Good morning. It’s James Keller in Calgary.
The federal equalization program is a longstanding source of frustration in Alberta. The program, which is enshrined in the Constitution and designed to level the playing field between provinces with vastly different economies, fuels arguments that the province is short-changed compared with recipients such as Quebec.
Those grievances have been amplified by Premier Jason Kenney, whose election platform in 2019 promised a referendum on removing equalization from the Constitution if changes to federal environmental legislation weren’t scrapped and if provinces such as B.C. and Quebec didn’t stop objecting to pipeline proposals to bring Alberta crude to market.
Neither of those demands were met, so Mr. Kenney is pressing ahead with a referendum in October alongside municipal elections. Voters will be asked a “Yes or No” question: “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?”
Mr. Kenney has complained that Albertans contribute far more to federal programs than the province gets back, and he argues that other governments that benefit from the wealth created by the oil sector should not be standing in the way of the industry’s expansion. And while he acknowledges that a Yes vote on a provincial referendum won’t prompt immediate change, he contends that having a clear majority in a referendum calling for change would give Alberta leverage to negotiate updates to the formula, constitutional change, or some other concessions.
Legal experts have said there’s little reason to believe that the referendum will do anything. A provincial referendum isn’t binding on the federal government, and Eric Adams, a law professor at the University of Alberta, says the province already has tools available to propose constitutional changes, yet it has not done so.
For a breakdown on the referendum, what’s at stake, and how exactly the equalization program works, read my explainer on the issue.
The issue will likely factor into a potential federal election campaign, which many observers believe is just weeks away. Conservative Leader Erin O’Toole will be forced to take a position on Alberta’s referendum and whether he supports scrapping the equalization program. It’s an idea that will play well in Alberta, but could be a problem in places like Quebec, Manitoba and the Maritimes, which have all consistently received equalization payments since the program’s inception.
Mr. O’Toole attempted to head off the issue somewhat with an announcement in Calgary earlier this month, when he promised to significantly expand the fiscal stabilization program, which is designed to help provinces that experience a significant and sudden decline in revenues. Alberta would benefit the most from Mr. O’Toole’s proposal, though it would do little to address the longer-term complaints about the equalization program.
Globe columnist Gary Mason questions the conventional wisdom in Alberta that the province has been mistreated and he warns that indulging those complaints too much could pose political risks for the Conservatives:
“The Conservatives need to be careful that they don’t once again look like climate-denying dinosaurs, when it comes to their environmental platform, in a bid to curry favour with like-minded voters in some of the Western provinces. Fighting for more pipelines, for instance, seems drastically out of step with the times.”
This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief James Keller. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.