Gaslighting over equalization a dangerous game

Ottawa bashing, never out of favour for long, is enjoying a revival lately. Premier Doug Ford of Ontario blames federal carbon pricing for the General Motors shutdown in Oshawa. Saskatchewan is suing over the carbon plan and got Ontario and New Brunswick to join in. Manitoba also opposes carbon taxes. Quebec has a whole list of demands for more money and power.

In Alberta, anti-Ottawa rhetoric is flourishing in ways reminiscent of the Quebec sovereignty battles of days past. Jason Kenney, the United Conservative Party leader who blames his province’s problems on the rest of Canada, is one of the loudest voices. He says Alberta’s energy industry is hobbled because B.C. won’t allow more pipelines to the Pacific, because Quebec stopped one to the Atlantic and the anti-oil federal Liberals did nothing to help.

The volume is higher now because Kenney is campaigning for a May election in which his party leads the polls. But Kenney has made promises that, if carried out, could disrupt life far beyond Alberta.

Kenney has promised to hold a provincial referendum on changes to federal equalization, even though Alberta can’t unilaterally withdraw from the program or change its rules, which are mandated by the Constitution. But he can cause political havoc by stirring up Albertan resentment over its economic setbacks.

A former federal minister, Kenney knows better, but he habitually mischaracterizes equalization as a direct drain on Alberta. He doesn’t talk about the vital services it supports in other provinces. “I would be prepared to hold a referendum . . . to force the federal government to renegotiate equalization to remove non-renewable resource revenues from the definition of fiscal capacity,” Kenney said last September.

Fiscal capacity is at the heart of the equalization formula. It measures the ability of provinces to raise revenues and forms the basis for the payments formula. Non-renewable resources in Alberta and other provinces are included in the calculation; Quebec’s hydro resources are not. Partly because of that, Quebec will collect $13 billion from equalization this year while Alberta gets zero.

Would a referendum actually change anything? Kenney argues that under a 1998 Supreme Court ruling, provinces and the federal government have a “duty to negotiate” legitimate proposals for constitutional change. If the referendum produces such a demand, the rest of Canada is obliged to negotiate.

That’s the theory, anyway. It has never been tested. Maritimers should be wary of such populist approaches to vital national programs. Quebec is Kenney’s intended target, but we would suffer the collateral damage. The effects on our schools, hospitals and public services could be catastrophic.

Kenney is playing with fire by stirring up resentment in Alberta against other Canadians, which is especially likely in an emotional referendum campaign. And who will speak for equalization in that campaign? Ottawa? Other provinces? Canada should find ways to accommodate Alberta’s legitimate interests, short of cracking national cohesion for the sake of politics.