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Alberta

Break the Fences, Keep the Frontier

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14 minute read

Marco Navarro-Génie's avatar Marco Navarro-Génie

Note: This post was written from notes prepared for a panel at the Canada Strong and Free Conference in Calgary on Sept 6. I am grateful for the invitation and the opportunity to explore solutions to recognized interprovincial barriers and push further beyond.

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Alberta is the number one destination for Canadians seeking a better life. In the last 5 years, 1 of 3 Canadians moving out of their provinces seeking a better life have come to Alberta. People come to Alberta to escape stagnant wages, unaffordable housing, and the bureaucratic chokeholds of central Canada. They come for work, for opportunity, and for the chance to get ahead. Alberta doesn’t just have oil and gas; it has policies and an entrepreneurial culture that reward hard work. (Every province, except for PEI, has hydrocarbon resources, but most chose not to exploit them). That’s why the province often draws more people than it loses.

But Alberta cannot assume it will always stay ahead. Prosperity, like liberty, is not automatic, and it can vanish if Albertans get complacent. To remain the country’s economic frontier, Alberta must keep moving. That means tearing down the barriers to trade and commerce we still have and fighting the new ones Ottawa and other provinces are busy inventing.

The costs of standing still are enormous. Economists estimate internal trade barriers drain Canada of up to $130 billion a year, as much as seven percent of GDP, a fraction of what the Trump tariffs would inflict. For Alberta alone, even a ten percent reduction in interprovincial barriers would be worth $7.3 billion annually. And when Quebec blocked the Energy East pipeline, Alberta lost the chance to ship crude worth as much as $15 billion a year — roughly one-fifth of its economy. That isn’t theory; that is lost paycheques, foregone tax revenue, and hospitals and schools that never got funded.

Alberta has worked to make itself freer than most provinces. Liquor was privatized decades ago—Ditto for property registries. The New West Partnership has opened labour mobility and procurement between Alberta, Saskatchewan, Manitoba and B.C. Alberta imposes no cultural or linguistic tests on newcomers. No PST. These are the reasons people come here — because it’s easier to find work, to start a business, to access pristine natural environments, to raise your children, and to get on with your life. Less bureaucracy and fewer people telling you what to do and how to live.

But there are still cracks in the foundation. Alberta’s liquor market is open on the retail side, but still congested at the warehouse level due to the AGLC monopoly. Professional guilds in law, teaching, and health care slow down credential recognition. Public procurement often tilts local in ways that make no sense. And like every province, Alberta still bows to Ottawa’s telecommunications rules, the banking oligopoly, the dairy and poultry cartels (supply management), even though it benefits Quebec farmers and hurts Alberta’s. These barriers cost real money and serve no useful purpose.

If those are the old barriers, new ones are emerging. The most notorious new barrier isn’t new at all. This is the recently resurrected protectionist reflex in the RoC. For a century and a half, Canadians have built a culture that is contrary to the dream of their founding fathers to have open trade within the country. Canadians like to mock Donald Trump’s tariffs, but their instincts are no different. When Trump tariffed Canadian steel, Ottawa’s immediate answer was “We’ll buy Canadian” as retaliation. The elbows-up, “buy local” campaigns are no different from the commercial nationalism Trump is using. And the “buy local” impetus precedes Trump. They prop up the cartels and marketing boards, the oligopolistic giants in telecoms, banking, groceries, and construction. Such reflexes are not based on free market ideas.

What makes this 21st-century mercantilism sting even more is the lack of any real appetite in Ottawa to defend free trade. When Mark Carney announced he would “help” canola farmers, it was a double insult. First, it signalled that in the Prime Minister’s Office, there is no courage to fight for open markets abroad — subsidies at home are easier than complicated negotiations. Second, those subsidies are no gift: they are paid for by the very farmers they are supposed to help, through taxes collected in Saskatchewan and Alberta, among others, laundered through Ottawa’s bureaucracy, and handed back with a smile. This is Canada’s oligopoly culture in miniature: no defence of free markets, more subsidies to placate, and more Ottawa bureaucrats to process the paperwork. All of these come at a price. Ottawa money is never free money.

And the irony deepens. Carney himself promised that interprovincial barriers would be gone by July 1, 2025. He did not deliver. And his latest announcement of a new “process” to expedite infrastructure risks does precisely the opposite — adding new layers of federal meddling, vetoes and Ottawa bureaucrats into what should be provincial decisions.


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The enforcement of Diversity, Equity, and Inclusion (DEI) initiatives, along with the surrounding culture, is a recent development. What began as workplace training has evolved into a mechanism for bureaucrats and gatekeepers to extend their authority. In some regions, such as Ontario, DEI mandates have been codified into law, forcing individuals to think and act in ways that are not of their own choosing.

This kind of identitarian enforcement saps productivity, creates “bullsh*t jobs” focused on compliance, and categorizes people instead of promoting unity among them. Most concerning is the way it restricts mobility for workers who don’t fit ideological criteria, punishing those who refuse to conform. This system creates opportunities only for a select, tiny class of individuals.

Alberta has a distinct advantage in this context, as it has not fully embraced the DEI agenda—apart from federal agencies and affiliated organizations, sadly including our own ATB. However, it must remain vigilant against the encroaching imposition of these practices.

The third significant challenge we face on the horizon is “debanking.” In 2022, we witnessed how swiftly Ottawa could order banks to freeze accounts, and how readily banks complied. Since then, federal regulators have been extending their influence under the guise of anti-money laundering regulations. The reality is straightforward: industries or individuals that federal governments deem undesirable can be cut off from financial services. For Alberta, with its energy sector labelled as a threat to the planet, this poses a considerable risk. Entire industries—or even individuals who consume “too much” energy—could soon find themselves excluded from the marketplace by radicals in the PMO.

David Suzuki once called for criminally charging folks he considered environmental offenders, and the NDP has expressed a preference for criminalizing support for the oil and gas sector (The NDP, ostensible fond of books in schools and free speech, also wants to criminalize asking questions about non-existent mass graves and the fictional narrative of genocide in Canada). A free economy loses its meaning if citizens can be excluded from it through government decrees. Alberta must protect its residents by establishing ATB as a fortress for banking, addressing any divisive tendencies, and enshrining access to banking as a civil right. Alberta needs to protect its citizens when those federally chartered banks act as enforcers for Ottawa.

So what does moving forward look like? Alberta has a strong culture of enterprise, but it cannot rest on its laurels. Unless it works to keep ahead, others will eventually catch up. Alberta must double down on being the most desirable place in Canada to live and work. That means bold and greater transformational reforms.

Breaking the cartel-like influence of professional regulators—such as teachers, lawyers, doctors, and nurses—who have transformed their organizations into barriers is crucial. These groups often prosecute their members to enforce ideological beliefs that most Albertans do not support.

Additionally, we need to ensure that access to banking is protected in provincial law, regulating credit unions so that no Albertan can be denied banking services for political reasons. We should also consider breaking up large municipalities to encourage smaller communities to compete for residents and businesses.

Ending the equalization payments and replacing them with a Goods and Services Tax (GST) transfer to Ottawa is necessary to ensure that Alberta’s wealth benefits Albertans directly. Healthcare delivery must be reformed so that patients receive timely services and genuine choices.

Furthermore, we should deregulate trucking and housing construction to make life more affordable for families. Finally, we must tackle public service unions that operate like political monopolies, using examples from small towns like Coaldale to demonstrate how reform can begin at the grassroots level.

Canada advocates for free trade but often behaves like a medieval guild. Alberta has demonstrated that a more liberated approach is viable, but the province must continue to leverage its advantages. This involves resisting cartels, challenging the banks, dismantling outdated barriers, and preventing the emergence of new ones before they become too imposing.

Alberta has always been a frontier — a place where people come to build, take risks, and prosper. Frontiers are not maintained by standing still; they thrive by moving forward. If Alberta continues to push ahead, it can remain the engine of prosperity and the most desirable place to live and work. However, if it becomes complacent, it risks falling behind, becoming weaker, and Ottawa will be more than willing to take advantage of that.

The choice is simple: Alberta can either be fenced in by cartels and bureaucrats, or it can break the fences and keep the frontier open. That is the task, and it is one worthy of Alberta’s spirit.

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Alberta

Equalization program disincentivizes provinces from improving their economies

Published on

From the Fraser Institute

By Tegan Hill and Joel Emes

As the Alberta Next Panel continues discussions on how to assert the province’s role in the federation, equalization remains a key issue. Among separatists in the province, a striking 88 per cent support ending equalization despite it being a constitutional requirement. But all Canadians should demand equalization reform. The program conceptually and practically creates real disincentives for economic growth, which is key to improving living standards.

First, a bit of background.

The goal of equalization is to ensure that each province can deliver reasonably comparable public services at reasonably comparable tax rates. To determine which provinces receive equalization payments, the equalization formula applies a hypothetical national average tax rate to different sources of revenue (e.g. personal income and business income) to calculate how much revenue a province could generate. In theory, provinces that would raise less revenue than the national average (on a per-person basis) receive equalization, while province’s that would raise more than the national average do not. Ottawa collects taxes from Canadians across the country then redistributes money to these “have not” provinces through equalization.

This year, Ontario, Quebec, Manitoba and all of Atlantic Canada will receive a share of the $26.2 billion in equalization spending. Alberta, British Columbia and Saskatchewan—calculated to have a higher-than-average ability to raise revenue—will not receive payments.

Of course, equalization has long been a contentious issue for contributing provinces including Alberta. But the program also causes problems for recipient or “have not” provinces that may fall into a welfare trap. Again, according to the principle of equalization, as a province’s economic fortunes improve and its ability to raise revenues increases, its equalization payments should decline or even end.

Consequently, the program may disincentivize provinces from improving their economies. Take, for example, natural resource development. In addition to applying a hypothetical national average tax rate to different sources of provincial revenue, the equalization formula measures actual real-world natural resource revenues. That means that what any provincial government receives in natural resource revenue (e.g. oil and hydro royalties) directly affects whether or not it will receive equalization—and how much it will receive.

According to a 2020 study, if a province receiving equalization chose to increase its natural resource revenues by 10 per cent, up to 97 per cent of that new revenue could be offset by reductions in equalization.

This has real implications. In 2018, for instance, the Quebec government banned shale gas fracking and tightened rules for oil and gas drilling, despite the existence of up to 36 trillion cubic feet of recoverable natural gas in the Saint Lawrence Valley, with an estimated worth of between $68 billion and $186 billion. Then in 2022, the Quebec government banned new oil and gas development. While many factors likely played into this decision, equalization “claw-backs” create a disincentive for resource development in recipient provinces. At the same time, provinces that generally develop their resources—including Alberta—are effectively punished and do not receive equalization.

The current formula also encourages recipient provinces to raise tax rates. Recall, the formula calculates how much money each province could hypothetically generate if they all applied a national average tax structure. Raising personal or business tax rates would raise the national average used in the formula, that “have not” provinces are topped up to, which can lead to a higher equalization payment. At the same time, higher tax rates can cause a decline in a province’s tax base (i.e. the amount of income subject to taxes) as some taxpayers work or invest less within that jurisdiction, or engage in more tax planning to reduce their tax bills. A lower tax base reduces the amount of revenue that provincial governments can raise, which can again lead to higher equalization payments. This incentive problem is economically damaging for provinces as high tax rates reduce incentives for work, savings, investment and entrepreneurship.

It’s conceivable that a province may be no better off with equalization because of the program’s negative economic incentives. Put simply, equalization creates problems for provinces across the country—even recipient provinces—and it’s time Canadians demand reform.

Tegan Hill

Director, Alberta Policy, Fraser Institute

Joel Emes

Senior Economist, Fraser Institute
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Alberta

Provincial pension plan could boost retirement savings for Albertans

Published on

From the Fraser Institute

By Tegan Hill and Joel Emes

In 2026, Albertans may vote on whether or not to leave the Canada Pension Plan (CPP) for a provincial pension plan. While they should weigh the cost and benefits, one thing is clear—Albertans could boost their retirement savings under a provincial pension plan.

Compared to the rest of Canada, Alberta has relatively high rates of employment, higher average incomes and a younger population. Subsequently, Albertans collectively contribute more to the CPP than retirees in the province receive in total CPP payments.

Indeed, from 1981 to 2022 (the latest year of available data), Alberta workers paid 14.4 per cent (annually, on average) of total CPP contributions (typically from their paycheques) while retirees in the province received 10.0 per cent of the payments. That’s a net contribution of $53.6 billion from Albertans over the period.

Alberta’s demographic and income advantages also mean that if the province left the CPP, Albertans could pay lower contribution rates while still receiving the same retirement benefits under a provincial pension plan (in fact, the CPP Act requires that to leave CPP, a province must provide a comparable plan with comparable benefits). This would mean Albertans keep more of their money, which they can use to boost their private retirement savings (e.g. RRSPs or TFSAs).

According to one estimate, Albertans’ contribution rate could fall from 9.9 per cent (the current base CPP rate) to 5.85 per cent under a provincial pension plan. Under this scenario, a typical Albertan earning the median income ($50,000 in 2025) and contributing since age 18, would save $50,023 over their lifetime from paying a lower rate under provincial pension plan. Thanks to the power of compound interest, with a 7.1 per cent (average) nominal rate of return (based on a balanced portfolio of investments), those savings could grow to nearly $190,000 over the same worker’s lifetime.

Pair that amount with what you’d receive from the new provincial pension plan ($265,000) and you’d have $455,000 in retirement income (pre-tax)—nearly 72 per cent more than under the CPP alone.

To be clear, exactly how much you’d save depends on the specific contribution rate for the new provincial pension plan. We use 5.85 per cent in the above scenario, but estimates vary. But even if we assume a higher contribution rate, Albertan’s could still receive more in retirement with the provincial pension plan compared to the current CPP.

Consider the potential with a provincial pension contribution rate of 8.21 per cent. A typical Albertan, contributing since age 18, would generate $330,000 in pre-tax retirement income from the new provincial pension plan plus their private savings, which is nearly one quarter larger than they’d receive from the CPP alone (again, $265,000).

Albertans should consider the full costs and benefits of a provincial pension plan, but it’s clearly Albertans could benefit from higher retirement income due to increased private savings.

Tegan Hill

Director, Alberta Policy, Fraser Institute

Joel Emes

Senior Economist, Fraser Institute
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