Alberta has by far the highest standard of living of any province in the country; Quebec has among the lowest. Alberta’s tax burden is proportionately half of Quebec’s: 12 per cent of GDP, versus 25 per cent. Alberta has the lowest net debt-to-GDP ratio in the country, at 8 per cent; Quebec’s, at 48 per cent, is second-highest.
It was not always thus. As late as 1976, Quebec’s standard of living was within hailing distance of Alberta’s, with a median household income after taxes just six percentage points lower; by 2018, the gap had widened 27 points. To be sure, Alberta’s oil wealth is part of the explanation. But Quebec hasn’t just fallen behind Alberta: It has also fallen behind the rest of Canada, from three points off the national average in 1976 to 13 points 20 years later, where it has remained.
Quebec doesn’t lack for resource wealth of its own, with its abundant hydro-electric, forest and mineral endowments. The difference, rather, has been policy: the long flirtation with separation, so devastating to business confidence, but also the underlying fascination with state power and who holds it. Two generations of Quebec nationalists made careers out of demanding the “tools” of government from Ottawa, on the claim that local control would lead to better outcomes. The result was the opposite.
So naturally, when it comes to redefining Alberta’s place in the federation, Alberta’s discontented political class looks to … Quebec.
La belle province has long occupied a strange dual role in the rhetoric of western grievance – scorned for its reliance on Alberta’s oil (via equalization), but admired for its unblinking readiness to play hardball with the rest of Canada, to the point of threatening to leave if it does not get its way.
Of late, Alberta’s complaints have indeed taken on much of the same tone as Quebec’s, in an effort to invest what would otherwise appear to be a straightforward fight about money – “we’re tired of underwriting the rest of the country” – with the mystic sense of destiny that has traditionally inspired Quebec nationalists. There is the same heightened sensitivity to humiliation, the same obsession with the differences, real or alleged, said to mark the province off from the rest of Canada, and, increasingly, the same fascination with state power as both the emblem of its difference and the remedy for its humiliation.
The report of Alberta’s Fair Deal Panel, struck by Premier Jason Kenney shortly after the last federal election, is a case in point. It is fairly drenched in Quebec envy, not only in its language – Quebec is mentioned 56 times in its 68 pages – but in its recommendations. It isn’t just the headline-grabbing proposals: a provincial police force, a provincial pension plan, possibly even a separate provincial income-tax form, just like Quebec’s. It’s woven throughout.
“More control” over immigration. A “seat at the table” in negotiations on international agreements. Restrictions on federal spending power. Opting out of shared-cost social programs, with compensation. Possibly a provincial constitution, but certainly an “urgent need” to affirm “in law and government policy, Alberta’s cultural, economic and political uniqueness.” While the panel disavows the use of direct threats to secede as a negotiating strategy, it is not above the indirect threat, observing that if its demands are not met, “support for secession will only grow” – the same good cop-bad cop routine beloved of Quebec’s “federalist” leaders.
Indeed, the report’s signature proposal, a provincial referendum on equalization, is taken straight out of the Quebec nationalist playbook. While the referendum would ostensibly be about whether equalization should be removed from the Constitution, the threat is obviously intended as a negotiating tactic, with a view to forcing the rest of the country to agree to reform of the program: a softer “knife at the throat” than secession, but still a knife at the throat.
The proposal takes its inspiration from the Supreme Court’s 1998 Secession Reference, wherein the court discovered a constitutional “duty to negotiate” on the part of the rest of Canada in the event the people of “a province,” not just Quebec, were to vote in favour of “an amendment to the Constitution,” not just secession. The madness of that invention may now be more apparent than it was at the time.
And it is madness. If there is a quality that Alberta’s nationalists share with their Quebec brethren – aside from the whiny self-absorption – it is hubris, to the point of delusion. The other provinces, most of them recipients of equalization, are not going to agree to redraw the program to Alberta’s designs just because Albertans voted they must, nor would the federal government, whose constitutional jurisdiction it is, do so in the face of such widespread opposition. All the referendum will do is whip up expectations that must inevitably be dashed, with much subsequent bitterness – again, much as we have seen in Quebec.
As for the notion of withdrawing from the Canada Pension Plan, I admit to some conflict. The CPP investment fund is an out-of-control monstrosity, its costs now exceeding $3.4-billion (they were $3.7-million 20 years ago), its payroll swollen to more than 1,800 full-time employees (from five), all in pursuit of the same fools’ gold: consistent above-market returns, with which promoters of such “active management” strategies bilk the gullible.
But the alternative to a bloated, activist federal pension plan is not a bloated, activist provincial pension plan. I’d cite the record of the Quebec Pension Plan here, which is notorious enough, but Alberta has its own experience of state-directed investment debacles, from the original Alberta Heritage Savings Trust Fund (AHSTF) to the Alberta Investment Management Corp., which, in addition to the AHSTF, manages the province’s public service pension funds. It was most recently in the news for betting that stock markets would remain stable, shortly before they fell off a cliff, to the tune of at least $2.1-billion.
If, on the other hand, Alberta were to withdraw from the CPP in favour of a system of mandatory individual savings plans, along Australian or Singaporean lines, it would be serving not only its own interests, but the country’s.
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Andrew Coyne