Alberta
Albertans continue to contribute disproportionately to Canadian federalism
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From the Fraser Institute
By Tegan Hill
Net contribution totaled $244.6 billion between 2007 and 2022
Between 2007 and 2022, Albertans continued to contribute disproportionately to Canadian federalism in terms of the amount of federal taxes paid versus federal spending in the province, finds a new study published today by the Fraser Institute, an independent non-partisan Canadian think-tank.
“It’s clear that Albertans continue to disproportionately contribute to the economic success of the country and to federal finances,” said Tegan Hill, director of Alberta Policy at the Fraser Institute and co-author of Understanding Alberta’s Outsized Contribution to Confederation.
Overall, from 2007 and 2022, Albertans’ contributed $244.6 billion to the federal government in taxes and other payments in excess of the money Ottawa spent or transferred to Alberta – more than five times as much as was contributed (on net) by either British Columbians or Ontarians. The other seven provinces, and most notably Quebec were net recipients of federalism, meaning the amount of revenues collected by the federal government in those provinces was exceeded by the amount of money spent or transferred by Ottawa back to the provinces.
“When Alberta’s economy is strong and prosperous, it benefits the entire nation,” commented Hill.
In 2022, Alberta’s inflation-adjusted GDP growth was the fastest in the country (5 per cent), it also reported the fastest private sector employment growth (7.8 per cent), the highest level of business investment per private sector worker ($36,412) and had the highest net interprovincial migration (56,245 people).
“It is the economic success of Alberta that leads to Albertans contributing more to Canadian federalism than other provinces, which is absolutely something to be encouraged rather than discouraged,” said Hill.
- When Alberta is economically strong, all Canadians benefit, because money is redistributed to other parts of Canada.
- In 2022, despite restrictive federal policies, Alberta continued to contribute disproportionately to the federation.
- Alberta’s 5.0% real GDP growth rate was the fastest in Canada in 2022, accounting for 17.9% of Canada’s real GDP growth, despite being home to 11.6% of the population.
- In 2022, 56,245 Canadian residents relocated to Alberta, representing more than 75% of total net in-migration within Canada.
- Alberta reported the fastest private sector employment growth among the provinces (7.8%) in 2022, accounting for 19.2% of private sector jobs created in Canada.
- Per private sector worker, Alberta attracted $36,412 of business investment, more than double the national average (excluding Alberta).
- From 2007 to 2022, Alberta’s net contribution to the federal finances totalled $244.6 billion—more than five times as much as BC’s ($46.9 billion) or Ontario’s ($41.9 billion). In 2022, Alberta contributed $14.2 billion more to federal revenues than it received back in federal spending.
- If Alberta were an “average contributor” based on the other provinces, rather than a large net contributor, the federal government would have had a fiscal shortfall of $16.9 billion in 2022. For perspective, to cover this net revenue loss, the federal GST rate would need to increase from 5.0% to 7.2%.
- Put simply, without Alberta’s oversized contribution to the federation, Canada would be worse off. To benefit all Canadians, the federal government should focus on supportive policies, not restrictive ones.
Authors:
Alberta
Open letter to Ottawa from Alberta strongly urging National Economic Corridor
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Canada’s wealth is based on its success as a trading nation. Canada is blessed with immense resources spread across a vast country. It has succeeded as a small, open economy with an enviable standard of living that has been able to provide what the world needs.
Canada has been stuck in a situation where it cannot complete nation‑building projects like the Canadian Pacific Railway that was completed in 1885, or the Trans Canada Highway that was completed in the 1960s. With the uncertainty of U.S. tariffs looming over our country and province, Canada needs to take bold action to revitalize the productivity and competitiveness of its economy – going east to west and not always relying on north-south trade. There’s no better time than right now to politically de-risk these projects.
A lack of leadership from the federal government has led to the following:
- Inadequate federal funding for trade infrastructure.
- A lack of investment is stifling the infrastructure capacity we need to diversify our exports. This is despite federally commissioned reports like the 2022 report by the National Supply Chain Task Force indicating the investment need will be trillions over the next 50 years.
- Federal red tape, like the Impact Assessment Act.
- Burdensome regulation has added major costs and significant delays to projects, like the Roberts Bank Terminal 2 project, a proposed container facility at Vancouver, which spent more than a decade under federal review.
- Opaque funding programs, like the National Trade Corridors Fund (NTCF).
- Which offers a pattern of unclear criteria for decisions and lack of response. This program has not funded any provincial highway projects in Alberta, despite the many applications put forward by the Government of Alberta. In fact, we’ve gone nearly 3 years without decisions on some project applications.
- Ineffective policies that limit economic activity.
- Measures that pit environmental and economic objectives in stark opposition to one another instead of seeking innovative win-win solutions hinder Canada’s overall productivity and investment climate. One example is the moratorium on shipping crude through northern B.C. waters, which effectively ended Enbridge’s Northern Gateway proposal and has limited Alberta’s ability to ship its oil to Asian markets.
In a federal leadership vacuum, Alberta has worked to advance economic corridors across Canada. In April 2023, Alberta, Saskatchewan and Manitoba signed an agreement to collaborate on joint infrastructure networks meant to boost trade and economic growth across the Prairies. Alberta also signed a similar economic corridor agreement with the Northwest Territories in July 2024. Additionally, Alberta would like to see an agreement among all 7 western provinces and territories, and eventually the entire country, to collaborate on economic corridors.
Through our collaboration with neighbouring jurisdictions, we will spur the development of economic corridors by reducing regulatory delays and attracting investment. We recognize the importance of working with Indigenous communities on the development of major infrastructure projects, which will be key to our success in these endeavours.
However, provinces and territories cannot do this alone. The federal government must play its part to advance our country’s economic corridors that we need from coast to coast to coast to support our economic future. It is time for immediate action.
Alberta recommends the federal government take the following steps to strengthen Canada’s economic corridors and supply chains by:
- Creating an Economic Corridor Agency to identify and maintain economic corridors across provincial boundaries, with meaningful consultation with both Indigenous groups and industry.
- Increasing federal funding for trade-enabling infrastructure, such as roads, rail, ports, in-land ports, airports and more.
- Streamlining regulations regarding trade-related infrastructure and interprovincial trade, especially within economic corridors. This would include repealing or amending the Impact Assessment Act and other legislation to remove the uncertainty and ensure regulatory provisions are proportionate to the specific risk of the project.
- Adjusting the policy levers that that support productivity and competitiveness. This would include revisiting how the federal government supports airports, especially in the less-populated regions of Canada.
To move forward expeditiously on the items above, I propose the establishment of a federal/provincial/territorial working group. This working group would be tasked with creating a common position on addressing the economic threats facing Canada, and the need for mitigating trade and trade-enabling infrastructure. The group should identify appropriate governance to ensure these items are presented in a timely fashion by relative priority and urgency.
Alberta will continue to be proactive and tackle trade issues within its own jurisdiction. From collaborative memorandums of understanding with the Prairies and the North, to reducing interprovincial trade barriers, to fostering innovative partnerships with Indigenous groups, Alberta is working within its jurisdiction, much like its provincial and territorial colleagues.
We ask the federal government to join us in a new approach to infrastructure development that ensures Canada is productive and competitive for generations to come and generates the wealth that ensures our quality of life is second to none.
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Devin Dreeshen
Devin Dreeshen was sworn in as Minister of Transportation and Economic Corridors on October 24, 2022.
Alberta
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