Ganging up on Alberta’s polluting oilsands is becoming a national sport and it’s on full display for the world in Copenhagen.
But what would the country look like if the cash flow pumped from the Western oil patch was suddenly turned off?
With climate change now morphing into a national-unity issue, angry defenders of Western oil argue that the provinces doing most of the environmental finger-pointing — namely, Ontario and Quebec — can only afford their own social programs and tax rates thanks to the gooey Alberta cash cow they love to disparage.
Alberta’s premier says his province’s oil-rich economy provides the rest of the country with about $21 billion — which, by way of comparison, is more than all of Canada’s $18-billion defence budget, and about half of what Ontario spends on health care.
It is also a key driving force behind the federal equalization program, which transfers more than $8 billion a year to Quebec.
That $8 billion equalization cheque is equivalent to five years’ funding for Quebec’s cherished $7-a-day daycare program, and is almost twice the sum Quebec has slapped on the table to buy New Brunswick’s power utility.
Many contend that curbing Alberta’s oil production would siphon much-needed cash from the bank accounts of the so-called “have-not” provinces.
“The costs to these provinces might be a lot larger than they imagine,” warned Robert Mansell, an economist from the University of Calgary.
“It’s been the one thing that’s brought a lot of money into the country and spread it around fairly widely.”
Six provinces are set to receive about $14.2 billion in equalization payments this year. For 2009, the formula will funnel about $8.4 billion to Quebec, $2.1 billion to Manitoba, $1.7 billion to New Brunswick, $1.6 billion to Nova Scotia, $347 million to Ontario and $340 million to Prince Edward Island.
The purpose of the payments is to ensure the country’s less prosperous provinces can provide citizens with services that can be reasonably compared with those offered by the others.
Despite Alberta’s financial support, Quebec and Ontario have taken public shots at the province’s oilsands development during the Copenhagen summit.
Both Quebec Premier Jean Charest and Ontario Environment Minister John Gerretsen refuse to let their provinces carry the load for bigger polluters, like Alberta and Saskatchewan, when it comes to meeting emissions goals.
“If they (the oilsands) are developed there may have to be larger greenhouse gas emission (cuts) elsewhere in the country in order to meet our overall targets,” Gerretsen said.
Alberta Premier Stelmach shot back Wednesday in a public letter and television interview, warning the have-not provinces not to bite the industry that feeds them.
“Perhaps the most frustrating part of this all was the finger-pointing by Quebec and Ontario,” Stelmach told CTV Edmonton. “If this leads to really killing Alberta’s economy who is going to support the programs in other provinces?”
He said Albertans spend more than $21 billion in financing the other provinces.
Remarkably, Stelmach’s argument showed signs Thursday of breaking through.
Alberta’s position has even received some sympathetic coverage in Quebec, which is the province most supportive of tough climate-change targets.
Public discourse here rarely touches on equalization and the subject is generally ignored except for when have-not provinces are at the federal bargaining table, seeking a richer deal.
But it has generated some attention this week.
Several prominent public commentators in Quebec explained that la belle province benefits from Alberta’s oil revenue through equalization payments.