Is equalization really unfair to Alberta?

While we're all still exercised about Alberta separatism - hopefully that will fade soon, now we know that Albertans don't actually want to separate from Canada - let's look at one of the main irritants that the separatists bring up time and time again: equalization payments, and specifically how unfair Albertans think they are.

Many provinces have complained about equalization payments at one time or another - Newfoundland, Ontario, even Quebec - but there is nothing inherently unfair about the idea of equalization payments, and only the most churlish or egocentric Albertan would claim that (were they to even think about it, that is - many separatists that use unfair equalization payments as an arguing point are just repeating the claims of separatist agitators without even understanding what they are or how they work).

Equalization was brought into the Canadian federal system in the 1950s, although its formulation has been changed a few times over the years (the current formula was designed by by an Albertan head of an expert panel under an Albertan Prime Minister, Stephen Harper). It was enshrined in the Canadian Constitution in 1982. 

It aims to ensure that all Canadian provinces can provide reasonably comparable public services at reasonably comparable tax rates, based on each province's "fiscal capacity" (it's ability to raise its own revenues). So, money is taken from the richer provinces and reallocated to the poorer ones. We are, after all, just one country, and not all parts of it were blessed with natural resources and useful geography. 

Thus, mainly by virtue of their vast mineral wealth and booming economies, British Columbia, Alberta and Saskatchewan (the "have provinces") are net contributors; the other ("have-not") provinces are net recipients, to greater or lesser degrees (a little to Ontario and Newfoundland, a lot to Quebec, Manitoba, Nova Scotia, New Brunswick and PEI). Just as an aside, contributing provinces like Alberta don't "pay into" the equalization program as such, even if many separatists like to give that impression; it's a federal program funded by federal taxes on individuals and corporations.

Alberta's economy is the strongest in Canada; it doesn't need extra help. Using a complicated but consistent formula based on notional average tax rates, Alberta could raise over $17,000 per person, $4,000 than BC, $7,000 more than Quebec, and $10,000 more than PEI. The system is not perfect: it can be argued that it might encourage provinces to keep their taxes high, under-invest in resources, or undercharge for its electricity (a major bugbear of separatist Albertans). Butprovinces can still have their own distinctive economic policies, even if other provinces object to them, like Quebec's cheap electricity rates and its fracking ban, or Alberta's decision not to impose a sales tax like every other province.

Alberta may not like some elements of the equalization program, but the fact that there are regional winners and losers does not in itself make the program unfair to Alberta. That's just life, the way it is. Even with an equalization program, Alberta is still by far the richest province in Canada.

Whither Alberta (and Danielle Smith) now?

Alberta votes in its ten-question referendum in just a couple of days time. The conventional wisdom is that Albertans will vote overwhelmingly to stay in Canada, although that will only happen if the remain faction is not so complaisant that it forgets to vote.

Either way, commentators are already thinking about what will happen AFTER the vote. Premier Danielle Smith seems to think that everyone should just sigh "Ah, well" and move on, and has vowed never to revisit the issue on her watch. But that seems disingenuous. Separatist sentiment will continue to simmer regardless - it's where the far right in the province is currently hanging their Stetson hat, after previous forays into anti-vaccination policies, the "Freedom Convoy", parental rights and anti-trans sentiment. The referendum has, to some extent at least, legitimized the Alberta separatist movement, whatever its eventual outcome. And, much like with Brexit, the remain camp seem much less energized, urgent and motivated than the leavers, despite the existential nature of the issue, so anything could happen.

As in Quebec, Alberta separatism will not just dissipate into the ether after the referendum, but will continue to fester, at least until Donald Trump leaves power (if that ever happens) when it may see a resurgence. This is especially true if the independence vote achieves the possible-but-unlikely threshold of, say, 40%, which it could do with the addition of voters who don't really want to separate but who want to "send a message to Ottawa", or just a register a protest in some way.

Leading separatists have been very clear that they are not going away: "Regardless of what happens on Monday, we've already won ... we are going to build on our successes, build on our relationships", says one. Of course, this could just be a way of lowering expectations before a vote they will almost certainly lose. But it's also a declaration of intent for the future.

To some extent, the damage has already been done. It's quite possible that the very fact that a separation movement exists, and that it says it will continue to agitate in the future, will act as a dampener on investment in the province, particularly foreign investment. Much as happened in separatist-riven Quebec in the 1980s and 1990s, many companies will be loath to risk new investment money, and may even move out existing investments and representation. The separatists who say they want tot make Alberta stronger may just have weakened it for many years to come.

Meanwhile, the Alberta populace will remain deeply divided and irreconcilable. One interesting study looked at the attitudes of separatists and federalists towards each other. It found that, while most separatists did not have strong feelings either way about their federalist opponents, most federalists were quite bitterly resentful of the secessionists who have put their province at risk in this way. 

Whatever the outcome of the vote, Alberta may have soured and scared off many potential investors, and that's largely on Premier Smith for enabling the separatist vote as she has, regardless of her own opinions on the matter (if indeed you believe what she says). For some time now, she has been walking a very narrow tightrope between left and right (or, rather, between right and far right). 

The next provincial election is coming up in almost exactly a year's time. Most opinion polls put Ms. Smith and her United Conservative Party in a statistical dead heat with the opposition NDP, and her own personal populatity has dropped to new lows. Some think she might call an early snap election (colloquially known as "pulling an Eby") before her chances sour still further, although that could easily backfire (à la Eby). If the remain vote, which she professes to support, prevails, then the influential separatist faction within her own party would of course be baying for her removal (many already are). Or, who knows, maybe Alberta's far right will just latch onto another issue they see as worthy of their attention (and which may be easier to achieve).

It's tempting just to flip off would-be separatists, and tell them to grow up and get real. Or just move to Montana already (I can't get Frank Zappa's Montana out of my mind: "Movin' to Montana soon, gonna be a dental floss tycoon".)

Either way, Ms. Smith has made her bed and now must lie in it. Don't expect her to get much shut-eye, though.

UPDATE

Question 10 of the referendum -.whether Alberta should pursue separation - was defeated soundly, by an even greater margin than most people predicted (76%-24%). No big surprise there.

Separatists like Let Alberta Decide co-chair Keith Wilson, of course, can just double down on their "I think we've won" claim, regardless of the results. The more ambitious, like Jeffrey Rath of the Alberta Prosperity Society, can use it as a (rather wobbly) plank in their campaign to wrest control of the UCP from Danielle Smith, despite the fact that she handed the separatists a referendum on a platter, almost singlehandedly.

All of this may be just an indication of just how far their heads are up their arses. But it's more a reflection of how little the separatists had to lose in this referendum. If they had won, then their raison d'être could be considered fulfilled. Now that they've lost, they can still use the fact that a referendum was held at all as validation of their cause. You can out a positive spin on pretty much anything if you try! 

But it's illuminating that only about a third of those who voted to pursue a separation referendum actually want to separate (this from an Abacus Data poll). The rest voted for Option 2 for other reasons, like "to get a better deal with Canada", "to send a message to Ottawa", or just because they feel they "deserve a direct say on separation" (i.e. just because).

As for Danielle Smith, you could argue that she deliberately engineered this whole thing in order to shore up her own shaky position within a terminally divided UCP, by offering a sop to the substantial separatist element in her party. In the end, though, she is despised by the separatists for not doing enough, and disliked by the federalist contingent for risking the province and its future by enabling a referendum inntge first place. Her position is now shaker than ever, with both sides calling for her resignation, and her personal populatity has fallen to an all-time low in recent weeks.

She also may have damaged the UCP's chances in the next election. A Pollara poll taken between 2nd and 15th October shows the Alberta NDP with a four-point lead over the UCP. As a political strategy, then, it can only be described as a fiasco, a debacle, a washout, whatever epithet you prefer. 

I've seen many articles expressing some variation on the idea that the vote should not be taken as an endorsement of the status quo, because 24% of Albertans voted to pursue a referendum on spearation, and much work remains to be done to placate the would-be separatists, yada, yada. I disagree. A 76%-24% vote is exactly that: a resounding endoresment of the status quo and a strong refutation of the minority view that Alberta should go it alone.

Toronto's gridlock is actually getting better, not worse

Believe it or believe it not, statistics show that the horrendous traffic in Toronto's downtown is actually getting better.

A measurement called the Traffic Time Index (TTI), used by many cities around the world, compares rush hour traffic times to times when traffic is flowing freely. A TTI of 2.0, for example, indicates that traffic takes twice as long in rush hour as when there's little or no traffic.

This July, Toronto's city-wide TTI came in at 1.587, using navigation data from an arms-length third party. In July of 2025, this figure was 1.698, in July 2024 it was 1.738. If we were to go back to June 2018, Toronto's TTI was an embarrassing 2.324. 

It's unclear to me how this metric differs from that used in its global statistics by Tom Tom, which has Toronto with a traffic index of 47.7% (equivalent to a TTI of 1.477), significantly better than many American, British and European cities, and a world away from Mexico City's 75.9% congestion. But Tom Tom too has Toronto's congestion as improving, as does INRIX's rankings.

Construction is the biggest single contributor to gridlock in Toronto. In July 2024, a huge 18% of Toronto's road capacity was closed for construction. More recent figures are not available, but presumably it has gone down, even if it doesn't feel look it on the ground.

So, by these metrics, Toronto's traffic is not great but not that bad. Importantly, it's improving annually. So, Mayor Olivia Chow, currently standing for re-election, can justifiably claim that measures like increasing traffic agents at major intersections, reducing construction closures, and adjusting traffic signal priorities, are all having a positive effect, even if it doesn't really feel like it in practice.

Traffic and gridlock has emerged as a top issue with voters in the current mayoral race. This report is well-timed to give Ms. Chow a boost.

The commonest birthdays in Canada

Here's a fun thing, for a change: a graphic of the most common birthdays in Canada, based on data from the last 30 years.

Unsurprisingly, February 29th is the least common followed by dates on or around Christmas and New Year - no-one wants to be in labour on Christmas Day or New Year's Eve, and hospital staff definitely don't want them to be.

The most popular birthday is 20th September, for no good reason that I can see. In fact, 9 of the 10 most popular days are in September.

In broader terms, the summer months (lighter colours on the chart) are the period of the most common birthdays, while the winter months (darker colours) are the least common. And it's a pretty stark dichotomy; the only real exceptions are July 1st and 2nd (Canada Day, go figure!)

The other nine questions

We've heard a lot about the independence question in Alberta's upcoming referendum (October 19th). We've heard relatively little about the other nine questions on the ballot. What are they, and what do people need to know about them?

Question 1: Do you support the Government of Alberta taking increased control over immigration for the purposes of decreasing immigration to more sustainable levels, prioritizing economic migration, and giving Albertans first priority on new employment opportunities?

This four-part question is one of the more confusing ones. Are people voting on the first part, all of the parts, any of the parts? I guess they are (deliberately) leaving their options open. Alberta is trying to achieve what Quebec already has, although Quebec's circumstances were (and are) quite different. In particular, it's not clear what "sustainable" means in this context, nor even who would qualify as an "Albertan". This also comes at a time when immigration into Alberta is nose-diving after a surge from 2022-2024.

Question 2: Do you support the Government of Alberta introducing a law mandating that only Canadian citizens, permanent residents and individuals with an Alberta-approved immigration status will be eligible for provincially-funded programs, such as health care, education and other social services?

What does "Alberta-approved" mean here? What criteria will be set for "approval"? This could represent a drastic change, as currently all temporary residents are eligible for these services. 

Question 3: Assuming that all Canadian citizens and permanent residents continue to qualify for social support programs as they do now, do you support the Government of Alberta introducing a law requiring all individuals with a non permanent legal immigration status to reside in Alberta for at least 12 months before qualifying for any provincially-funded social support services?

Which social support programs will be off-limits to new temporary residents? All of them? The government's explanatory website suggests that this actually means childcare subsidies, student aid, income supports and other benefits, but not health care or education - this is far from clear. Premier Smith has previously indicated that temporary residents cost the public system $1 billion for health care and education, but this is disputed by some experts, and ignores the fact that many immigrants actually arrive in Canada healthier than many Canadian-born residents, and use fewer health resources.

Question 4: Assuming that all Canadian citizens and permanent residents continue to qualify for public health care and education as they do now, do you support the Government of Alberta charging a reasonable fee or premium to individuals with a non-permanent immigration status living in Alberta for their and their family's use of the health care and immigration systems?

Yet another question aimed at making temporary residents unwelcome in Alberta, this question, as with the others, does not make it clear whether it applies to current temporary residents or just future ones. And what exactly does "a reasonable fee or premium" mean? (A figure of $1,900 for healthcare alone has been posited, although who knows where that came from. Also, when would this (and any other potential changes) come into force? Again, rumour has it that it might only start after the next election, which is scheduled for October 2027 (and presumably only if the UCP actually wins that election).

Question 5: Do you support the Government of Alberta introducing a law requiring individuals to provide proof of citizenship, such as a passport, birth certificate or citizenship card, to vote in an Alberta election?

This one presumably WOULD come into force before the next election! Elections Alberta already requires proof of address and accepts any of 50 different forms of identification, so it's not clear what problem this measure is supposed to address. The electoral agency has reported only four instances of ineligible voters in the last ten years, and it already verifies voters' citizenship when individuals are added to the electoral roll. Anything more seems redundant.

Question 6: Do you support the Government of Alberta working with the governments of other willing provinces to amend the Canadian Constitution to have provincial governments, and not the federal government, select the justices appointed to provincial King's Bench and Appeal courts?

Ms. Smith seems to think that Alberta has "distinct legal traditions", even though they are really just the same as those of other provinces. As with all other provinces, the current system appoints judges through a judicial advisory committee, which has representatives from the province as well as from the federal government. Plus, any change to the Canadian Constitution would require the agreement of at least seven provincial legislatures covering at least 50% of the country's population, not just "other willing provinces". So, not going to happen.

Question 7: Do you support the Government of Alberta working with the governments of other willing provinces to amend the Canadian Constitution to abolish the unelected federal Senate?

The allocation of Senate seats between provinces is admittedly unrepresentative for historical reasons, and the western provinces (BC, Alberta, Saskatchewan and Manitoba) are under-represented. The solution to this, however, is not to abolish the Senate but to reform it. In addition to the same requirement to even open the Constitution noted above, the Senate could not be abolished without the  agreement of all ten provinces. Not going to happen.

Question 8: Do you support the Government of Alberta working with the governments of other willing provinces to amend the Canadian Constitution to allow provinces to opt out of federal programs that intrude on provincial jurisdiction such as health care, education and social services, without a province losing any of the associated federal funding for use in its social programs?

Essentially, Alberta to have its cake and eat it. It wants to continue to receive the billions of dollars in federal funding to help run its programs, but is unwilling to accept the strings attached (e.g. complying with federal laws). If a province is not willing to accept the terms of the transfers, then why should they get the transfers? It's a bit like taking out a bank loan and refusing to pay the interest. Plus, to even open the Canadian Constitution ... yada, yada.

Question 9: Do you support the Government of Alberta working with the governments of other willing provinces to amend the Canadian Constitution to better protect provincial rights from federal interference by giving a province's laws dealing with provincial or shared areas of constitutional jurisdiction priority over federal laws when the province's and federal laws conflict?

This would be a dramatic reshaping of the country's constitutional order, and is an extension, or a "rephrasing", of Smith's signature Alberta Sovereignty Within A United Canada Act of 2022, much of which remains to be tested for legality and constitutionality. Federal legislation applies around the country, almost by definition, and that is unlikely to ever change (nor should it). The Constitution is very clear on what is federal jurisdiction and what is provincial. In practice, the occasions on which federal and provincial laws clash are few and far between, and that is especially so with the current federal administration. Plus, to even open ... yada, yada.

So, lots of long, wordy, confusing questions about immigration and constitutionality, all stemming from Alberta's constant feelings of insecurity, grievance and victimization. (None of these questions are binding in any way, mind you, however the voting might go.)

As Mark Carney said, just yesterday, "No to the Nine!" (Or "decline the nine", if you prefer.)

OCC oversteps its authority in trying to force banks to take on controversial customers

A US banking regulator that glories in the splendidly anachronistic name the of the Office of the Comptroller of the Currency (OCC) has ruled that nine banks, including two Canadian banks, are guilty of practices and policies that denied or limited access to financial services because of political or religious beliefs. 

Canada's Toronto Dominion Bank and the Bank of Montreal were among the nine, which also included many of the heavy hitters in American banking like JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, US Bancorp and Capital One.

The review was demanded, predictably enough, by Donald Trump, and, predictably enough, he received the answer he wanted. No penalties were announced for the perceived transgressions, but the OCC say they are "assessing further regulatory and supervisory changes" to prevent these issues from happening again.

So, what kind of thing are we talking about here? Who is being discriminated against and denied access to their rights? 

Well, as you might imagine, they are almost all on the right fringes of the Republican Party. Examples include a non-profit espousing extreme anti-abortion views, a company producing MAGA merchandise, that kind of thing. In some cases, particular industry sectors are involved, like oil and gas exploration, coal mining and coal-powered plants, firearms and ammunition manufacturing, digital asset activities, etc, which contravene the banks' own ethical policies. It apparently amounts to a tiny number of individuals and companies ("a limited number of historical interactions") out of the many millions of accounts the banks maintain.

From the banks' point of view, though, in distancing themselves from some of the more controversial loan applicants, they are just trying to manage their legal, financial and reputational risk, which they are well within their rights to do.

The OCC's "irrefutable evidence" that the banks have "denied, debanked and discriminated against customers and lawful businesses", then, seems to tar the banks with a very broad brush, and ignores their own right to pick their customers and protect their own corporate brands. If anything, you could argue that the report merely reflects the political stance of the OCC (or maybe Mr. Trump).

The OCC contends that banks are using the concept of reputational risk as a shield to deny services to customers based on subjective, non-financial criteria. The banks, on the other hand, argue that managing reputational risk is a critical part of safe and sound operations. A potential client's public persona or controversial industry ties can lead to concrete legal, compliance and financial liabilities. Banks should not be forced to take on relationships with risky or controversial customers they do not trust.

Increase in Ontario electricity costs driven by nuclear power

Ontario's electricity rates are going up again after the latest agreement with ratepayer and industry groups. This time there is no hiding the fact that it is expensive nuclear power that is driving the increases.

For years, the Ontario government has maintained the convenient fiction that it has been renewable energy that has driven costs up. As renewables - whether hydro, wind or solar - are now among the cheapest electricity generation options, that is no longer going to fly.

Refurbishment of outdated nuclear plants and additional maintenance costs on others are the main drivers for this latest increase. Nuclear costs from 2027 to 2031 are projected to be almost double those from 2022 to 2026. A much smaller increase will result from refurbishment to some hydro dams. The report notes, however, that hydro costs are less than a quarter of nuclear costs per megawatt of power produced.

The nuclear lobby is still very powerful [sic] in Ontario, exemplified by all those full-page ads in major newspapers. But it is, and has always been, an expensive option. I doubt many people will be paying attention to news reports like this one, but if they were, they would have a better understanding of just how expensive.

Did America withold missile warnings from Ukraine?

As Russia's illegal war in Ukraine approaches the five year mark, it continues to hit hapless Ukraine with a nightly barrage of drone and missile attacks. It also continues to hit Ukrainian energy and infrastructure targets, despite President Trump's claims of the existence of an "energy ceasefire", which no-one else seems to know anything about.

Even more worrying, the latest strikes arrived before any early warning alarms were enabled, as it appears that no early warning was received by Ukraine from its "partners", which essentially means the USA in this context. Ukraine has various partnerships with European countries for weapons production and missile defence, but for ballistic missile warnings and defence it is apparently almost entirely dependent on the USA.

This is not a situation I was aware of - I naively assumed that Ukraine had its own early warning system - and it immediately raises a bunch of questions: Did Trump order warnings to be deliberately withheld (consistent with his recent diatribes against Ukraine and Zelenskyy, and his renewed support of the aggressor, Russia)? Why does Ukraine not have its own early warning system? Is this not something that the "coalition of the willing" could help fund? Why are British and European warnings not available to Ukraine? Surely they have the technical know-how?

This comes hard on the heels of unexplained restrictions on Ukraine's battlefield use of Elon Musk-owned and US-made Starlink communication terminals, which are essential to Ukraine's drone missions. (The practical effect of this is to slow down Ukraine's drones, making their strikes on Russian assets and their ability to intercept Russian strikes much less effective.) And, of course, hard on the heels of Trump's recent controversial phone call with Russian President Vladimir Putin. Coincidence?

Ukraine is also suffering from severe delays in receiving Europe-financed "vital supplies" from America, particularly its Patriot interceptor air defence systems (Ukraine's best bet for stopping Russian missiles). It's hard not to see a pattern here.

Trump insists that the US did not withhold any warnings, and the official Ukrainian response is that it was just a "failure", suggesting it was to weather conditions or some sort of miscommunication, rather than a deliberate decision not to share an alert. 

Am I guilty of conspiracy theories to suggest deliberate American actions? I know I'm not the only one, and I know that Trump is definitely capable of much worse.