Sunday, May 11, 2025

Alberta is rich, so why are they still whining?

I have never understood Alberta's vociferous and ongoing complaint that they are being unfairly targeted by Canada's equalization system.

Equalization was brought in to provide "reasonably comparable level of public services at reasonably comparable levels of taxation", i.e. to ensure that all Canadians benefit from all of Canada's advantages, and that those provinces that are richer (through accidents of geography, geology, etc) subsidize those that are poorer. It's not a perfect system, but it's surely a laudable goal.

Intra-provincial equalization payments are calculated according to a formula and, while you might quibble about some of the details, it is broadly designed to make sure that there are no egregiously "have-not" provinces, through no fault of their own. Even Alberta received equalization payments back in the 1950s and 1960s, when it qualified as a "have-not" province, but it has been a "have" province since 1964 due to its oil revenues.

But the big thing is, equalization is a federal program. The government of Alberta has not paid over a single cent to any other province, despite what Danielle Smith implies; all equalization payments come from federal coffers through federal taxes. If Albertans (as opposed to Alberta) can be said to have paid more than residents of other provinces, that is only insofar as Albertans have higher incomes than the national average. This doesn't make it unfair, except in the eyes of Danielle Smith and the Alberta First crowd.

Because the bottom lime is: Alberta is a rich province, both in absolute GDP and particularly in per capita terms. The province's own economic dashboard admits - nay, boasts - as much. They should expect to be paying more than Nova Scotia or Manitoba. They are not struggling, they are not unfairly treated. They are living in La La Land compared to most Canadians. And the rest of Canada is pretty sick of their constant whining.

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