This is a critical time for Canada’s economy as well as national unity – the relationship between Ottawa and Alberta at the centre of both challenges. To generate the political will for the reforms needed to make Canada unified and prosperous again we need Canadians to understand the relevant facts. This is Fairness Alberta’s mission.
To recover from this COVID-induced jobs and fiscal crisis Canada will need all provinces as productive as possible. Canada’s productivity gap is longstanding but has never threatened our future more. Not only is our technological age unique, but the global economy is in a self-imposed hibernation and when it wakes it will no doubt quickly change.
Canada’s government has an obligation to focus on restoring our prosperity: without it we will be overmatched by any and every global challenge. Alberta has been by far the most productive province for decades, generating jobs for Canadians and filling federal government coffers. Stats Canada data shows that from 2007-2018 Albertans paid $240 billion more in taxes than the federal government sent back in transfers, benefits, infrastructure, and other programs and spending.
That works out to an average of $5,000 per Albertan, or $20 billion – every year. For a sense of the magnitude of this, the only other net contributors from 2007-2018 were Ontario, at $98 billion, and B.C., at $55 billion. The rest of Canada took a net $432 billion more in Ottawa spending than they paid in taxes; this was only possible because Ottawa taxed Albertans $240 billion more than is spent on Albertans.
Now, however, future of the golden goose is looking increasingly bleak. Global energy prices have struggled since 2015 (and plummeted with the Russia-OPEC price war). Investment has nevertheless been strong in many U.S. states, and Russia is bullishly growing its industry to fuel the rapidly expanding Asian market. Canada, in contrast, has witnessed such capital flight that downtown Calgary has record office vacancies and lost its rush hour traffic long before COVID-19.
Our deteriorating investment climate now faces the spectre of a $170 carbon tax compounded by a “Clean Fuel Standard,” and numerous additional barriers to new industrial developments. Even with these challenges, Albertans still contributed a net $18 billion in 2019, and oil and gas exports surpassed all others in Canada at $102 billion. In other words, the golden goose is hardly dead, but it is far from its egg-laying potential at a time Canada is starving for eggs.
It is unfair that Albertans have contributed so much to Canada yet get so many barriers to future prosperity in return. Whatever short-term political gains these barriers serve, they necessarily feed nascent movements towards independence. It is also the kind of counter-productive policy that Canada can ill-afford given the global economic crisis and massive deficits we face.
Despite all this background, some leading commentators insist there is nothing really unfair about this – that Albertans simply pay more taxes due to higher incomes, and Alberta gets its fair share back. This ignores how broadly and deeply federal scope creep has intruded into provincial jurisdiction – half of federal spending is for constitutionally provincial responsibilities. While it is fair that higher incomes pay more taxes, it is the size of the federal budget bill and their spending choices which decide Alberta’s net contribution.
Others point to the hundreds of billions in debt-financed federal pandemic spending (like CERB and CEWS) and suggest it is vindication for federalism. Dr. Trevor Harrison of the Parkland Institute in a Jan. 28 column “Federal government has had Albertans’ back during COVID” points to analysis showing in 2020 that Albertans got $1,200 more in pandemic wage and employment supports (combined with the funds for well cleanup) than any province. This initially sounds compelling until you consider the central fact laid out above: Albertans sent a net $5,000 per person from 2007-2019, every year.
It is Albertans who have clearly had Canada’s back. It’s fair, and also clearly in Canada’s interest, to ensure policies at every level of government support Alberta’s economic recovery. Ignoring this imperils both the economic future of our children, as well as Canada’s future as a federation of ten provinces.
Bill Bewick, Ph.D. is the executive director of Fairness Alberta – a non-profit and non-partisan group dedicated to raising awareness across Canada of Alberta’s contributions and barriers. To learn more, visit fairnessalberta.ca.