It didn’t take Danielle Smith long to start complaining about Quebec when someone challenged her about education funding here in Wild Rose Country at her recent Gilead Next* town hall meeting in Fort McMurray last week.
Former Wildrose MLA Bruce McAllister, now the emcee of Premier Smith’s “Alberta Next” travelling dog-and-pony show (Photo: Source not identified, via the Chestermere Anchor).
Pardon me, I should have said Alberta Next, although the way things are going with the premier’s forced self-censorship policy for school libraries, it would now be a fair comment to refer to this province as Gilead North.
Before Alberta is flooded by a post-long-weekend tsunami of distracting announcements by the United Conservative Party and your faithful blogger disappears for a vacation, let’s take a closer look at what Ms. Smith had to say at that moment in Fort Mac, which despite the government’s ongoing effort to pack these separatist town halls with friendlies was attended by fewer than 250 locals, not all of them on side.
When a questioner wanted to talk about Alberta’s crowded classrooms and lowest-in-Canada per-student funding, and couldn’t be deterred by Bruce McAllister, the former Wildrose MLA and Smith loyalist who acts as emcee of the Alberta Next propaganda forums, an obviously annoyed premier quickly slipped into a rant:
“… What we’re talking about tonight is Ottawa over … Do you want to hear the answer?” she barked at her interlocutor, “… is Ottawa over-taxing us!”
“That they, we, our, our, our program costs are 70 per cent of all tax dollars. We only collect 40 per cent, Ottawa collects 60 per cent. And then, they use political means to transfer it. Alberta, year after year, has 20 to 25 billion dollars that is siphoned out of our system to go to Ottawa so that it could be spent – mostly in Quebec, but also in other places that vote Liberal. We have been watching this, for years. Six hundred and fifty billion dollars in the last 40 or 50 years that have been taken out of this province! You don’t think we might be able to do a little bit more on social spending if those 20 to 25 billion dollars stayed here? You don’t think we’d be able to cut taxes a bit if those 20 to 25 billion dollars stayed here? It is 5,000! Dollars! Per! Albertan! that every single year gets transferred out of this province for political reasons so that the Liberals can continue to spend it in places that vote Liberal. That is, that is what is happening in the province!”
University of Calgary economics professor and Alberta Next Panel member Trevor Tombe (Photo: Screenshot of Government of Alberta video).
This exchange, featuring Ms. Smith’s shouty delivery, has been played many times on social media. It can be watched here from a couple of views – including one that shows University of Calgary economist and panel member Trevor Tombe suffering through the premier’s tendentious speechifying.
Actually, though, if you’re looking for a pretty good explanation of how things really work, Dr. Tombe provided a partial one long before he unwisely joined the panel.
“What’s behind the redistribution?” he asked in 2020. “It’s fairly simple. …” (Remember, almost all equalization funding comes from taxes, not from provinces, a fact that even Ms. Smith now occasionally concedes.)
“High-income regions have more high-income individuals and businesses,” the professor explained. “These individuals and businesses unsurprisingly pay more in income taxes. They also buy more stuff, and therefore pay more in sales taxes and various excise taxes. In addition, higher income regions in Canada also tend to be younger (Alberta especially) and therefore receive fewer payments out of Old Age Security, Guaranteed Income Supplements, and various other income supports targeting elderly individuals. Finally, while high-income provinces generally don’t receive equalization payments from the federal government, poorer ones do. However, as we will see, equalization’s role in fiscal redistribution is often overstated, particularly in Alberta.” (Emphasis added.)
“Alberta provides a good example of why higher-income provinces wind up sending more money to Ottawa, mostly through their federal taxes.** … If a province accounts for an above-average level of revenues per capita or accounts for a below-average level of expenditures per capita, then a ‘fiscal gap’ will exist. Positive gaps mean a fiscal outflow of the province and negative gaps mean a fiscal inflow. For Alberta, most categories are positive.”
Thank you, Dr. Tombe.
Former Wildrose Party MLA Rick Strankman (Photo: David J. Climenhaga).
What’s more, as Ms. Smith often does, she was speaking out of both sides of her mouth. What are the chances tax money paid by Canadian residents of Alberta would end up in social programs here when our government vows revenue will remain so low we can barely keep the lights on every time the price of oil declines?
And surely she of all people understands that many Albertans flee the province the moment they retire for more salubrious locations in the province to the west.
Earlier in the Fort Mac meeting, Dr. Tombe made an interesting observation about Quebec’s hydroelectricity revenues, with which Ms. Smith nodded agreeably.
If you wanted to improve Canada’s equalization program, Dr. Tombe expounded, “some small changes in how we treat hydroelectricity revenues, which are very important in Quebec, can have a very, very big change. Just to illustrate magnitudes here, if Quebec’s power prices were two cents a kilowatt higher, and they would still maintain the lowest power prices two cents a kilowatt higher, and we didn’t fix the size of the equalization program as we do now, then Quebec’s equalization payment would fall by about $4.2 billion this year.” (Emphasis added again.)
Isn’t this very much the argument that can be made about Alberta’s tax revenues, which are kept so perversely low they contribute to this province’s perennial boom and bust economy?
If Alberta refuses even to discuss implementing a sales tax or minimally raise existing taxes to levels that would still be the lowest in the nation in order to provide basic essential services enjoyed by all other Canadians – say, COVID-19 vaccinations – how can we expect other provinces to take us seriously when we make similar complaints about their revenue streams?
The less that is said about the subsequent Gilead Next town hall in Lloydminster the better, I suppose.
There were big cheers for Donald Trump-style mass deportation, according to The Canadian Press. Sounds as if the UCP got their base out for that one.
“I’d like to change all these questions instead of ‘Should Alberta,’ to ‘Alberta should’,” former Wildrose MLA Rick Strankman told the 350 or souls in attendance. Mr. Strankman, alert readers will recall, once expressed the view that the NDP government’s carbon levy was roughly the equivalent of Stalinist policies that led to the starvation in the Soviet Union during the 1930s.
Embarrassing.
*This is a literary reference to a book by a respected Canadian author. Readers unfamiliar with what it implies and why it’s in the news are encouraged to look it up.
**That is, I’m pretty sure Dr. Tombe meant, residents’ federal taxes.