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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

Alberta’s government is investing $5 million to help launch the world’s first direct air capture centre at Innisfail

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Taking carbon capture to new heights

Alberta’s government is investing $5 million from the TIER fund to help launch the world’s first direct air capture centre.

Alberta is a global leader in environmentally responsible energy production and reducing emissions, already home to two of the largest carbon capture, utilization and storage facilities operating in North America, and seeing emissions decline across the economy.

Most of the current technologies used around the world focus on facilities and worksites. Direct air capture offers a potential new way of removing greenhouse gas emissions straight from the air. If successful, the potential is huge.

Through Emissions Reduction Alberta, $5 million is being invested from the industry-led TIER program to help Deep Sky in the design, build and operation of the world’s first direct air capture innovation and commercialization centre in Innisfail. This funding will help Alberta keep showing the world how to reduce emissions while creating jobs and increasing responsible energy production.

“We don’t need punitive taxes, anti-energy regulations or nonsensical production caps to reduce emissions. Our approach is to support industry, Alberta expertise and innovation by helping to de-risk new technology. Direct air capture has some potential and is being looked at in other jurisdictions, so it’s great to see companies choosing Alberta as a place to invest and do business in.”

Rebecca Schulz, Minister of Environment and Protected Areas

“Alberta companies are leaders in developing carbon capture and storage technology. Deep Sky has the potential to take the next major step in decarbonization through direct air capture. These advancements and investments through the TIER fund are a major reason why global demand is increasing for our responsibly produced energy products.”

Brian Jean, Minister of Energy and Minerals

“Investing in Deep Sky supports Alberta’s global leadership in emissions reduction. This project accelerates cutting-edge carbon removal technologies, creates jobs and builds a platform for innovation. By capturing legacy emissions, it complements other climate solutions and positions Alberta at the forefront of a growing carbon removal economy.”

Justin Riemer, CEO, Emissions Reduction Alberta

“We are thrilled to be supported by the Government of Alberta through Emissions Reduction Alberta’s investment to help deliver a world first in carbon removals right here in Alberta. This funding will be instrumental in scaling direct air capture and creating an entirely new economic opportunity for Alberta, Canada and the world.”

Alex Petre, CEO, Deep Sky

Deep Sky is helping establish Alberta as a global leader in carbon removal – an emerging field that is expected to grow exponentially over the next decade. The new centre is located on a five-acre site and will feature up to 10 direct air capture units, allowing multiple technologies and concepts to be tested at once. Starting this summer, Deep Sky Alpha’s units will begin pulling in air, trapping carbon dioxide, transporting it by truck, and safely storing it underground at an approved site in Legal.

This new technology will give Alberta’s oil and gas, energy and utilities, cement and heavy industry, and agriculture and agri-tech sectors new technologies to reduce emissions, while creating local jobs and reinforcing Alberta’s position as a global leader in responsible energy development.

Quick facts

  • Deep Sky aims to capture 3,000 tonnes of emissions each year and estimates creating 80 construction jobs, 15 permanent jobs, and more than $100 million in local economic benefit over the next 10 years, including regional development in rural communities.
  • Research shows that carbon capture technology is safe and effective. Careful site selection and rigorous monitoring serve to ensure the injected carbon dioxide remains sequestered thousands of metres below the surface, with no impact on fresh water, plants or the soil.
  • Provincial funding for this project is delivered through Emissions Reduction Alberta’s Continuous Intake Program, funded by Alberta’s industry-funded Technology Innovation and Emissions Reduction (TIER) system.

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Alberta

The permanent CO2 storage site at the end of the Alberta Carbon Trunk Line is just getting started

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Wells at the Clive carbon capture, utilization and storage project near Red Deer, Alta. Photo courtesy Enhance Energy

From the Canadian Energy Centre

By Deborah Jaremko

Inside Clive, a model for reducing emissions while adding value in Alberta

It’s a bright spring day on a stretch of rolling farmland just northeast of Red Deer. It’s quiet, but for the wind rushing through the grass and the soft crunch of gravel underfoot.

The unassuming wellheads spaced widely across the landscape give little hint of the significance of what is happening underground.

In just five years, this site has locked away more than 6.5 million tonnes of CO₂ — equivalent to the annual emissions of about 1.5 million cars — stored nearly four CN Towers deep beneath the surface.

The CO₂ injection has not only reduced emissions but also breathed life into an oilfield that was heading for abandonment, generating jobs, economic activity and government revenue that would have otherwise been lost.

This is Clive, the endpoint of one of Canada’s largest carbon capture, utilization and storage (CCUS) projects. And it’s just getting started.

 

Rooted in Alberta’s first oil boom

Clive’s history ties to Alberta’s first oil boom, with the field discovered in 1952 along the same geological trend as the legendary 1947 Leduc No. 1 gusher near Edmonton.

“The Clive field was discovered in the 1950s as really a follow-up to Leduc No. 1. This is, call it, Leduc No. 4,” said Chris Kupchenko, president of Enhance Energy, which now operates the Clive field.

Over the last 70 years Clive has produced about 70 million barrels of the site’s 130 million barrels of original oil in place, leaving enough energy behind to fuel six million gasoline-powered vehicles for one year.

“By the late 1990s and early 2000s, production had gone almost to zero,” said Candice Paton, Enhance’s vice-president of corporate affairs.

“There was resource left in the reservoir, but it would have been uneconomic to recover it.”

Facilities at the Clive project. Photo courtesy Enhance Energy

Gearing up for CO2

Calgary-based Enhance bought Clive in 2013 and kept it running despite high operating costs because of a major CO2 opportunity the company was developing on the horizon.

In 2008, Enhance and North West Redwater Partnership had launched development of the Alberta Carbon Trunk Line (ACTL), one of the world’s largest CO2 transportation systems.

Wolf Midstream joined the project in 2018 as the pipeline’s owner and operator.

Completed in 2020, the groundbreaking $1.2 billion project — supported by the governments of Canada and Alberta — connects carbon captured at industrial sites near Edmonton to the Clive facility.

“With CO2 we’re able to revitalize some of these fields, continue to produce some of the resource that was left behind and permanently store CO2 emissions,” Paton said.

Map of the Alberta Carbon Trunk Line courtesy of Wolf Midstream

An oversized pipeline on purpose

Each year, about 1.6 million tonnes of CO2 captured at the NWR Sturgeon Refinery and Nutrien Redwater fertilizer facility near Fort Saskatchewan travels down the trunk line to Clive.

In a unique twist, that is only about 10 per cent of the pipeline’s available space. The project partners intentionally built it with room to grow.

“We have a lot of excess capacity. The vision behind the pipe was, let’s remove barriers for the future,” Kupchenko said.

The Alberta government-supported goal was to expand CCS in the province, said James Fann, CEO of the Regina-based International CCS Knowledge Centre.

“They did it on purpose. The size of the infrastructure project creates the opportunity for other emitters to build capture projects along the way,” he said.

CO2 captured at the Sturgeon Refinery near Edmonton is transported by the Alberta Carbon Trunk Line to the Clive project. Photo courtesy North West Redwater Partnership

Extending the value of aging assets

Building more CCUS projects like Clive that incorporate enhanced oil recovery (EOR) is a model for extending the economic value of aging oil and gas fields in Alberta, Kupchenko said.

“EOR can be thought of as redeveloping real estate,” he said.

“Take an inner-city lot with a 700-square-foot house on it. The bad thing is there’s a 100-year-old house that has to be torn down. But the great thing is there’s a road to it. There’s power to it, there’s a sewer connection, there’s water, there’s all the things.

“That’s what this is. We’re redeveloping a field that was discovered 70 years ago and has at least 30 more years of life.”

The 180 existing wellbores are also all assets, Kupchenko said.

“They may not all be producing oil or injecting CO2, but every one of them is used. They are our eyes into the reservoir.”

CO2 injection well at the Clive carbon capture, utilization and storage project. Photo for the Canadian Energy Centre

Alberta’s ‘beautiful’ CCUS geology

The existing wells are an important part of measurement, monitoring and verification (MMV) at Clive.

The Alberta Energy Regulator requires CCUS projects to implement a comprehensive MMV program to assess storage performance and demonstrate the long-term safety and security of CO₂.

Katherine Romanak, a subsurface CCUS specialist at the University of Texas at Austin, said that her nearly 20 years of global research indicate the process is safe.

“There’s never been a leak of CO2 from a storage site,” she said.

Alberta’s geology is particularly suitable for CCUS, with permanent storage potential estimated at more than 100 billion tonnes.

“The geology is beautiful,” Romanak said.

“It’s the thickest reservoir rocks you’ve ever seen. It’s really good injectivity, porosity and permeability, and the confining layers are crazy thick.”

Suitability of global regions for CO2 storage. Courtesy Global CCS Institute

CO2-EOR gaining prominence 

The extra capacity on the ACTL pipeline offers a key opportunity to capitalize on storage potential while addressing aging oil and gas fields, according to the Alberta government’s Mature Asset Strategy, released earlier this year.

The report says expanding CCUS to EOR could attract investment, cut emissions and encourage producers to reinvest in existing properties — instead of abandoning them.

However, this opportunity is limited by federal policy.

Ottawa’s CCUS Investment Tax Credit, which became available in June 2024, does not apply to EOR projects.

“Often people will equate EOR with a project that doesn’t store CO2 permanently,” Kupchenko said.

“We like to always make sure that people understand that every ton of CO2 that enters this project is permanently sequestered. And we take great effort into storing that CO2.”

The International Energy Forum — representing energy ministers from nearly 70 countries including Canada, the U.S., China, India, Norway, and Saudi Arabia — says CO₂-based EOR is gaining prominence as a carbon sequestration tool.

The technology can “transform a traditional oil recovery method into a key pillar of energy security and climate strategy,” according to a June 2025 IEF report.

Drone view of the Clive project. Photo courtesy Enhance Energy

Tapping into more opportunity

In Central Alberta, Enhance Energy is advancing a new permanent CO2 storage project called Origins that is designed to revitalize additional aging oil and gas fields while reducing emissions, using the ACTL pipeline.

“Origins is a hub that’s going to enable larger scale EOR development,” Kupchenko said.

“There’s at least 10 times more oil in place in this area.”

Meanwhile, Wolf Midstream is extending the pipeline further into the Edmonton region to transport more CO2 captured from additional industrial facilities.

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