What Alberta has a right to be mad about
Encana, equalization, and pipelines
The point sometimes arrives in politics when a complex of different issues coalesce into one; when people stop listening to the arguments in favour of or against each, and instead allow their emotions to dictate a single response to the lot. We are at such a point in Alberta.
Pipelines, carbon taxes, equalization, the Canada Pension Plan — to which familiar litany we can now add the departure of Encana’s headquarters from Calgary — have become, not so much issues in themselves, but arguments in another, grander meta-controversy. All of the questions raised by each (is there a problem? if so, how is it to be solved? who pays? etc) have been puréed into a single narrative: of a Liberal government that is at best indifferent and at worst hostile to Alberta, whose re-election confirms the rest of Canada is as well.
There is, it should be said, some truth in this. Whether the Liberals have failed to win more than a handful of seats in Alberta in over a half a century because of their historic disdain for the province, or whether the causation runs the other way, the chicken is as malignant as the egg. There’s no doubt some people in some parts of the country would cheerfully shut down the oilsands tomorrow, nor is it impossible to detect a strain of anti-albertanism in some of the rhetoric on the subject.
Albertans, for their part, are not just in a fight to defend their major industry today, but have been for decades. It is inconceivable, to take the most obvious example, that the National Energy Program, that vast attempt to expropriate Alberta’s oil wealth for the benefit of central-canadian oil consumers, would have been visited upon either Ontario or Quebec, were the situations reversed.
But not everything can be fitted into the NEP mould, nor is every poorly designed or disproportionately benefited program part of the same plot to do in Alberta. Albertans have every right to be outraged, for example, by the obstructionism of political leaders in British Columbia and Quebec on the pipeline file, and by the federal negligence and cowardice that enabled them.
But if and when the Trans Mountain pipeline expansion is completed, there should equally be some acknowledgment of the federal action that made that possible, and of the political price that was paid for it.
In any event, the real fight is now over the future of pipelines, rather than the past. There are legitimate critiques to be made of Bill C-69, legislation passed earlier this year establishing a new process for approving major infrastructure projects. Its critics may be right that it will make future pipeline construction impossible. But that is yet to be determined. And the law is not set in stone. Efforts to have it amended are likelier to bear fruit if supported by reason and evidence than by accusations of bad faith.
On equalization, likewise, Alberta has a point — up to a point. The program is an undoubted mess, the product of a series of ill-conceived “reforms” that have taken it far from its original purpose. The cost of the program is mandated by law to increase by a fixed amount every year, for example, regardless of whether the fiscal capacities of the various provinces have grown more or less equal. Some “have-not” or recipient provinces end up with more per capita revenues than the “have,” or non-recipient, provinces, while others may be deterred by the potential loss of these benefits from developing their economies as fully as they might.
But the reason Alberta is not eligible for equalization has nothing to do with any conspiracy against its interests. It is the same reason, in the main, why Albertans generally pay more into the federal treasury than the federal government spends in the province: because Alberta is so much richer than other provinces — yes, even today, five years after the oil price collapse. At roughly $77,000, Alberta’s per capita GDP far outstrips that of virtually every other province; only its oilpatch cousin, Saskatchewan, is close. It is 53 per cent more than Ontario’s, 67 cent more than Quebec’s, more than twice Nova Scotia’s.
That is why the province, though it has by far the lowest taxes in the country — own-source revenues account for just 12 per cent of GDP in Alberta, versus nearly 20 per cent elsewhere — is still able to raise more revenues per capita, and spend more, than most other provinces. The notion that people in provinces that are poorer, on average, than Alberta — whose governments tax more and spend less than it does — should be compelled to subsidize Alberta’s government via equalization is a complete non-starter.
As for Encana’s much-anticipated relocation, however baleful the symbolism (and however tone-deaf the Liberal response), there is in fact little evidence that it has anything to do with federal energy policy — the company has explicitly denied it — and lots of reason to think it has more to do with factors outside of government control: the state of the industry generally, the company’s own problems and strategies.
Critics are, again, probably right to complain that if the company were based in Quebec or Ontario, the federal government would be moving heaven and earth to persuade it to stay (see: Snclavalin). That may make the case for federal hypocrisy. It’s not an argument that it should do the same in this case.
THE REASON ALBERTA IS NOT ELIGIBLE FOR EQUALIZATION HAS NOTHING TO DO WITH ANY CONSPIRACY.