It didn’t take Danielle Smith long to start complaining about Quebec when someone challenged her about education funding here in Wild Rose Country at her recent Gilead Next* town hall meeting in Fort McMurray last week.
Pardon me, I should have said Alberta Next, although the way things are going with the premier’s forced self-censorship policy for school libraries, it would now be a fair comment to refer to this province as Gilead North.
Before Alberta is flooded by a post-long-weekend tsunami of distracting announcements by the United Conservative Party and your faithful blogger disappears for a vacation, let’s take a closer look at what Ms. Smith had to say at that moment in Fort Mac, which despite the government’s ongoing effort to pack these separatist town halls with friendlies was attended by fewer than 250 locals, not all of them on side.
When a questioner wanted to talk about Alberta’s crowded classrooms and lowest-in-Canada per-student funding, and couldn’t be deterred by Bruce McAllister, the former Wildrose MLA and Smith loyalist who acts as emcee of the Alberta Next propaganda forums, an obviously annoyed premier quickly slipped into a rant:
“… What we’re talking about tonight is Ottawa over … Do you want to hear the answer?” she barked at her interlocutor, “… is Ottawa over-taxing us!”
“That they, we, our, our, our program costs are 70 per cent of all tax dollars. We only collect 40 per cent, Ottawa collects 60 per cent. And then, they use political means to transfer it. Alberta, year after year, has 20 to 25 billion dollars that is siphoned out of our system to go to Ottawa so that it could be spent – mostly in Quebec, but also in other places that vote Liberal. We have been watching this, for years. Six hundred and fifty billion dollars in the last 40 or 50 years that have been taken out of this province! You don’t think we might be able to do a little bit more on social spending if those 20 to 25 billion dollars stayed here? You don’t think we’d be able to cut taxes a bit if those 20 to 25 billion dollars stayed here? It is 5,000! Dollars! Per! Albertan! that every single year gets transferred out of this province for political reasons so that the Liberals can continue to spend it in places that vote Liberal. That is, that is what is happening in the province!”
This exchange, featuring Ms. Smith’s shouty delivery, has been played many times on social media. It can be watched here from a couple of views – including one that shows University of Calgary economist and panel member Trevor Tombe suffering through the premier’s tendentious speechifying.
Actually, though, if you’re looking for a pretty good explanation of how things really work, Dr. Tombe provided a partial one long before he unwisely joined the panel.
“What’s behind the redistribution?” he asked in 2020. “It’s fairly simple. …” (Remember, almost all equalization funding comes from taxes, not from provinces, a fact that even Ms. Smith now occasionally concedes.)
“High-income regions have more high-income individuals and businesses,” the professor explained. “These individuals and businesses unsurprisingly pay more in income taxes. They also buy more stuff, and therefore pay more in sales taxes and various excise taxes. In addition, higher income regions in Canada also tend to be younger (Alberta especially) and therefore receive fewer payments out of Old Age Security, Guaranteed Income Supplements, and various other income supports targeting elderly individuals. Finally, while high-income provinces generally don’t receive equalization payments from the federal government, poorer ones do. However, as we will see, equalization’s role in fiscal redistribution is often overstated, particularly in Alberta.” (Emphasis added.)
“Alberta provides a good example of why higher-income provinces wind up sending more money to Ottawa, mostly through their federal taxes.** … If a province accounts for an above-average level of revenues per capita or accounts for a below-average level of expenditures per capita, then a ‘fiscal gap’ will exist. Positive gaps mean a fiscal outflow of the province and negative gaps mean a fiscal inflow. For Alberta, most categories are positive.”
Thank you, Dr. Tombe.
What’s more, as Ms. Smith often does, she was speaking out of both sides of her mouth. What are the chances tax money paid by Canadian residents of Alberta would end up in social programs here when our government vows revenue will remain so low we can barely keep the lights on every time the price of oil declines?
And surely she of all people understands that many Albertans flee the province the moment they retire for more salubrious locations in the province to the west.
Earlier in the Fort Mac meeting, Dr. Tombe made an interesting observation about Quebec’s hydroelectricity revenues, with which Ms. Smith nodded agreeably.
If you wanted to improve Canada’s equalization program, Dr. Tombe expounded, “some small changes in how we treat hydroelectricity revenues, which are very important in Quebec, can have a very, very big change. Just to illustrate magnitudes here, if Quebec’s power prices were two cents a kilowatt higher, and they would still maintain the lowest power prices two cents a kilowatt higher, and we didn’t fix the size of the equalization program as we do now, then Quebec’s equalization payment would fall by about $4.2 billion this year.” (Emphasis added again.)
Isn’t this very much the argument that can be made about Alberta’s tax revenues, which are kept so perversely low they contribute to this province’s perennial boom and bust economy?
If Alberta refuses even to discuss implementing a sales tax or minimally raise existing taxes to levels that would still be the lowest in the nation in order to provide basic essential services enjoyed by all other Canadians – say, COVID-19 vaccinations – how can we expect other provinces to take us seriously when we make similar complaints about their revenue streams?
The less that is said about the subsequent Gilead Next town hall in Lloydminster the better, I suppose.
There were big cheers for Donald Trump-style mass deportation, according to The Canadian Press. Sounds as if the UCP got their base out for that one.
“I’d like to change all these questions instead of ‘Should Alberta,’ to ‘Alberta should’,” former Wildrose MLA Rick Strankman told the 350 or souls in attendance. Mr. Strankman, alert readers will recall, once expressed the view that the NDP government’s carbon levy was roughly the equivalent of Stalinist policies that led to the starvation in the Soviet Union during the 1930s.
Embarrassing.
*This is a literary reference to a book by a respected Canadian author. Readers unfamiliar with what it implies and why it’s in the news are encouraged to look it up.
**That is, I’m pretty sure Dr. Tombe meant, residents’ federal taxes.
Fact are not really what the Alberta next tour is about. The tour is intended to stoke anger and strengthen the separatist cause. Smith can then blackmail the rest of Canada the way she claims Quebec does. Many in Alberta want to be angry at the east and she is playing to them.
I’m afraid we do blackmail the rest of Canada. We are responsible, perhaps, for the inevitable failure of this nation.
Yeah right. You are all a bunch of babies. We live in paradise in Canada. Go visit one of your hated provinces on your next vacation and you will see. Then look south to the US and you will see again. Then look at Gaza and you will feel very guilty for complaining. Great article though. Cuts through the trumpy reality manipulation that the current Alberta premier engages in
Marlaina strikes a pose and sees…..Skippy after being mic dropped by Sean Fraser… No?
She’s talking about how chemtrails start off ?
( memes abound)
It absolutely never fails to amaze me when her and Skippy start on about immigration. According to their “standards” of ideal candidates, neither one of their parents would have qualified to come into the country. The hypocrisy is only outweighed by the gaslighting.
“Alberta should fire the Corrupt Care Premier and her band of of taxpayer funded henchmen.”
So, don’t forget to pack your Sou’wester, enjoy a well deserved holiday. Thank You!! for keeping us going through the sludge. Take Care!
Many people are saying Albertans will love living under his eye.
“Propaganda must not investigate the truth objectively . . . it must present only that aspect of the truth which is favorable to its own side. Such being the case, all effective propaganda must be confined to a few bare essentials and those must be expressed as far as possible in stereotyped formulas. These slogans should be persistently repeated until the very last individual has come to grasp the idea that has been put forward.”
And so, at the same instant when its mouth opens the little door in its forehead also suddenly opens and out springs the wild obsessed loon that everyone else, except the faithful who see the fetish/ idée fixe as a feature and not a bug, knows is there. The secret is out and has been for a long time and it appears that the loon is being left in the dark not only because of a woeful lack of personal insight. The deadpan look on Trevor Tombe’s face speaks volumes.
Holobshi– Marlaina/UCP and Pinocchio Pierre are all as Dido would say, just a bunch of dornay banyaks .If they had to stop lying, you wouldn’t hear a word out of them.
La Kookaracha says, ““And you know, like, I have some limitations of what I can do in my job. I don’t know that I don’t have much power if that is the case, that the U.S. Department of Defense is (doing it).” Yes, the chemtrails are responsible for both global warming and turning people gay. Oops, wrong audience, or maybe not.
“Did we turn into part time Tiktok rage farmers to stir up as much fear and loathing . . . as humanly possible?” Yes and yes. It is the characteristic tendency, the modus operandi.
The deadpan Trevor Tombe obviously wishes he was sipping something stronger than water, if only to lessen the insufferable pain, thinking that, “I wish to God that some magician would exorcize her, for as long as she’s here on earth, hell itself must be just as quiet as a church.” [As above, “It can be watched here from a couple of views – including one that shows University of Calgary economist and panel member Trevor Tombe suffering through the premier’s tendentious speechifying.”]
Whatever will those UCP supporters do now that Alligator Alcatraz is shutting down, the people of Mexico are decorating the wall at the southern U.S. border with lovely murals (really), the American leader has gone AWOL, his former lawyer has been involved in a car crash and the pizza joints near the Pentagon are apparently doing brisk business? How about the Venezuela situation?
It could be eventful in the coming days and weeks Enjoy your holiday.
Marlaina is proud to spew her ignorant nonsense to the yokels because she knows none of them will bother to educate themselves with facts. She can’t really be that misinformed can she? Or is it that her lust for power and wealth override rational thought and common decency? Either way, even though she’s an incompetent buffoon, she’s still dangerous. Maybe she sees the success of the Forever Canadian campaign and is overcome with blind rage that her dream of Alberta becoming the 51st state is in jeopardy.
Yep you ndp supporters are everywhere
Smith was at her gas lighting best again. Other provinces fund their own schools and education, through their own taxes, which are higher than Alberta’s. There is no provincial tax money taken away from Alberta by equalization, not one dollar. Alberta chooses to have a level of provincial taxes that leads to problems in funding such programs, which are a provincial responsibility not the Feds, when resource revenues are not so high such as now.
Of course other provinces have some resources too, such as Quebec with hydro electricity. Unlike our resource revenue theirs is more stable, so perhaps they were not tempted to foolishly set their tax rates based on the hope of perpetually high energy prices.
If you wonder why Smith is so shouty and cranky now, it is because she won the last election mainly due to high energy prices and dislike of Trudeau. Both are gone now and neither are likely to return. So I suspect her best hope is to find a new scapegoat, before more start to blame her for Alberta’s current problems. I suppose Quebec remains a possibility for her to sell as this to the gullible.
Smith does carry on about Quebec. News flash, Quebec may have better deals because their politicians are better at their jobs. They are laser focused on their province and ensuring they can get the best deal around. Other provinces let other things get in the way and they get side tracked. It is doubtful the Liberals will be handing out more cash to Smith. She just wastes money, low royalties for oil companies, no sales tax, and no fines or demands for money to deal with the “orphaned” wells.
Back in the late 1970w and early 1980s, found the Quebec politicians were focused on getting the best deal for their members. They actually worked at things they wanted.
The fiscal imbalance gets talked about in other provinces too. It’s not just Alberta.
Of course. It’s been a bone of contention, approximately since the day Confederation was approved. Now it’s just another stick to whack the Feds with, at the annual gripe-fest between the Premiers and the Prime Minister.
I am loath to restate the entirety of my previous comments on this blog with regards to Alberta’s financial position within confederation but this long standing obsession with Quebec getting a “better” deal goes all the way back to the founding of alberta, predated by the Manitoba schools question, the northwest rebellion; going all the way back to upper and lower Canada, the plains of Abraham and Wolfe and Montcalm.
This is why I hate alberta separatists, they are ignorant of Alberta’s history, Canadas history, or our place within that context: this has always been about French and English or Protestant and Catholic depending on how you look at it and ALBERTA WON. We fought the federal government for literally decades for the “right” to the significant resources here without the responsibility of equality for French and English and they absolutely caved.
This is why everyone calls us the poor little rich kid of confederation. We already won, and now we are complaining about having to pay our federal taxes !?!?
it’s nonsense, we didn’t secede from Ottawa, they CREATED US FFS. We don’t get to keep that money because EVERYONE PAYS FEDERAL TAXES.
Stop being such a whiny little crybaby Danielle, it’s so embarrassing my eyes are going to roll out of the back of my head, go on vacation to BC, see how nice it is there and NEVER COME BACK.
Premier Smith: “Alberta, year after year, has 20 to 25 billion dollars that is siphoned out of our system to go to Ottawa so that it could be spent – mostly in Quebec, but also in other places that vote Liberal. We have been watching this, for years. Six hundred and fifty billion dollars in the last 40 or 50 years that have been taken out of this province! You don’t think we might be able to do a little bit more on social spending if those 20 to 25 billion dollars stayed here? You don’t think we’d be able to cut taxes a bit if those 20 to 25 billion dollars stayed here? It is 5,000! Dollars! Per! Albertan!”
1) Smith’s numbers are off. So is her argument.
$650 billion dollars in the last 40 or 50 years (why so imprecise?) amounts to $13 – $16 B on average per year. Not $20 – $25 B.
Out of context, sounds like a huge sum. Federal government expenditures (2007-23 inclusive) averaged $339 B per year. Federal government expenditures for the 2024–25 fiscal year was $538 B.
In 2023, Alberta’s net outflow of $14.8 B amounted to 3% of the federal budget.
Far more problematic is Smith’s arguments and logic.
Wealth redistribution from wealthy taxpayers to those less well-off is the fundamental feature of our progressive taxation system. No surprise that there is a net outflow from wealthy “have” provinces to “have not” provinces. A feature, not a bug.
The fact that Alberta sits on top of oilsands is a geological accident. Much as Premier Smith would like to take credit for Albertans.
Yes, Alberta taxpayers pay more in taxes than the province of Alberta receives in federal spending. So what?
All that means is that Albertans are relatively well off.
Likewise, in a province of a dozen billionaires, taxpayers would pay more in federal taxes than their provincial government gets back in federal spending. Even so, most federal tax dollars flow from the far more numerous wealthy taxpayers elsewhere.
No one would argue that these dozen billionaires prop up Confederation. All we can say is that rich people account for a high proportion of the province’s population.
Likewise, Alberta does not prop up Confederation. Nor are Alberta taxpayers unduly burdened by equalization payments. There are far more rich taxpayers OUTSIDE Alberta contributing far more dollars to federal coffers.
Alberta taxpayers contribute 14 cents on the federal tax dollar. The other 86 cents flows from taxpayers outside Alberta. (2023)
Which is more: 14 cents or 86 cents?
Right-wing bean-counters say Alberta’s 14 cents matter more than the RofC’s 86 cents. Absurd.
Canada’s top 1% of income tax filers contribute 22% of taxes (federal and provincial). One percent of Canadians pay a fifth of all taxes. More than all Alberta taxpayers do (14%). (2022)
Canada’s top 10% of income tax filers contribute 55% of taxes (federal and provincial). Just over half. Over four times the amount paid by all Alberta taxpayers, a slightly larger group.
It’s Canada’s top 10% that props up Canada and pays for Confederation — and most of them don’t live in Alberta.
Hard to argue that Albertans largely fund transfers including (Quebec’s) equalization payments when 86% of the funds come from taxpayers in other provinces.
If Alberta secedes, Canada carries on with 86% of its revenues.
End of argument.
2) Effectively, Albertans are subject to the same tax rates as other Canadians from coast to coast. Canadians earning $100,000 pay the same federal taxes whether they live in Vancouver, Calgary, Winnipeg, Toronto, or Halifax. No unfairness.
When it comes to federal taxes, there is no Team ALBERTA or Team ONTARIO. If you like, there is Team RICH and Team ALL THE REST. Team RICH pays the freight for Confederation. Our progressive tax system distributes income from the rich to the less well-off.
All wealthy taxpayers are net contributors. They pay far more in taxes than they receive back in household transfers, government programs and services.
Most of those wealthy taxpayers live outside Alberta. Most of their tax dollars are generated outside Alberta.
Alberta righties prattle about “net transfers”. More confusion. “Net” implies a two-way flow. No two-way flow here.
Federal transfer dollars to provincial governments flow mostly from wealthy households and profitable corporations to Ottawa — and back out again to provincial governments (e.g., Canada Health Transfer, Canada Health Transfer, Equalization) to pay for programs and services for the entire population.
From taxpayers to Ottawa back out to provincial governments. Separate entities. Two one-way flows. No “net” transfers.
Alberta is not a net contributor to federal coffers. The Province of Alberta (i.e., the government) does not send a cent to Ottawa. The Province of Alberta is only a recipient.
3) Finally, federal and provincial government revenues are two separate streams.
Provinces do not pay federal taxes or contribute to equalization. EQ is funded from the federal government’s general revenues. Taxpayers, not provinces, contribute to federal coffers. Taxpayers, not provinces, fund equalization. Rich Canadians and profitable corporations, wherever they reside, contribute the bulk of federal revenues.
The Alberta Government does not send a cent to Ottawa. Not one cent flows from Alberta’s coffers via equalization to Quebec or other have-not provinces.
The flow of federal tax dollars to Ottawa has no effect on Alberta’s provincial coffers. Two separate revenue streams. The Alberta Government sets its own tax rates. The Alberta Government also sets its own royalty rates, and can capture as much resource revenue as it sees fit.
Whereas Quebec makes good use of its fiscal capacity with high tax rates and a provincial sales tax, Alberta chooses lower tax rates, no provincial sales tax, and low royalties — and relies upon roller-coaster natural resources revenues for around a quarter of its budget.
“Who pays: The federal government. Equalization is not a transfer of income between provinces (although in other countries with federal systems and equalization, there are such transfers). In Canada, however, equalization is simply one of the ways Ottawa spends the money it collects in taxes and other levies. SO, WHEN SOMEONE COMPLAINS THAT THEIR PROVINCE – OFTEN ALBERTA – IS PAYING OTHER PROVINCES THROUGH EQUALIZATION, THAT IS DEAD WRONG. But it is true that high-earning Canadians tend to pay more in taxes, and more of those high-end taxpayers live in the richer provinces.” (Globe and Mail, 2021)
“How Alberta’s shrinking economy could shake up the billions Canada spends on equalization” (Globe and Mail, Feb 26, 2021)
Equalization complaints from Alberta CONservatives are just a distraction from decades of conservative government mismanagement.
That is what I thought and a very good explanation for the alleged fiscal disparity of Dani Smith.
By the way, BC’s basic income tax bracket is just slightly over 5% versus 8% in AB and incomes greater than 100 grand are taxed less than in BC. Apparently only 11% of AB income tax revenue comes from earners making over 100 grand.
“If you wanted to improve Canada’s equalization program, Dr. Tombe expounded, ‘some small changes in how we treat hydroelectricity revenues, which are very important in Quebec, can have a very, very big change. Just to illustrate magnitudes here, if Quebec’s power prices were two cents a kilowatt higher, and they would still maintain the lowest power prices two cents a kilowatt higher, and we didn’t fix the size of the equalization program as we do now, then Quebec’s equalization payment would fall by about $4.2 billion this year.'”
I challenge Dr. Tombe’s argument.
First, armchair pundits frequently claim the equalization formula omits Hydro Quebec revenues. This is incorrect.
The issue is Hydro Quebec’s low power rates, reducing Quebec’s nominal fiscal capacity.
If Hydro Quebec can generate power for lower cost, why should it charge its customers more? Reversely, why should Hydro Quebec charge its customers the Canadian average power rate when it can supply power at lower cost?
What about the free market and competition? Are solar power generators obliged to charge the same as their coal or fossil gas competitors?
Red herring? Low power rates attract more industry to the province, boosting the province’s fiscal capacity.
Lower power rates generate more economic activity and tax revenues. It could be a wash, or even in Quebec’s fiscal favour.
I think its time to put the final nail in the coffin of Trevor Tombe’s reputation. If he had any class, dignity or credibility (all of which he put into question by joining this travelling circus) then the equalization argument in Ft Mac would have been the perfect time for him to jump in and not only question Fraulein Schmidt’s numbers but publicly challenge her understanding of how federal equalization actually works. Instead he just sits there night after night with that stunned dumb look on his face, not contributing anything of note. It’s clear by now that Tombe is just another UCP lapdog, waiting for his pat on the head.
Quoth Performative Queen Danielle: “That they, we, our, our, our program costs are 70 per cent of all tax dollars. We only collect 40 per cent, Ottawa collects 60 per cent.”
Never mind the stutter. She’s just, just, really mad at being knocked off her memorized script. What truly bothers me is the alleged percentages in her rant. If “program costs” are 70% of Alberta’s “tax dollars”, what the heck does that signify? 30% of “tax dollars” are not spent on programs? On what, then? Wages and salaries? Propaganda efforts and dog-and-pony shows?
What’s with the 40% collected by Alberta and the 60% collected by Ottawa? And the claim Ottawa uses “political means” to “transfer” the money. Of course Ottawa uses political means! For God’s holy sake, that’s what governments DO! That’s what governments are supposed to do. Except that Ottawa doesn’t spend on the things (mostly oilpatch “loans,” separatist propaganda and book bans) Smith would prefer.
And FWIW, Smith’s arithmetic is bogus. 650 billion over “40 or 50” years is not “20 to 25 billion a year.” It’s 13 to 16.25 billion per year. Yeah, and $25 billion divided among five million Albertans is $5,000 per person. Since it’s never been as high as $25 billion per year by Smith’s own numbers, and tax revenues depend on two factors—that’s wages and working population—it ain’t likely it’s ever been $5,000 apiece unless maybe in the boom years. And, if, repeat, underscore, IF you believe Smith’s numbers, maybe this last couple o’ months, too.
But these are quibbles. I’m pretty sure that Smith pulled all those numbers out of her asset. Still, it’d be fun to find out if there’s any basis other than Smith’s fevered imagination for any of it. FOIP request, anyone? We can start a pool on how long it’ll take to get the first non-answer. I call November 2027.
Oh, and about social services. We can argue about WHAT governments spend on, and why. But I don’t for one millisecond believe that Smith and her Utterly inCompetent Party would spend one penny more on social services.
Okay but hang on a second. We (in Québec) have got a completely unique way of operating, that arguably is particularly adept at forwarding our ( “our”) own agenda. We have made secular/atheist government a hegemony; we pour millions into claiming our culture is defined by language; we focus on the collectivity, not the individual; and we cannot for the life of us keep highways smooth. We are very like France in our victimy herd politics (“Que fait le gouvernement!?”) and we have an extremely pedantic, efficient and propoganda-laden department of education. In many ways, these things run contrary to Canadian values. In many ways, we really are on the take among provinces. In many ways, we are and should be ashamed of our troublemaking place in the confederation. Alberta has every right to point to us as the source of its inequality. Trying to spin this as some kind of right-wing blame game is, sadly, an oversimplification.
I could go on and on and on about all the ways that you are incorrect, but the long and the short of it is that quebecois politics is largely a reaction to the original deal of confederation; equal rights and funding for both French and English institutions was abandoned as soon as Manitoba joined the party which lead to the protracted decades long conflict alberta fought with the federal government to explicitly deny French Canadians equal rights. (This is the one I referenced in my precision comment) They literally had a series of wars on the prairies over this, they executed a senator. Dunno if you heard of this guy, Louis Riel.
Does someone have kompromat on comrade Tombe? Why would he allow his well earned reputation to be thrown in the trash. You should be ashamed of yourself Trevor, I’ve never agreed with all that you say about economics, but I’ve always respected you. For whatever reason you’ve signed on to this dog and pony show, you should resign, and fast.
Sure hope someone reminds her at the next town hall the current system of equalization was created when Someone named Jason Kenney was in someone named Stephen Harpers cabinet.
Dog and pony show? More like Fonzie and shark show.
I’ve said it before, and I’ll say it again here and now. The incessant whinging from Alberta about equalization has nothing to do with economics or the “fiscal imbalance” of Canadian Confederation. It’s anti-Québec bigotry.
Nobody — or at least, very few — objects to New Brunswick or Manitoba receiving equalization payments from the federal government. Only Québec gets the hate and the vitriol.
And, on top of that, the fact that equalization is based on fiscal “capacity”, and the fact that Alberta has been consistently and persistently underutilizing its fiscal capacity, on purpose, means that the economy here would have to tank to the point of 20% unemployment before we became entitled to receive it ourselves.
Dani divides and conquers……her only skill being deflection for the sake of her backroom handlers…..lets just give in and give them an authoritarian gov. so that they can take whatever and whenever they please…..or not…..anyway you slice it…..Alberta is getting screwed.
…and it ain’t Ottawa or Quebec……