dominion over the outlying provinces, and those central provinces elect a prime minister who is given near royal prerogative.

Our country is called (at least officially) the Dominion of Canada, a constitutional monarchy. By the word dominion are we saying that the centre has dominion over the rest of the country? And does constitutional democracy say that the constitution concentrates power into the hands of a single person?

We can do better.

Randy Royer is a Western Standard columnist

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Energy

VENKATACHALAM & KAPLAN: Oil and gas production is essential to BC’s economy

Here’s another slice of statistical bread to consider: In 2017 the BC oil and gas industry purchased $5.6 billion worth of goods and services from other sectors.

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Guest column by Ven Venkatachalam and Lennie Kaplan of the Canadian Energy Centre

British Columbia has been producing oil and natural gas since 1952. In fact, as of 2018, BC produced 32% of Canada’s natural gas production and 2% of Canada’s conventional daily oil production. British Columbia collects royalties from oil and gas development, supporting the economic prosperity in the province.

Want to know how important the oil and natural gas industry is to the BC economy? Using customized Statistic Canada data from 2017 (the latest year available for this comparison), it turns out oil and gas in BC  generated about $18 billion in outputs, consisting primarily of the value of goods and services produced, as well as a GDP of $9.5 billion.

As for what most of us can relate to — jobs — the BC oil and gas industry was responsible for nearly 26,500 direct jobs and more than 36,100 indirect jobs (62,602 jobs in total) in 2017. Also relevant: The oil and gas sector paid out over $3.1 billion in wages and salaries to BC workers that year.

Here’s another slice of statistical bread to consider: In 2017 the BC oil and gas industry purchased $5.6 billion worth of goods and services from other sectors. That included $600 million from the finance and insurance sector, $770 million in professional services, and $2.8 billion from the manufacturing sector, to name just three examples.

Spending by the oil and gas sector in BC is not the only way to consider the impact of the industry. Given that a large chunk of the oil and gas sector is next door in Alberta, let’s look at what Alberta’s trade relationship with its westerly neighbour does for BC.

BC’s interprovincial trade in total with all provinces in 2017 amounted to $39.4 billion. Alberta was responsible for the largest amount at $15.4 billion, or about 38%, of that trade.

That share of BC’s trade exports is remarkable, given that Alberta’s share of Canada’s population was just 11.5 percent in 2017. Alberta consumers, businesses and governments buy far more from BC in goods and services than its population as a share of Canada would suggest would be the case. Alberta’s capital-intensive, high-wage-paying oil and gas sector is a major reason why.

If Alberta were a country, the province’s $15.4 billion in trade with BC would come in behind only the United States (about $22.3 billion in purchases of goods and services from BC) in 2017. In fact, Alberta’s importance to B.C. exports was ranked far ahead of China ($6.9 billion), Japan ($4.5 billion), and South Korea ($2.9 billion)—the next biggest destinations for BC’s trade exports.

BC has a natural advantage for market access in some respects when compared to the United States. For instance, BC’s coast is near to many Asian-Pacific markets than are U.S. Gulf Coast facilities. The distance between the U.S. Gulf Coast and to the Japanese ports of Himeji and Sodegaura is more than 9,000 nautical miles, compared to less than 4,200 nautical miles between those two Japanese ports and the coast of BC.

The recent demand for natural gas in Asia, especially Japan (the largest importer of LNG) and price increase for natural gas, presents an exciting opportunity for BC oil and gas industry. The IEA predicts that by 2024 , natural gas demand forecast in Asia will be up 7% from 2019’s pre-COVID-19  levels. 

Be it in employment, salaries and wages paid, GDP, or the purchase of goods and services, the impact of oil and natural gas (and Alberta) on BC’s economy and trade flows is significant.

Guest column by Ven Venkatachalam and Lennie Kaplan are with the Canadian Energy Centre

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