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Prominent Alberta Conservative Voice Explains: Why I am voting Yes to End Equalization…

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From Danielle Smith

To me, equalization, the health transfer and the social transfer combined, are a measure of how much the federal government is overtaxing us. The Constitution has a very limited role for the federal government. The federal government likes to use its spending power to meddle in areas that aren’t its jurisdiction. My view is this – if you want to pass policy for health care, long term care, drug plans, day care, welfare – then RUN FOR PROVINCIAL OFFICE. Don’t take money from the provinces, launder it through the federal bureaucracy and then divvy it up unfairly to give back more money to the provinces that you think will vote for you. (Yep – that’s how I see it.)

So let’s analyze the numbers a bit shall we? I have three tables to show you that tell the whole story.

The level of overtaxation (on these three programs alone) is easily quantified. In the 2021-22 fiscal year it will be $83.890 billion. In just 10 years, the federal overtaxation has grown from $60.085 billion – that’s a 40 per cent increase.

Per person Ottawa transfers an average of $2,181. But of course we know, because of equalization, some provinces are more equal than others.

Take a look at Alberta. Our transfers have grown from $3.661 billion to $6.835 billion in the same period, or from $946 per person to $1,523 per person.

Now take a look at Quebec. Their transfers have grown from $17.329 to $26.306 in the same 10 year period, or $2,148 per person to $3,039 per person.

How would an equal per capital model impact the other provinces?…

In my column, I said we should eliminate equalization and instead do equal per person transfers to every province. If we did that, Alberta would receive $9.788 billion this year, a difference of $2.953 billion more. Alberta isn’t the only one getting hosed. Look at the final line in the table below. So are BC and Ontario. Saskatchewan is shortchanged $781 million, and poor Newfoundland and Labrador, which in on the brink of bankruptcy but still doesn’t qualify for equalization, would get $343 million more.  If we eliminated equalization and gave everyone the same per person amount, Quebec would receive $18.879 billion or $7.427 billion less than is expected this year. As it should be. Saskatchewan and Newfoundland and Labrador should not be subsidizing Quebec.

There are a couple of things I really like about a per person transfer model.

  1. It encourages provinces to compete to attract people, because the more people you attract the more dollars you attract.

I understand the Fairness Alberta argument about changing equalization. They suggest a markup to market on the electricity price that hydro rich provinces charge, they want to stop growing equalization with GDP growth, and they want to account for the different cost of services in each province. But in the end, if we create a program that rewards provinces only for attracting people then they have to implement policies that attract people. Like having low rates of taxation, making it easier to start a business, having affordable housing, and so on. There is a lot that is in the power of government. But if we keep giving provinces more money as they adopt policies that reduce their attractiveness it is counterproductive.

  1. A per person model is going to give a greater benefit to smaller provinces with lower costs of services than larger provinces with a larger cost of service.

Even if making Alberta pay more is the objective of Ottawa, an equal per capita transfer amount still has Alberta paying disproportionately into the pot. Alberta has higher wages, higher workforce participation rates, higher spending so we will stay pay more in personal and corporate income taxes, GST, fuel tax, EI, CPP and other federal taxes, than we receive back in per person federal transfers. This won’t eliminate the net payer status we have; but it will get us on our way to narrowing the gap.

  1. Once we have established  a single per person transfer that is the same across the country we can move to the next step, which is convert the cash transfer into tax points instead.

If Alberta was getting its proper share of transfers – $9.79 billion – we could then move to the next stage of negotiation with Ottawa. Which is to convert the cash to tax points instead. I’ll leave it to the accountants to figure out the precise numbers, but conceptually let’s say it would mean reducing the federal income tax by 5 percentage points across all categories and increasing provincial income tax by 5 percentage points across all categories. The reason to do that is this, as Alberta grows so would it’s share of own-source revenues. Rather than have Ottawa continue to capitalize on our growth, we would.

  1. Once we have fixed the problems with federal provincial transfers, we can move on to fix CPP and EI next.

Alberta pays disproportionately into CPP and EI too – we pay roughly 30 per cent of the premiums for CPP and only get back about 10 per cent of the spending. I haven’t done the calculation on EI but I suspect it’s even worse. If we can stop the overtaxation on income tax, these two programs should be next.

Enough is enough…

For too long we have just accepted that this is the way the country works. I think we’ve been bullied into thinking that paying disproportionately into Confederation was our penance for the federal government cancelling the National Energy Program. It’s almost as if we collectively felt that if only we paid off central Canada, they wouldn’t come after our resource wealth again. How wrong we were. Now Quebec is so bloody minded they don’t care if they hurt themselves by killing off our energy industry.

That’s fine. If they don’t want the revenues that come from our energy resources, we should be happy to keep it for ourselves. Let’s start to show them we are serious by strongly voting yes to end equalization on October 18.

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Alberta

Regulator lays charges against Tidewater Midstream for acidic water release

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CALGARY — The Alberta Energy Regulator has laid charges against Tidewater Midstream and Infrastructure Ltd. for a release of acidic water in west-central Alberta.

The regulator says the release occurred in Oct. 2019 at Tidewater’s Ram River sour gas processing plant near Rocky Mountain House. 

It says the acidic water flowed into a nearby creek.

Calgary-based Tidewater has been charged with 10 violations under the Environmental Protection and Enhancement Act, including releasing a substance to the environment that caused or may have caused an adverse effect. 

The regulator also alleges that Tidewater failed to report the release of the acidic water as soon as possible, and failed to take all reasonable measures to repair and remedy the spill.

Tidewater is scheduled to appear in court on Dec. 8 in Rocky Mountain House.

This report by The Canadian Press was first published October 21, 2021.

Companies in this story: (TSX:TWM)

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Alberta

Alberta's top doctor says COVID-19 cases receding but vigilance needed at Halloween

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EDMONTON — Alberta’s chief medical officer of health says COVID-19 case numbers in the province continue to recede.

But Dr. Deena Hinshaw cautions that the hospital situation remains precarious given the high number of patients.

And she says Albertans can’t afford to let up on health restrictions, particularly with Halloween coming up.

There were 770 new cases of COVID-19 Thursday for a new total of 10,434 active cases.

There were eight more deaths, bringing that total to 3,014.

Alberta Health Services says there are 912 people in hospital with COVID-19, and that 201 of them are in intensive care.

Alberta remains under gathering restrictions for indoor and outdoor events, and Hinshaw says it’s important to stick to those limits at Halloween.

Hinshaw urged those setting out candy for trick or treaters to not use bowls, but to set out the candy spaced apart on a surface like a blanket.

She says those who want to have a Halloween party should consider a small gathering of vaccinated people.

“This is not the year for large Halloween parties,” Hinshaw said.

“If you’re planning a Halloween gathering try to have it outdoors and make sure the limit of no more than 20 people is observed.”

Hinshaw noted that last Oct. 31 there were 5,600 active COVID-19 cases, about half the current total. There were 141 people in hospital with the illness a year ago.

Alberta continues to battle a fourth wave of the pandemic.

It has more than doubled the normal number of 173 critical care beds and has had to cancel thousands of non-urgent surgeries to handle the surge.

Opposition NDP Leader Rachel Notley says with winter coming and COVID-19 still circulating, the province needs to provide stable funding to social agencies for winter emergency shelters.

“All people deserve to live in dignity and have a safe place to call home,” said Notley. “These calls are urgent. It’s getting cold outside, and our northern winter will be here soon.”

This report by The Canadian Press was first published Oct. 21, 2021.

The Canadian Press

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