Equalization referendum debate heats up in Alberta as Kenney's approval further plummets

CALGARY -

Alberta Premier Jason Kenney insists the province’s referendum on equalization has nothing to do with his leadership, despite his approval rating ranking as the lowest among Canada's provincial leaders.

“This is an opportunity for Albertans to say yes to a fair deal, it's not about partisan politics, there will be a provincial election in the spring of 2023, this is about whether or not Alberta should push hard to get a fair deal,” Kenney said.

 “I always say that we Albertans are generous, we are proud to be able to share some of our good fortune with other parts of Canada when times are good here and bad elsewhere. But we insist on having the ability to develop our resources, and the prosperity that ends up being shared through programs like equalization that's what this vote is about.”

According to poll numbers released Wednesday by Angus Reid, just one-in-five (22 per cent) of Albertans approve of Kenney, who saw his rating drop another nine per cent since June in what is now the lowest point in his two-year stint as premier.

The low number is largely the result of Kenney's handling, or mishandling, of the fourth wave of the COVID-19 pandemic, which has seen hospitals in the province overwhelmed with patients, said Mount Royal University political scientist Lori Williams.

"The central problem here is that Jason Kenney is incapable of learning from his mistakes, and there's nothing more central to life, never mind political life, than to be able to learn from your mistakes," she said.

"And he refuses to bring anybody around him who will give the kind of advice he needs."

The survey comes as Alberta is set to fulfill an election promise Kenney made to hold a referendum on equalization and rewriting part of Canada’s constitution, even though Alberta has absolutely no power to implement it. The vote is purely symbolic and designed to send Ottawa a message.

The ‘yes’ or ‘no’ question on the Oct. 18 municipal election ballot is straightforward: “Should Section 36(2) of the Constitution Act, 1982 – Parliament and the Government of Canada’s commitment to the principle of making equalization payments be removed from the Constitution?"

This refers to the section of the constitution that says the Canadian government supports the idea of ensuring “provincial governments have sufficient revenues to reasonably comparable levels of public services at reasonably comparable levels of taxation.” 

In a nutshell, it means the federal government provides additional support to governments of poorer provinces such as Quebec or the Maritimes where their average consumer spending is lower and it’s harder to raise revenue for healthcare or education. 

UNFAIR, UNAFFORDABLE, AND UNACCEPTABLE

Bill Bewick, the executive director of Fairness Alberta and a political science professor at Athabasca University, argues against equalization, adding that it is unfair, unaffordable and unacceptable.

“Albertans have been sending about $20 billion a year to the rest of Canada via Ottawa through our taxes, and that's been going on for over a decade,” Bewick said.

“For a while, you know, we didn't want to make a big fuss out of it, things were going pretty good here, it seemed like the federal government was supporting us, but since the energy downturn in 2015 that has all changed.”

Bewick adds this referendum will not succeed in completely eliminating equalization, but Albertans should demand significant changes and a positive vote could help in giving the province leverage over the federal government in the future. 

“We would still be sharing billions and billions and billions of dollars with the rest of Canada through things like the health transfer through our various programs," he said.

"So this is about not stopping sharing, it's about making it more fair and saying whoa this is too much, we need to scale it back."

Berwick says Alberta’s federal taxes are twice as high as provincial taxes while provincial services are relied upon the most by Albertans, noting that equalization payments are continuing to climb while the province’s economic situation sees little improvement.

“They are going up, they've gone up $5 billion in the last five years and they're going up another $4 billion in the next four years. It's just really frustrating to see that much money continuing to go in increasing amounts at a time when it's less needed than ever, and less affordable than ever.”

A COSTLY DISTRACTION

University of Calgary economist Trevor Tombe suggests that voting ‘No’ to the equalization question on Oct. 18 is important because it risks long-term damage to our federation and could be a costly distraction from Alberta’s real challenges

Tombe notes that at every point in Canadian history, federal transfers have been unevenly distributed across provinces to reflect that some have a more difficult time than others, but eliminating equalization is not a solid option.

He says that if it were not for programs like equalization, there would be intense pressure for the federal government to take a more active role and delivery of core areas of public service. 

“If you think about Prince Edward Island (PEI), if they didn't have equalization they would need an HST rate of 30 per cent (five per cent federal 25 per cent provincial),” Tombe said.

“So programs like this are necessary for lower income provinces to avoid those tough choices. PEI for example needs their entire personal income tax system, plus a 10 per cent sales tax to just fund health care, whereas in Alberta, we have much easier time raising revenue than if we had the PEI personal income tax system.”

Tombe says that despite concerns, he views the referendum as more of an outlet to express frustration instead of the legitimate disagreement behind equalization.

Think about the policy issues, and just even a little bit understand that Alberta doesn't pay a thing into equalization, there is no such thing as an equalization pot or an equalization pool of dollars, this is just entirely a federal program,” Tombe said.

“Equalization flows at a general revenue just like their office supply budget does so Alberta doesn't contribute a thing. Canadian taxpayers who live everywhere, including here in Alberta, pay Canadian taxes to the federal government and that's what funds it.”

With files from CTV Calgary's Dave Dormer