Alberta
“Ontario Can’t do it Alone” – Fairness Alberta Expands with Eastern Canada Campaign
It has been just over four months since the launch of Fairness Alberta, a non-partisan Proudly Canadian, Fiercely Albertan organization, in May 2020. Fairness Alberta promotes education and discussion to combat biased government policies and regulations that restrict Alberta’s economic growth and prosperity. By highlighting Alberta’s $324 billion net contribution to the Canadian economy from 2000 to 2019, FA’s mandate is to “inform Canadians about the magnitude of the contributions Albertans make to Canada, while educating Canadian’s about the damaging fiscal, trade, energy, procurement, and infrastructure policies that chronically undermine Alberta’s – and Canada’s – potential.”
Dr. Bill Bewick, Director of Fairness Alberta
The public response to the organization throughout Alberta and across Canada has been overwhelmingly positive, according to Bill Bewick, Executive Director of Fairness Alberta. “Our factual approach is agreeable,” he says, “and even people who are skeptical of Alberta demanding more from the country are willing to listen and learn.”
On September 21, Fairness Alberta expanded into eastern Canada with the launch of their Fall 2020 Campaign in Ontario. The two-part billboard series in Toronto and Ottawa is designed to illustrate just how much Albertans have helped Ontarians carry the fiscal load in the federation over the last decade. “Many people are surprised by the fiscal contributions of each province given the size difference,” says Bewick, “people assume Ontario makes the biggest contribution, but that’s just not the case.”
From 2007-2018, Ontario contributed $98 billion net and Alberta contributed $240 billion net to the country, while the remainder of the provinces have received a combined total of $370 billion.
As all Canadian provinces face the daunting road to recovery following the destructive economic impacts of COVID-19, the dissemination of accurate information regarding the crucial role of Alberta in the nation’s recovery remains crucial. Arguably even more so since the recent Throne Speech, delivered by Governor General Julie Payette on September 23, has been widely criticized for once again ignoring the contributions and needs of Albertans in favor of new policies that will further restrict productivity in Alberta by targeting natural gas.
Premiere Jason Kenney openly criticized the Throne Speech and the clean-fuel standard, stating, “We got a litany of policies that would strangle investment and jeopardize resource jobs when we most need the industry that generates 20 percent of government revenues in Canada” (1).
Fairness Alberta has responded similarly to developments from the recent Throne Speech, arguing that Alberta’s role in national recovery cannot be overstated or ignored. “Alberta is an engine in the fragile Canadian economy,” says Bewick, “If that productivity is hindered by the new clean fuel standards, no other province will be able to pick up the slack.”
The Ontario campaign is set to continue into the month of November, paired with online advertising that draws targeted audiences to their website, and the remainder of 2020 will see an expansion into British Columbia as Fairness Alberta continues to grow and fight for a fair deal for Alberta within Canada. Bewick believes that “there are millions of fair-minded Canadians out there and showing them the importance of Alberta’s economy is critical right now to ensure the federal government works with Alberta, not against it.”
For more information on Fairness Alberta, visit fairnessalberta.ca.
For more stories, visit Todayville Calgary.
From the Fraser Institute
By Spencer Gudewill and Tegan Hill
Last November, Premier Danielle Smith announced that her government will give up to $1.8 billion in subsidies to Dow Chemicals, which plans to expand a petrochemical project northeast of Edmonton. In other words, $1.8 billion in corporate welfare.
And this is just one example of corporate welfare paid for by Albertans.
According to a recent study published by the Fraser Institute, from 2007 to 2021, the latest year of available data, the Alberta government spent $31.0 billion (inflation-adjusted) on subsidies (a.k.a. corporate welfare) to select firms and businesses, purportedly to help Albertans. And this number excludes other forms of government handouts such as loan guarantees, direct investment and regulatory or tax privileges for particular firms and industries. So the total cost of corporate welfare in Alberta is likely much higher.
Why should Albertans care?
First off, there’s little evidence that corporate welfare generates widespread economic growth or jobs. In fact, evidence suggests the contrary—that subsidies result in a net loss to the economy by shifting resources to less productive sectors or locations (what economists call the “substitution effect”) and/or by keeping businesses alive that are otherwise economically unviable (i.e. “zombie companies”). This misallocation of resources leads to a less efficient, less productive and less prosperous Alberta.
And there are other costs to corporate welfare.
For example, between 2007 and 2019 (the latest year of pre-COVID data), every year on average the Alberta government spent 35 cents (out of every dollar of business income tax revenue it collected) on corporate welfare. Given that workers bear the burden of more than half of any business income tax indirectly through lower wages, if the government reduced business income taxes rather than spend money on corporate welfare, workers could benefit.
Moreover, Premier Smith failed in last month’s provincial budget to provide promised personal income tax relief and create a lower tax bracket for incomes below $60,000 to provide $760 in annual savings for Albertans (on average). But in 2019, after adjusting for inflation, the Alberta government spent $2.4 billion on corporate welfare—equivalent to $1,034 per tax filer. Clearly, instead of subsidizing select businesses, the Smith government could have kept its promise to lower personal income taxes.
Finally, there’s the Heritage Fund, which the Alberta government created almost 50 years ago to save a share of the province’s resource wealth for the future.
In her 2024 budget, Premier Smith earmarked $2.0 billion for the Heritage Fund this fiscal year—almost the exact amount spent on corporate welfare each year (on average) between 2007 and 2019. Put another way, the Alberta government could save twice as much in the Heritage Fund in 2024/25 if it ended corporate welfare, which would help Premier Smith keep her promise to build up the Heritage Fund to between $250 billion and $400 billion by 2050.
By eliminating corporate welfare, the Smith government can create fiscal room to reduce personal and business income taxes, or save more in the Heritage Fund. Any of these options will benefit Albertans far more than wasteful billion-dollar subsidies to favoured firms.
Authors:
Alberta
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