Red Deer South MLA Jason Stephan said he’d like to see quicker action on the permanent homeless shelter project for the city. (Advocate file photo).

Red Deer South MLA Jason Stephan said he’d like to see quicker action on the permanent homeless shelter project for the city. (Advocate file photo).

Jason Stephan: Why I voted equalization should be removed

On Thanksgiving, I voted in the municipal election. It was very encouraging to see so many great men and women seeking to serve our community.

You also have the opportunity to vote on whether equalization should be removed from the Canadian Constitution.

I voted that equalization should be removed. My reasons are as follows.

What is equalization?

Section 36(2) of the Constitution Act, 1982 (Canada) states:“Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.”

The Act was enacted under Pierre Trudeau. Ironically, Quebec, the principal taker of equalization payments, refused to sign.

The Act does not specify how this principle of equalization is to be applied. Those important “details” are calculated under a “formula” determined by politicians.

Equalization could work if federal and provincial politicians consistently acted in good faith. But they don’t, many subordinating principles for power.

Equalization is abused and gamed

Since 1961, Alberta families and businesses have contributed more than $600 billion “net” into the Canada partnership, while Quebec took more than $476 billion “net” from it.

Quebec is the principal beneficiary of equalization; on a per capita basis, Alberta businesses and families are principal payors.

The Premier of Quebec says one of his favourite things about Canada is receiving equalization.

Over the last three years, Quebec received over $13 billion in equalization each year, Alberta received nothing.

The premier also says there is no “social acceptability” for Alberta pipeline. How are inbound oil tankers from dictatorships in the middle east, who contribute nothing to Canada, acceptable?

A suggested response by the Canadian Tax Federation is no more equalization for Quebec. They are correct.

What is more disappointing is that equalization is “gamed.”

Here is an example: State controlled Quebec Hydro provides the lowest power rates in all of North America to Quebecers at below market prices. This subsidy has resulted in Quebec having one of the highest per capita swimming pools in North America, including more than California – Quebec Hydro selling its power to heat those pools at deep discounts.

But as Quebec Hydro artificially sells power at under market, it reduces Quebec’s “fiscal capacity” in the billions, thereby increasing its share of billions in equalization payments from Alberta families and businesses. In essence, under equalization, Alberta families and businesses indirectly pay for, and subsidize, Quebec Hydro providing the lowest residential power rates to Quebecers in all of North America.

What will this referendum accomplish?

While individual partners may not unilaterally change partnerships, they should speak up when they are being treated unfairly. Likewise, while Albertans may not unilaterally change the Canadian constitution to end equalization, we need to speak up as we are treated unfairly.

The truth is that Canada is becoming a dysfunctional, rigged partnership. In the real world, this partnership would never survive. In the real world, Quebec would be kicked out of the partnership. If Quebec was Alberta, they would have left this partnership long ago.

How will Ottawa and Quebec respond when confronted with principled requests for fairness? Will they be principled and act in good faith, or will they respond with indifference or hostility? Forced to confront reality, will they seek to deflect, defer, or distort the truth?

Albertans will be watching, as their response to this referendum will reveal our partners for who they are.

This referendum is a step in the right direction

We must honestly confront the realities of our current circumstances.

Many Albertans are disappointed with the current Premier Jason Kenney. Recent polling numbers put his approval under 25 per cent. There will be a leadership review. Disappointment with the current leader of the United Conservative Party, or just believing a change in leader is for the best, should not be conflated with a referendum concerning principles of fairness. Our paramount loyalties are to principles and not to office holders.

It is perfectly reasonable to support principles of fairness and voting for the removal of equalization, while wanting to see a change in the leader of the party.

We need to protect ourselves. Alberta businesses and families should not be subject to unprincipled federal politicians, who have demonstrated that they will not hesitate to attack the livelihoods of Alberta individuals and families to further their political ambitions for power.

Canada is spending itself into oblivion, threatening to take Alberta down with it, adopting policies of economic self-destruction, undermining the capacity of Alberta businesses and families to provide for themselves and others.

What Canada was, is less important than what Canada is, and what it is becoming. When legal plunder displaces work as a ruling principle, a sustainable society is lost.

There is an urgent need for all of us, individually and in our families, to prepare more, to become more self-reliant. Voting to free Alberta families and businesses from funding billions in equalization payments is a small and simple step in the right direction.

Jason Stephan is the Red Deer South MLA.