From the Fraser Institute

By Niels Veldhuis and Tegan Hill

Last week, B.C. Premier David Eby proposed new legislation to give himself and his cabinet sweeping powers to unilaterally change almost any provincial law and regulation without legislative approval or review. While the legislation—dubbed the Economic Stabilization (Tariff Response) Act—has yet to be enacted into law, the fact that the government proposed such unprecedented powers is deeply concerning and a genuine threat to our democracy.

Only five months ago, British Columbians went to the polls and delivered a sobering victory to Eby’s incumbent NDP government, which lost 8 of its 55 seats and ended up with 47 of 93 seats, the narrowest “majority” possible. The popular vote was nearly dead-even between the NDP (44.86 per cent) and the upstart Conservative Party (43.28 per cent).

Even Premier Eby acknowledged the voters sent his government a message and promised to work together with other parties. “After a close and hard-fought campaign, it’s now time to come together to deliver for people,” he said. “British Columbians have asked us to work together and make life better for them.”

“Work together” in a democracy means embracing a deliberative and, at times, messy process. Thoughtful policymaking takes time. It’s a core feature of democracy. No leader has all the knowledge to act unilaterally to do what’s right. We need the legislature to weigh competing viewpoints through rigorous and transparent debate—that’s how our system works.

Yet according to the Eby government, the Economic Stabilization (Tariff Response) Act will lead to the opposite and provide “temporary authority to cabinet… to modify the application or effect of B.C. laws and regulations.” In other words, if approved, it will allow Premier Eby and his cabinet to override provincial laws, regulations, bylaws, rules, resolutions, practices, policies, standards, procedures and other measures without approval or review by the elected legislature. That’s not how our system is supposed to work.

To put it more starkly, the Eby government is telling British Columbians that 23 cabinet ministers and four ministers of state can sufficiently decide almost any matter pertaining to the government without democratic approval or input from opposition parties. It is by all measures an extraordinary circumvention of the province’s democratic institutions.

Premier Eby, of course, knows the extraordinary nature of this type of undemocratic authority. “In extraordinary times,” he told reporters last week, “we need extraordinary powers.” And he wants these extraordinary powers for the next two years.

While President Trump’s tariffs are terrible economic policy and very damaging to Canada and other countries, many governments throughout history have tried these policies. Like in the past, our politicians and policymakers must deal with tariffs and other economic challenges purposefully and deliberately within democratic constraints, which include transparent debates, reviews, re-assessments, and genuine deliberations that include opposition parties.

Instead, Premier Eby wants absolute power and control.

As British Columbians will no doubt conclude, there’s something fundamentally wrong with suspending democracy because we’re in challenging times. We often deal with significant challenges. Should our governments have suspended democracy in the wake of 9/11, the limited outbreak of SARS, the financial crisis of 2008-09 or COVID?

Finally, this dim view of democratic constraints is not new to the Eby government. Just last year, Premier Eby tried to pass one of the most significant and fundamental legislative changes in B.C. history, giving more than 200 First Nations veto power over land-use decisions in the province. Eby hoped to rush his legalisation through the legislature without full transparency or meaningful public input, and without disclosing any analysis of its economic impact. When British Columbians caught wind of his plan, there was an uproar, and before October’s election, Eby shelved the legislation (for now, at least).

Here we are again, mere months later, with Premier Eby wanting to make unprecedented changes to our democracy in response to an economic policy from another democratically elected government that, while damaging, is hardly an existential threat.

To call the Economic Stabilization (Tariff Response) Act a significant overreach would be a gross understatement. It’s an affront to our democracy.

Niels Veldhuis

President, Fraser Institute

Tegan Hill

Director, Alberta Policy, Fraser Institute

From the Fraser Institute

By Tegan Hill and Nathaniel Li

Albertans contributed $53.6 billion more to CPP then retirees in Alberta received from it from 1981 to 2022

Albertans’ net contribution to the Canada Pension Plan —meaning the amount Albertans paid into the program over and above what retirees in Alberta
received in CPP payments—was more than six times as much as any other province at $53.6 billion from 1981 to 2022, finds a new report published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“Albertan workers have been helping to fund the retirement of Canadians from coast to coast for decades, and Canadians ought to know that without Alberta, the Canada Pension Plan would look much different,” said Tegan Hill, director of Alberta policy at the Fraser Institute and co-author of Understanding Alberta’s Role in National Programs, Including the Canada Pension Plan.

From 1981 to 2022, Alberta workers contributed 14.4 per cent (on average) of the total CPP premiums paid—Canada’s compulsory, government- operated retirement pension plan—while retirees in the province received only 10.0 per cent of the payments. Alberta’s net contribution over that period was $53.6 billion.

Crucially, only residents in two provinces—Alberta and British Columbia—paid more into the CPP than retirees in those provinces received in benefits, and Alberta’s contribution was six times greater than BC’s.

The reason Albertans have paid such an outsized contribution to federal and national programs, including the CPP, in recent years is because of the province’s relatively high rates of employment, higher average incomes, and younger population.

As such, if Alberta withdrew from the CPP, Alberta workers could expect to receive the same retirement benefits but at a lower cost (i.e. lower payroll tax) than other Canadians, while the payroll tax would likely have to increase for the rest of the country (excluding Quebec) to maintain the same benefits.

“Given current demographic projections, immigration patterns, and Alberta’s long history of leading the provinces in economic growth, Albertan workers will likely continue to pay more into it than Albertan retirees get back from it,” Hill said.

Understanding Alberta’s Role in National Programs, Including the Canada Pension Plan

• Understanding Alberta’s role in national income transfers and other important programs is crucial to informing the broader debate around Alberta’s possible withdrawal from the Canada Pension Plan (CPP).
• Due to Alberta’s relatively high rates of employment, higher average incomes, and younger population, Albertans contribute significantly more to federal revenues than they receive back in federal spending.
• From 1981 to 2022, Alberta workers contributed 14.4 percent (on average) of the total CPP premiums paid while retirees in the province received only 10.0 percent of the payments. Albertans net contribution was $53.6 billion over the period—approximately six times greater than British Columbia’s net contribution (the only other net contributor).
• Given current demographic projections, immigration patterns, and Alberta’s long history of leading the provinces in economic growth and income levels, Alberta’s central role in funding national programs is unlikely to change in the foreseeable future.
• Due to Albertans’ disproportionate net contribution to the CPP, the current base CPP contribution rate would likely have to increase to remain sustainable if Alberta withdrew from the plan. Similarly, Alberta’s stand-alone rate would be lower than the current CPP rate.

Nathaniel Li

Senior Economist, Fraser Institute