Fact Check: Equalization is an important issue for Albertans

In a column for the Calgary Herald, Rob Breakenridge makes the case that Albertans are too fixated on equalization and should direct their attention elsewhere. He is correct in that many people misunderstand the program and believe the province pays directly into it. He is also correct in pointing out how the program is unlikely to change under the Carney administration. This doesn’t mean the issue doesn’t remain important to Albertans or that they should stop advocating for its reform or removal, though.

The reason equalization has remained a thorn in Alberta’s side for decades is that it is the most blatantly unfair of federal programs. The formula is rigged to benefit Quebec through exemptions for their power generation revenue, while ensuring Alberta is never a recipient of benefits. Alberta’s economy has taken several economic hits since the 1970s, which were catastrophic for citizens, yet somehow not a penny in equalization came to its aid.

When measured as a pool that provinces pay into even if the taxes go into general revenue before being dedicated to equalization, estimates put Alberta’s blockulative net contribution in the hundreds of billions over recent decades, with projections of hundreds of billions more in coming years. When Alberta is struggling to keep up with infrastructure and provision of core services, it would be irresponsible not to point out where the province is being shortchanged within the transfer system.

Even federalists should be looking at ending or reforming equalization. Like any other welfare program, it provides a disincentive to recipients to improve their economic condition. Quebec has shut in m***ive natural gas resources rather than develop them, and much of the reason was that its equalization revenue could be clawed back if it started selling gas. The program is a perpetual handout rather than a hand up, and it shows with the provinces that have always collected it with no end in sight.

The 2021 referendum demonstrated a clear political mandate among Alberta voters for change on this file. Albertans have demanded the government advocate against the program, and the government should do so.

The government can walk and chew gum. Keeping pressure on equalization is not mutually exclusive with pursuing changes to the many other programs that are tilted unfairly toward the eastern half of the country. 

Equalization is an inherently unfair program that puts Alberta at a disadvantage, and it has become a symbol. It infuriates Albertans and exposes the imbalanced nature of Canada.

Which is why federalists would rather we just stop talking about it.