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Referendum will help Albertans kickstart national conversation about unfair Equalization, Danielle Smith

Published

3 years ago

11 minute read

This is an exert from a newsletter by Danielle Smith.  Click here to register to receive Danielle’s future newsletters.

Equalization referendum…

During the Stampede I met a pollster doing some polling on the equalization referendum in the fall. It has me worried. If the vote were held today there would be a lot of undecided. While it would likely still pass, we need the vote to be resounding so there can be no mistake how Albertans feel they are being treated.

For those of us who are diehard activists, voting “Yes” to remove equalization from the Constitution is a no brainer. When Brian Jean first proposed it I thought it was a waste of time. What’s is the point of having the province vote on a federal program? I initially thought.

Then Jean explained it to me in an interview and I thought the strategy was brilliant. By voting yes to delete a section of the Constitution it gets the ball rolling for a bigger conversation about Alberta’s role in Confederation. Under our parliamentary system – advised by court rulings and conventions – constitutional scholars say a “yes” vote will initiate a process that will unroll across the country. The federal government will be obligated to negotiate with Alberta in good faith and the other provincial legislatures will be compelled to consider a similar question in their provincial legislatures.

Here’s how it would work…
 
Here’s what could happen if we have a yes vote.

  1. The other provinces will be compelled to consider and vote on the issue. If there are 7 out of 10 representing 50 per cent of the population it will be removed from the Constitution.

Admittedly, this is an unlikely outcome. I think we could convince AB, BC, SK, ON and NF that we are all being similarly hosed under the existing equalization program, but how would you ever convince net recipients such as QC, NS, PEI, NB and MB? Still, it would get a national conversation going about why the net payers are so frustrated.

  1. If we don’t get others to agree, the principle of equalization stays in the Constitution, but we have a meaningful two-way dialogue about how it should be restructured, and that means designing it so QC no longer receives any money through the program from the rest of us.

I told you I went to the Fairness Alberta breakfast over the Stampede. Executive Director Bill Bewick is doing a terrific job digging into the numbers and explaining how absurd the entire program is.

Consider this: Newfoundland and Labrador is on the brink of bankruptcy and doesn’t qualify for equalization. Quebec has been running surpluses and paying down debt and they receive $10 billion from the program.

If I had my druthers, my starting point would be that only small provinces should be allowed to qualify for equalization. I think PEI has it particularly tough – attempting to run all the provincial programs that are available in other provinces with a population the size of Red Deer. Providing a top up for provinces in this situation is what the program should be all about. I want Islanders to have the same quality of health care, education, social services and infrastructure as we do.

But we need to be frank about this. The equalization formula has been manipulated and massaged mainly so federal politicians can give money to Quebec. Maybe it began with good intentions, as francophones began to assert themselves and their right to operate their businesses primarily in French and needed a hand up to catch up. Maybe it was justified when Quebeckers were sharply divided on whether it was worth it to stay in Canada, as evidenced by the 50-50 referendum result in 1995.

But today, it’s just taking advantage. In fact, it’s bordering on abuse.

Quebec is taking advantage of our goodwill…
 
Last week, Quebec’s Environment Minister Benoit Charette announced that Quebec would be rejecting a $14 billion project that would have seen GNL Quebec bring liquefied natural gas from Western Canada – principally Alberta – to Port Saguenay, Quebec so it could be exported on to Europe and Asia. Charette said it did not meet his standards for the environment:


“The promoter has not succeeded in demonstrating this, on the contrary,” he said, adding that the government is worried it would discourage natural gas buyers in Europe and Asia from moving to cleaner energy sources. “This is a project that has more disadvantages than advantages.”This is truly the last straw for me. If the Quebec government hates our energy industry this much and is actively working to destroy our natural gas industry I’m done with appeasement.

On the contrary, Minister…

Liquefied natural gas offers the best opportunity to reduce greenhouse gas emissions around the world. It is already “the cleaner burning fuel” as the ads used to say when I was growing up. It can easily replace coal in power plants and reduce greenhouse gas emissions in both China and India (which are adding coal-fired powerplants at a rate that dramatically exceeds the addition of wind and solar power everywhere in the world). Coupled with carbon capture and storage (underground) or utilization (for useful products including carbon nanofibre, concrete, industrial minerals, alcohol and ethylene) the greenhouse gas emissions problem can be solved. It is also going to be the base fuel for the new and emerging hydrogen economy, which will power all the heavy transportation we need to continue operating our global trade economy – marine vessels, trucks, trains, maybe even airplanes one day.

I am tired of placating the fantasy that our modern industrial economy is going to be powered by wind and solar and nothing else. Yes, hydrogen now offers a meaningful way for wind and solar to store the energy they produce, finally moving them towards being a reliable source of energy for our power grid. But once you’ve generated hydrogen at a wind or solar site, how do you transport it anywhere so it can be used for other purposes? The natural gas business can move it in pipelines. You can’t move hydrogen on powerlines.

But wind and solar are also not carbon neutral until concrete, steel, fibre glass, rare earth materials and transportation are carbon neutral. Wind and solar are not more environmentally friendly until they stop killing migratory birds and bats. Wind and solar are not environmentally neutral until we find a way to recycle them at the end of use (rather than dumping everything in a landfill).

If Quebec wants to interfere with the development of our resources, damage our economy and cost us jobs, I refuse to send them any more of our money. We cannot continue being economically hobbled by Quebec and damaged by federal government policy and expected to keep on shipping out dollars to Quebec. I would be delighted to see a financially independent, strong Quebec paying for their subsidized day care all on their own.

If they want to stand on their own two feet, bravo, let’s help them out. Let’s cut off the money pipeline.

Let’s help Quebec become financially independent…

Fairness Alberta has said three simple changes could cut the cost of the program in half and make sure Quebec is cut off almost entirely.

  1. Stop adjusting the program to increase expenditures with GDP growth. This just makes logical sense. As provinces get wealthier and develop more own-source revenue they should need fewer federal transfers.
  2. Adjust the payments to take into account inflation and different costs of delivering services in different provinces. It’s a lot more expensive to hire a nurse in Alberta than in PEI, for instance.
  3. Add four cents to Quebec hydro. Quebec subsidizes electricity rates which lowers the amount of revenues available to government. Imagine if Alberta sold oil and natural gas below market value and then asked Ottawa to make up the shortfall. It’s bananas.

None of this negotiation can happen unless Albertans send a strong message that they have had it with the status quo.

Voting yes in the referendum means you are voting to eliminate or renegotiate. Voting no means you are happy being treated as the doormat of Confederation. Vote yes and make sure to tell your neighbours and friends to also.

Because as Bill points out on his Fairness Alberta website, this particular program is only one way that extra money gets transferred out of Alberta. As of 2019, Alberta has transferred nearly $325 billion to the rest of the country. We have to start changing this. Equalization is just the start.

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Premier Smith says Auto Insurance reforms mean lower premiums and better services for Alberta drivers

Published on November 21, 2024

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Premier Smith says Auto Insurance reforms may still result in a publicly owned system

Better, faster, more affordable auto insurance

Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans while reducing auto insurance premiums.

After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, Alberta’s government is introducing a new privately delivered, care-focused auto insurance system.

Right now, insurance in the province is not affordable or care focused. Despite high premiums, Albertans injured in collisions do not get the timely medical care and income support they need in a system that is complex to navigate. When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year.

“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable. When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”

Danielle Smith, Premier

“High auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”

Nate Horner, President of Treasury Board and Minister of Finance

Albertans who suffer injuries due to a collision currently wait months for a simple claim to be resolved and can wait years for claims related to more serious and life-changing injuries to addressed. Additionally, the medical and financial benefits they receive often expire before they’re fully recovered.

Under the new system, Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. Those who sustain serious injuries will receive treatment until they are fully recovered. These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act.

Work on this new auto insurance system will require legislation in the spring of 2025. In order to reconfigure auto insurance policies for 3.4 million Albertans, auto insurance companies need time to create and implement the new system. Alberta’s government expects the new system to be fully implemented by January 2027.

In the interim, starting in January 2025, the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs, increasing vehicle damage repair costs and natural disaster costs. This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta.

Albertans have been clear that they still want premiums to be based on risk. Bad drivers will continue to pay higher premiums than good drivers.

By providing significantly enhanced medical, rehabilitation and income support benefits, this system supports Albertans injured in collisions while reducing the impact of litigation costs on the amount that Albertans pay for their insurance.

“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province.”

Nathan Neudorf, Minister of Affordability and Utilities

Quick facts

  • Alberta’s government commissioned two auto insurance reports, which showed that legal fees and litigation costs tied to the province’s current system significantly increase premiums.
  • A 2023 report by MNP shows
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Alberta

Alberta fiscal update: second quarter is outstanding, challenges ahead

Published on November 21, 2024

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Alberta maintains a balanced budget while ensuring pressures from population growth are being addressed.

Alberta faces rising risks, including ongoing resource volatility, geopolitical instability and rising pressures at home. With more than 450,000 people moving to Alberta in the last three years, the province has allocated hundreds of millions of dollars to address these pressures and ensure Albertans continue to be supported. Alberta’s government is determined to make every dollar go further with targeted and responsible spending on the priorities of Albertans.

The province is forecasting a $4.6 billion surplus at the end of 2024-25, up from the $2.9 billion first quarter forecast and $355 million from budget, due mainly to higher revenue from personal income taxes and non-renewable resources.

Given the current significant uncertainty in global geopolitics and energy markets, Alberta’s government must continue to make prudent choices to meet its responsibilities, including ongoing bargaining for thousands of public sector workers, fast-tracking school construction, cutting personal income taxes and ensuring Alberta’s surging population has access to high-quality health care, education and other public services.

“These are challenging times, but I believe Alberta is up to the challenge. By being intentional with every dollar, we can boost our prosperity and quality of life now and in the future.”

Nate Horner, President of Treasury Board and Minister of Finance

Midway through 2024-25, the province has stepped up to boost support to Albertans this fiscal year through key investments, including:

  • $716 million to Health for physician compensation incentives and to help Alberta Health Services provide services to a growing and aging population.
  • $125 million to address enrollment growth pressures in Alberta schools.
  • $847 million for disaster and emergency assistance, including:
    • $647 million to fight the Jasper wildfires
    • $163 million for the Wildfire Disaster Recovery Program
    • $5 million to support the municipality of Jasper (half to help with tourism recovery)
    • $12 million to match donations to the Canadian Red Cross
    • $20 million for emergency evacuation payments to evacuees in communities impacted by wildfires
  • $240 million more for Seniors, Community and Social Services to support social support programs.

Looking forward, the province has adjusted its forecast for the price of oil to US$74 per barrel of West Texas Intermediate. It expects to earn more for its crude oil, with a narrowing of the light-heavy differential around US$14 per barrel, higher demand for heavier crude grades and a growing export capacity through the Trans Mountain pipeline. Despite these changes, Alberta still risks running a deficit in the coming fiscal year should oil prices continue to drop below $70 per barrel.

After a 4.4 per cent surge in the 2024 census year, Alberta’s population growth is expected to slow to 2.5 per cent in 2025, lower than the first quarter forecast of 3.2 per cent growth because of reduced immigration and non-permanent residents targets by the federal government.

Revenue

Revenue for 2024-25 is forecast at $77.9 billion, an increase of $4.4 billion from Budget 2024, including:

  • $16.6 billion forecast from personal income taxes, up from $15.6 billion at budget.
  • $20.3 billion forecast from non-renewable resource revenue, up from $17.3 billion at budget.

Expense

Expense for 2024-25 is forecast at $73.3 billion, an increase of $143 million from Budget 2024.

Surplus cash

After calculations and adjustments, $2.9 billion in surplus cash is forecast.

  • $1.4 billion or half will pay debt coming due.
  • The other half, or $1.4 billion, will be put into the Alberta Fund, which can be spent on further debt repayment, deposited into the Alberta Heritage Savings Trust Fund and/or spent on one-time initiatives.

Contingency

Of the $2 billion contingency included in Budget 2024, a preliminary allocation of $1.7 billion is forecast.

Alberta Heritage Savings Trust Fund

The Alberta Heritage Savings Trust Fund grew in the second quarter to a market value of $24.3 billion as of Sept. 30, 2024, up from $23.4 billion at the end of the first quarter.

  • The fund earned a 3.7 per cent return from July to September with a net investment income of $616 million, up from the 2.1 per cent return during the first quarter.

Debt

Taxpayer-supported debt is forecast at $84 billion as of March 31, 2025, $3.8 billion less than estimated in the budget because the higher surplus has lowered borrowing requirements.

  • Debt servicing costs are forecast at $3.2 billion, down $216 million from budget.

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