Alberta
It’s time for the Alberta Sovereignty Act – Red Deer South MLA Jason Stephan
This article submitted by Red Deer South MLA Jason Stephan
THE ALBERTA SOVEREIGNTY ACT IS GOOD FOR ALBERTA
I supported the concept of the Alberta Sovereignty Act before the UCP leadership race. It was developed by the Free Alberta Strategy. I participated in their townhalls supporting their strategies, as did two of the UCP leadership candidates, Danielle Smith and Todd Loewen. Jason Kenney and his cabinet ministers did not.
What is the Alberta Sovereignty Act?
The Sovereignty Act affirms Alberta’s right to refuse and reject Federal Government actions or laws that intrude into provincial areas of jurisdiction or attack the interests of Alberta.
Ottawa recently released a “discussion paper” seeking to limit, or impose additional carbon taxes on, oil and gas development. This is not an isolated incident; this is a pattern of hostile behavior from Ottawa seeking to attack and take advantage of Alberta, holding it back.
Albertans should be aware that this discussion paper is likely a pretext, an excuse to either take more money from Alberta or prevent it from excelling ahead of other provinces.
Albertans should be aware that at any time Ottawa may leverage the Supreme Court of Canada decision permitting carbon taxes, overruling our Court of Appeal describing Ottawa’s carbon taxes as a “constitutional trojan horse”, to impose a targeted windfall or carbon tax on Alberta’s natural resources that discriminates and disproportionately punishes Alberta while sparing Ontario and Quebec from burden or harm.
The Supreme Court of Canada says carbon taxes are a tool that Ottawa has its disposal at any time to punish Alberta, yet under section 92A of the Constitution Act, Alberta has jurisdiction over its natural resources, not Ottawa.
The Alberta Sovereignty Act should be invoked to reject the “discussion paper” and tell Ottawa to leave Alberta and its constitutional jurisdiction alone.
The unfortunate truth is that Ottawa has made itself an unpredictable and hostile variable, a threat to the freedom and prosperity of Alberta businesses and families that should not be underestimated.
Alberta is compelled to protect itself.
Does the Establishment like the Alberta Sovereignty Act? No. Many Eastern politicians and their media pundits do not like the Alberta Sovereignty Act. It challenges the status quo they benefit under.
Their status quo has enabled a pattern of abuse and economic warfare on Alberta, disrespecting its jurisdiction over its resources, creating chaos and injecting commercial uncertainty, chasing away billions in private sector investments and thousands of Alberta jobs.
Albertans are becoming more aware that this is a rigged partnership. Alberta businesses and families give hundreds of millions more to Ottawa than they receive in return, with Ottawa using our money, not to benefit Alberta, but for political gain, primarily in Quebec, the structural welfare recipient under the partnership. Equalization is one of the devices that Ottawa uses for this purpose.
Albertans want change. Alberta held an equalization referendum. Ottawa ignored the result –to them Alberta is means to an end, they want our money. Strongly worded letters from Alberta politicians have accomplished nothing. It is time for less words and more actions.
Boundaries are reasonable and normal.
Boundaries are integral to adult relationships. The Alberta Sovereignty Act seeks to impose boundaries that Ottawa continually disrespects, to discriminate, attack, and force itself into Alberta’s constitutional jurisdictions.
Some of the UCP leadership candidates say the Alberta Sovereignty Act will produce chaos. They are wrong. It is a morally and fiscally bankrupt Ottawa, a trillion dollar plus fiscal train wreck, that is producing chaos. Ottawa is the risk that we can no longer afford, not a law that seeks to do something about it!
The Alberta Sovereignty Act is good for Alberta. Wisely applied it can help protect the Alberta Advantage, as the most attractive Canadian jurisdiction to start and grow a business, to work and raise our families. Alberta is a land of freedom and opportunity for us and our children. We must be vigilant to keep it that way.
The deadline to become a member of the United Conservative Party to vote in this leadership race is this Friday, August 12. We invite all Alberta conservatives to become a member of the party, to vote and have your say on who will be the next leader and Premier of Alberta!
You can buy a membership here, or check if your membership is up-to-date here.
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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