Share this Story: Morton: Alberta's equalization referendum will start dialogue on Canada's future
Morton: Alberta's equalization referendum will start dialogue on Canada's future
Ted Morton
Feb 27, 2021 • February 27, 2021 • 4 minute read • 79 Comments
Albertans will likely be able to vote in an equalization referendum in this fall's municipal elections. Photo by Gavin Young /Calgary Herald file
Everyone saw Alberta's bad news budget this week — another huge deficit and our net debt now surpassing $100 billion. (Hard to believe that only 16 years ago we were debt-free.) What Albertans did not see is that Ottawa's equalization program will still be treating Alberta as a "have province," which means we will be paying rather than receiving. The equalization budget for 2021 is projected to be just over $20 billion, and, as usual, Quebec will be receiving two out of every three of those dollars.
What's new is this. We now have learned that over the last decade, as Alberta's debt spiralled to previously unimaginable levels, Quebec has socked away $11.6 billion in a newly created Generations Fund "with the goal of reducing Quebec's debt burden." Yes, that would be the same Quebec that, with a big assist from the Trudeau Liberals, blocked the construction of the Energy East pipeline.
Morton: Alberta's equalization referendum will start dialogue on Canada's future Back to video
In the coming weeks, we will endure (yet again) claims and counter-claims that the UCP budget is short-changing nurses, teachers, civil servants, cities, municipalities, universities … the list goes on and on. Welcome to Alberta's new normal. And remember that families in the private sector have already been living here for the past six years.
But rather than fighting with each other over how to divide our fast-shrinking fiscal pie, we should focus on growing the pie. And that means focusing on the real source of our downward fiscal spiral — Ottawa, and the billions of dollars that the federal government takes out of Alberta each year.
In the five years after the Trudeau Liberals won a majority government in 2015 — five years during which Alberta racked up $44 billion in new debt — the net fiscal transfers out of Alberta were $90 billion. As I've written before, the problem is not that we don't pay enough taxes. The problem is that our tax dollars don't stay in Alberta.
That's the bad news. The good news is that we soon have the opportunity to do something about this. Premier Jason Kenney has promised to hold a referendum to give Albertans the opportunity to send a message to Ottawa. The referendum will be held this coming October in conjunction with the municipal elections. The referendum question should be simple and to the point:
"Do you support the removal of Section 36, which deals with the principle of equalization, from the Constitution Act, 1982?"
This is the wording recommended by the Fair Deal panel. A strong majority in favour will not in itself amend the Constitution, but it sets the stage for a legislative resolution proposing the repeal of Section 36. The federal Constitution requires a resolution adopted by the provincial legislature to initiate amendments, but Alberta law requires first allowing Albertans to have their say by way of referendum. The latter gives moral force to the former: Albertans have spoken! In its 1998 Quebec Secession Reference, the Supreme Court ruled that when any "participant in Confederation" passes an amendment resolution — which "may … take (its) cue from a referendum" (as in Alberta) — there "is an obligation on all parties to come to the negotiating table."
The usual skeptics will be quick to point out that there is no guarantee that either Ottawa or other provinces would agree with Alberta's proposal to remove equalization from the Constitution. Of course, there is no guarantee. But what is the alternative? Sit back and do nothing? Just say there is nothing unfair with the status quo? Nothing wrong with Albertans continuing to be drained of billions of dollars a year, running up deficit after deficit, while one of the receiving "have not" provinces is socking away billions of dollars a year into a hitherto secret savings account?
Neither I nor any other proponents of this referendum have ever said that it would automatically end the equalization program. We have been clear that its purpose is, first, to send a strong message that Albertans no longer accept the status quo — what Quebeckers so accurately call " profitable federalism "; And secondly, to force federal-provincial negotiations about how to craft a fair deal for Alberta.
These discussions must not be just about equalization. There must also be polite but frank discussion about how the same province that has benefited the most from equalization and transfers — $497 billion into Quebec since 1960 — is also the province now leading the campaign to landlock western Canadian oil and gas. If Quebec wants to continue to benefit from federal transfer programs, will it now start supporting the province and the industry whose wealth creation has made these transfers — $630 billion out of Alberta since 1960 — possible?
Derek Burney, Canada's former ambassador to the United States, has written that the future of the western Canadian oil and gas industry depends on economically competitive access to global markets and global prices. In other words, the future of the Alberta that the last three generations of Albertans have built depends on new export pipelines.
At the time the Energy East pipeline was cancelled, one of the reasons given was that with the anticipated completion of Keystone XL, Energy East would no longer be needed. Well, Keystone is now dead. Where do we go from here?
A Yes vote in the October referendum will be a win-win for all Albertans — public sector and private sector, owners and workers, urban and rural, young and old. It will start a much-needed dialogue. A dialogue not just about equalization, not just about Alberta's future, but also Canada's future. As former Alberta premier Peter Lougheed used to say, a strong and prosperous Alberta makes for a strong prosperous Canada. We need to get this message out. Now is the time.
Ted Morton is an executive fellow at the University of Calgary's 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.
Family terrorized after violent home invasion targets wrong address