Alberta
Alberta remains largest net contributor to Ottawa’s coffers despite damaging federal policies
From the Fraser Institute
By Tegan Hill and Spencer Gudewill
According to a recent poll by the Angus Reid Institute, nearly half of Albertans believe they get a “raw deal”—that is, they give more than they get—being part of Canada. It’s easy to see why Albertans are frustrated. Despite the province’s crucial role in the federation, the federal government continues to inflict restrictive and damaging policies on the Albertan economy.
The Trudeau government’s list of policies includes Bill C-69 (which imposes complex, uncertain and onerous review requirements on major energy projects), Bill C-48, (which bans large oil tankers off British Columbia’s northern coast and limits access to Asian markets), the oil and gas emission cap, the “clean fuel standard,” numerous “net-zero” targets that disproportionately impact Alberta, and so on. Not surprisingly, the same poll found that 65 per cent of Albertans believe federal government policies have hurt their province’s economy.
What’s less clear is why the federal government wants to thwart Alberta’s economic engine, considering how much the province contributes to the federation financially. In our current system of federalism, Ottawa collects various taxes then redistributes money to Canadians in other provinces for federal programs including equalization, the Canada Pension Plan (CPP) and employment insurance.
According to a new study published by the Fraser Institute, from 2007 to 2022 (the latest period of available data), Albertans contributed $244.6 billion more in taxes and other payments to the federal government than they received in federal spending—more than five times as much as British Columbians or Ontarians. The other seven provinces received more federal dollars than they contributed to federal revenues. In other words, Alberta is by far the largest net contributor to Ottawa’s coffers.
Alberta’s large net contribution reflects its comparatively young population (fewer retirees), higher rates of employment, higher average incomes and relatively strong economy. Alberta has a history of punching above its weight economically. For perspective, from 1981 to 2022, the province had the highest annual average economic growth rate in Canada. And despite dips in growth due to the 2014 oil-price collapse and COVID, in 2022 Alberta accounted for 17.9 per cent of Canada’s total economic growth despite being home to just 11.6 per cent of the country’s population.
It’s a similar story for business investment per private-sector worker (in 2022, Alberta’s level more than doubled the non-Alberta average among provinces) and private-sector job growth with Alberta contributing nearly one in every five private-sector jobs created in Canada in 2022.
Alberta’s prosperity, which helps fuel federation, may help explain why in 2022 56,245 more Canadian residents moved to Alberta than left it—a much higher net inflow than in any other province. For decades, Alberta has provided economic opportunities for Canadians from other provinces willing to relocate.
Finally, without Alberta’s large net contribution to the federal government’s bottom line, Ottawa would have significantly larger budget deficits. In 2022, for instance, without Alberta the Trudeau government’s $25.7 billion budget deficit would have ballooned to $39.9 billion. The larger the deficit (all else equal) the greater the debt accumulation, which Canadians must ultimately finance through their taxes.
When Alberta’s economy is strong and prosperous, it benefits all of Canada. And due to Alberta’s economic success, Albertans continue to contribute relatively more to the federation than Canadians in other provinces. That’s something the federal government should encourage, not discourage.
Authors:
From Resource Now
Alberta renews call for West Coast oil pipeline amid shifting federal, geopolitical dynamics.
Just six months ago, talk of resurrecting some version of the Northern Gateway pipeline would have been unthinkable. But with the election of Donald Trump in the U.S. and Mark Carney in Canada, it’s now thinkable.
In fact, Alberta Premier Danielle Smith seems to be making Northern Gateway 2.0 a top priority and a condition for Alberta staying within the Canadian confederation and supporting Mark Carney’s vision of making Canada an Energy superpower. Thanks to Donald Trump threatening Canadian sovereignty and its economy, there has been a noticeable zeitgeist shift in Canada. There is growing support for the idea of leveraging Canada’s natural resources and diversifying export markets to make it less vulnerable to an unpredictable southern neighbour.
“I think the world has changed dramatically since Donald Trump got elected in November,” Smith said at a keynote address Wednesday at the Global Energy Show Canada in Calgary. “I think that’s changed the national conversation.” Smith said she has been encouraged by the tack Carney has taken since being elected Prime Minister, and hopes to see real action from Ottawa in the coming months to address what Smith said is serious encumbrances to Alberta’s oil sector, including Bill C-69, an oil and gas emissions cap and a West Coast tanker oil ban. “I’m going to give him some time to work with us and I’m going to be optimistic,” Smith said. Removing the West Coast moratorium on oil tankers would be the first step needed to building a new oil pipeline line from Alberta to Prince Rupert. “We cannot build a pipeline to the west coast if there is a tanker ban,” Smith said. The next step would be getting First Nations on board. “Indigenous peoples have been shut out of the energy economy for generations, and we are now putting them at the heart of it,” Smith said.
Alberta currently produces about 4.3 million barrels of oil per day. Had the Northern Gateway, Keystone XL and Energy East pipelines been built, Alberta could now be producing and exporting an additional 2.5 million barrels of oil per day. The original Northern Gateway Pipeline — killed outright by the Justin Trudeau government — would have terminated in Kitimat. Smith is now talking about a pipeline that would terminate in Prince Rupert. This may obviate some of the concerns that Kitimat posed with oil tankers negotiating Douglas Channel, and their potential impacts on the marine environment.
One of the biggest hurdles to a pipeline to Prince Rupert may be B.C. Premier David Eby. The B.C. NDP government has a history of opposing oil pipelines with tooth and nail. Asked in a fireside chat by Peter Mansbridge how she would get around the B.C. problem, Smith confidently said: “I’ll convince David Eby.”
“I’m sensitive to the issues that were raised before,” she added. One of those concerns was emissions. But the Alberta government and oil industry has struck a grand bargain with Ottawa: pipelines for emissions abatement through carbon capture and storage.
The industry and government propose multi-billion investments in CCUS. The Pathways Alliance project alone represents an investment of $10 to $20 billion. Smith noted that there is no economic value in pumping CO2 underground. It only becomes economically viable if the tradeoff is greater production and export capacity for Alberta oil. “If you couple it with a million-barrel-per-day pipeline, well that allows you $20 billion worth of revenue year after year,” she said. “All of a sudden a $20 billion cost to have to decarbonize, it looks a lot more attractive when you have a new source of revenue.” When asked about the Prince Rupert pipeline proposal, Eby has responded that there is currently no proponent, and that it is therefore a bridge to cross when there is actually a proposal. “I think what I’ve heard Premier Eby say is that there is no project and no proponent,” Smith said. “Well, that’s my job. There will be soon. “We’re working very hard on being able to get industry players to realize this time may be different.” “We’re working on getting a proponent and route.”
At a number of sessions during the conference, Mansbridge has repeatedly asked speakers about the Alberta secession movement, and whether it might scare off investment capital. Alberta has been using the threat of secession as a threat if Ottawa does not address some of the province’s long-standing grievances. Smith said she hopes Carney takes it seriously. “I hope the prime minister doesn’t want to test it,” Smith said during a scrum with reporters. “I take it seriously. I have never seen separatist sentiment be as high as it is now. “I’ve also seen it dissipate when Ottawa addresses the concerns Alberta has.” She added that, if Carney wants a true nation-building project to fast-track, she can’t think of a better one than a new West Coast pipeline. “I can’t imagine that there will be another project on the national list that will generate as much revenue, as much GDP, as many high paying jobs as a bitumen pipeline to the coast.”
Alberta
Alberta Premier Danielle Smith Discusses Moving Energy Forward at the Global Energy Show in Calgary
From Energy Now
At the energy conference in Calgary, Alberta Premier Danielle Smith pressed the case for building infrastructure to move provincial products to international markets, via a transportation and energy corridor to British Columbia.
“The anchor tenant for this corridor must be a 42-inch pipeline, moving one million incremental barrels of oil to those global markets. And we can’t stop there,” she told the audience.
The premier reiterated her support for new pipelines north to Grays Bay in Nunavut, east to Churchill, Man., and potentially a new version of Energy East.
The discussion comes as Prime Minister Mark Carney and his government are assembling a list of major projects of national interest to fast-track for approval.
Carney has also pledged to establish a major project review office that would issue decisions within two years, instead of five.
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