The outcome of last month’s federal election is a depressing reminder of a joke that was first told to me by one of my students.
What is the definition of a federal election in Canada? It is an event that takes place every four years when voters in Quebec and Ontario decide how much money Ottawa should take from Alberta and give to Quebec.
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This has been the Liberal Party strategy for the past 50 years: win elections by promising policies that transfer wealth from resource-rich/voter-poor Western provinces to voter-rich/resource-poor Eastern provinces. And it works. Over my adult lifetime, the Liberals have governed Canada for 35 of 52 years. Perhaps more telling, the Prime Minister has been from Quebec for 42 of those 52 years. This is why Justin Trudeau said that Canada belongs to Quebec.
So how much money do the Liberals take out of Alberta to buy votes in Eastern Canada? For starters, the Liberals’ budget for equalization this year is $23 billion — two-thirds of which goes to Quebec. But equalization is just the tip of the fiscal iceberg. Start with other federal programs like the Canada Social Transfer and Canada Health Transfer, then add programs like the Canada Pension Plan (CPP), Old Age Security (OAS) and Employment Insurance (EI), and the result is a series of programs where we pay in much more than we get back. Since 1960, the net outflow of cash to Ottawa has been $630 billion. For the decade leading up to 2020 COVID recession, the average net loss for Albertans was closer to $20 billion a year.
This translates into about $2,700 per family of four to fund so-called “have-not” provinces — Quebec and those in Atlantic Canada. The details are complicated but the bottom line is simple: Follow the money.
While Alberta has lost more than half a trillion dollars since 1960, Quebec has been a net beneficiary of $497 billion from Ottawa transfers. In addition to receiving two out of every three dollars of equalization this year, Quebec has received an average net transfer of over $17 billion per year since 2010. Since 2006, as Alberta’s debt spiralled to previously unimaginable levels, Quebec has socked away $11.6 billion dollars in a newly created Generations Fund “with the goal of reducing Quebec’s debt burden.” Yet somehow — go figure — Quebec is still classified as a “have-not” province.
This regional wealth transfer works because the Liberals don’t need any MPs from the West to form government. Together, Ontario (121) and Quebec (78) have 199 seats in the House of Commons. A party needs 170 seats to form a majority government. When the Liberals take two-thirds of the seats in Ontario and Quebec — which they did in 2015, 2019 and again last month — and then you throw in 24 of Atlantic Canada’s 32 seats — they have what you need to stay in power.
The structural changes that Alberta needs to get a “fair deal” will only come from the bottom up — that is, through a challenge by the Alberta government. And now is the time. Despite 12 consecutive deficits and over $100 billion in new debt, Alberta is still classified as a “have province.” With unemployment still over eight per cent, more people are now leaving Alberta than arriving. One third of Calgary’s downtown office towers are empty. This hasn’t happened since the 1980s, when Pierre Trudeau’s National Energy Program (NEP) destroyed Alberta’s economy — and people’s jobs, savings and homes — for the next decade. Keith Davey, the Liberals’ senior campaign strategist, succinctly summarized their strategy: “Screw the West. We’ll take the Rest.” It worked in 1980. And it’s been working ever since. And it will keep working until Albertans say, “No more.”
Which brings us to the October referendum to abolish the federal equalization program. Now is the time to say this is simply unacceptable. Based on the Supreme Court’s 1987 ruling in the Quebec Secession Reference, if Albertans vote a “clear majority on a clear question,” then Ottawa and the other provinces have “a duty to negotiate” with us. Oct. 18 is Albertans’ opportunity to send a clear message that we no longer accept watching billions of our tax dollars leaving Alberta never to return.
Skeptics are quick to point out that there is “no guarantee” that these negotiations will bring any change. Of course there is no guarantee. No one has ever said there is. But ask these know-it-alls, what is their alternative? Sit back and do nothing? Send a message to the rest of Canada that the status quo is just fine? If this is the message, then Alberta will become not only a have-not province, but a has-been province.
Securing Alberta’s future starts with a big Yes majority on Oct. 18 — Yes to remove equalization from Canada’s constitution. Keeping billions of our own tax dollars here will benefit all Albertans — public sector and private sector, owners and workers, urban and rural, young and old.
Now it’s time for all of Alberta’s political leaders — UCP and NDP, along with all the candidates in this year’s municipal elections — to step up and urge their supporters to vote Yes on Oct. 18. This is not a left-right, partisan issue. A clear majority is a win for all Albertans.
Ted Morton is an executive fellow at the School of Public Policy, a former Alberta minister of finance and a co-editor of the recently published book, Moment of Truth: How to Think About Alberta’s Future.