18 thoughts on “Get the Facts: Equalization Payments

  • This is absolutely ridiculous! Where is the federal government when Alberta is clearly in a state that requires federal help and intervention? Seems to me we are just being left to hang in the wind. Where would this country be without Alberta’s contribution from the oil and gas industry and where is our government during this difficult time?

    • What the graphic misses is how much money Alberta will BORROW in order to fund the transfer payments to other provinces. It’s bad enough that we don’t “get” any transfer payments when our own economy is in ruins, but we are still expected to PAY, and since we have run a deficit ever since Ralph Klein’s departure, we have undoubtedly borrowed BILLIONS of dollars so that we could send that money east!

  • I think it’s about time Quebec gave some payments back!! Who are they to argue about Energy East and the bread and butter that they’ve received for years on the backs of Albertan’s! It’s time for Alberta and the Oil Industry to stand up to the Federal indecisive politics and Quebec’s whining! We need more Brad Walls!

  • Quebec: “We want sovereignty, we want our own identity, we want to separate from Canada” “…but we will gladly accept handouts”
    $10 BILLION!? Really?

    • You are absolutely correct

      It’s only 9.9 BILLIONs – When Quebec is independent, Who will be funding Quebecers then? – Hahahahahahaha

      Parasitic BEGGERS should accept what they get … Not impose terms and ask for independence !

  • Even more unfortunately for Albertans these transfer payments are a rolling 3 year average, so the pain will continue for our province for the next 3 years!

  • @Eric S
    There are three different categories of transfer payments:
    1.) Canadian Health Transfer – Maintaining a ‘national standard’ of healthcare
    2.) Canadian Social Transfer – Maintaining a ‘national standard’ of social programs (post-secondary, social assistance, social services, etc.)
    3.) Equalization Payments – The open ended category, equalizes the fiscal capacity on a per capita basis nationally.

    It is not a province to province transfer, the payments come from federal funds, the theory is to raise the floor – not lower the ceiling. If all the payments were abolished tomorrow Alberta would be no better off. If you earn $200k in Alberta you are contributing as much as if you made $200k in Saskatchewan or PEI – federal taxes.

    If you have the time and are so motivated there is a pretty comprehensive (85 page) look at the payment system below (including province by province breakdowns). If the idea is to ‘Get the Facts’ then it’s worth a read.

    https://business.ualberta.ca/Centres/~/media/business/Centres/WCER/Documents/Publications/155ElectronicApril2final.pdf

    • Alberta has paid 250 BILLION more into equalization, then it has taken out.

      While Jason is correct in saying that these are not direct payments, it still means Alberta has paid far more than all provinces but Ontario, and even there, Alberta has paid more than twice as much as Ontario, on a per capita basis.

      This is a paper on equalization. Fig 34 shows how much per capita On, Ab and BC contribute. Abs portion is 3672 per capita 1999-2008, which is MUCH higher than Ontario (1771) or BC (742).

      Fig 20 shows how many billions each has contributed since 1981. Note that I calculate that if Alberta had invested the estimated 250 billion paid into equalization, then its Heritage fund would be worth about 1 trillion, assuming no government decided to raid it. Just use this argument for those who say Alberta should follow the Norway model.

      https://business.ualberta.ca/Centres/~/media/business/Centres/WCER/Documents/Publications/155ElectronicApril2final.pdf

    • Jason, Alberta would be better off, because the transfer payments back to Alberta would be commensurate with the contributions. The Equalization Formula is a wealth transfer, you can’t look at it any other way…..and that’s fine. The funds earmarked for equalization become federal only because the federal government handles it prior to doling it out. The funds Alberta contributes originate on the success and on the backs of Alberta employers and employees. It’s abundantly clear where the funds originate, and where they generally end up, year after year, decade after decade. These facts are not lost on Albertans, but they are conveniently lost on traditional recipients. Albertans are not asking anyone to bow down, or for handouts……far from it. Albertans are asking for opportunities to succeed, and it’s become clear that opportunities to succeed and continue to contribute are being obstructed by those in areas who have in the past and currently benefit from our hard work. The long and short of it is that Confederation is and should be a two-way street. The growing feeling is that this is not the case.

  • as i work for a living i havent got the time at the moment to plow through an 85 page book but it seems likly that Jason is indeed correct that the transfer payments come from federal coffers as opposed to a direct payment from the province. that being said it does little to dull the sting that quebec stands there with its hand out all the while doing its best to break up the country. ever notice that when western indepedance is mentioned the media goes crazy at the mere suggestion……like its some sort of heresy. I look forward to reading the link Jason provided.

  • Jason, great article from my alma mater, the U of A, explaining in detail equalization payments. You inferred that the funds came from federal revenues, which no surprise here come from us taxpayers in the form of personal, corporate, consumption, property and natural resource royalties!!! So for every dollar that Albertans pay into the federal revenue pool, we get 50 cents back versus Quebec who pays $1 and gets $1.15 back. So, yes, we are raising the federal floor but don’t be fooled into thinking Alberta isn’t paying for it.

  • David Lynch, former Dean of Engineering at UofA, has presented a different viewpoint on Equalization Payments to the Alberta Legislature. In short, Alberta has been the recipient of a highly trained workforce from other provinces. Their education (and health care and social services) has been paid by other provinces. It would have been impossible for Alberta to train the equivalent workforce (insufficient capacity in universities and colleges, for one), and it would have cost more than equalization transfers! Once in Alberta earning above average incomes, they pay Alberta and Federal taxes. So the benefits all accrue to Alberta. These presentations resulted in many Aha! moments amongst MLAs who held uninformed viewpoints similar to those expressed above.

    The big picture is much more complicated than a biased, partisan viewpoint. We all live in Canada. Instead of railing on about how you believe the pie is not only fixed but divided unfairly, I suggest thinking about how we can grow the pie so that everyone benefits.

    • You make a very interesting remark about the favors Alberta has been done in receiving a trained workforce. Sorry, but an influx from elsewhere due to opportunity here is not necessarily a favor. The workforce places a burden on infrastructure and services. Outsiders who come to live here use everything here in services and infrastructure and like the rest of us, do no pay sales taxes or health care premiums, so if they’re fortunate enough to be earning a living here, they had surely better be paying taxes here. It goes with the territory, so I’m sorry if I don’t accept that people that had to come to Alberta to make a living does not equate with 10 billion exiting this province that will never come back.

      Lots of favors should done back and forth in Canada, that’s what it should be about, as partners in Confederation. Albertans don’t mind sharing our good fortune and hard work to be Albertans with other Canadians. We’d surely rather have it that way than being on the other end of it. Albertans are not asking for federal handouts. We want only to be able to succeed, and given the nature of all give and no take from equalization and the perception (reality) that many barriers to success originate in areas outside that clearly benefit from Alberta and a strong economy here.

      I’m sure that one day, Alberta may well be brought to her knees economically, and will somehow qualify to be on the receiving end of the same equalization formula. I’m convinced there are many, however, in this province who would not stand for such a day to happen.

    • 1)They do not pay Alberta taxes, they pay taxes to where they say they actually live full time.
      2)Highly trained? University education? That is not the average rig worker.

Leave a Reply to Mitch Cancel reply

Your email address will not be published. Required fields are marked *