Alberta: We're Coming To Get Your Money

[mirror]

Unless Alberta quickly decides to share their oil and gas revenues, the rest of Canada is going to force them to do so. This is going to lead to a lot of tension but we have weathered problems before, we will weather this one, and we will weather them in the future.

Klein must share: expert

Country will be in danger if Alberta keeps riches: Courchene

 

Lee Greenberg

CanWest News Service

TORONTO - One of Canada's leading experts on equalization and interprovincial relations says Alberta will have to relinquish some of its windfall billions in oil revenue or risk the destruction of the federation.

Discussing a paper to be released next week, Thomas Courchene, senior scholar at Montreal's Institute for Research on Public Policy and a professor at Queen's University, said yesterday a portion of Alberta's projected $7-billion surplus should be shared with the other provinces.

Alberta's wealth, generated by crude oil and natural gas deposits, which are now fetching historic prices, has left the province with a series of enticing possibilities, including eliminating income tax, corporate tax, or even providing free post-secondary education.

The province is already debt-free and has the lowest income tax rates in the country.

However, Mr. Courchene said continued financial growth would prompt Canadians to flock to Alberta, weakening all the other provinces in the process.

"If Alberta spends all of it internally it either means zero taxes in Alberta or Cadillac versions of all public services, or variations of both.

"Who's about to live in Saskatchewan in those scenarios? You could just go to Alberta and be unemployed and probably get welfare that's a bit more than you could earn in Saskatchewan," Mr. Courchene said in a telephone interview yesterday.

"The real difficulty that Canada faces is that if Alberta starts spending this on infrastructure. It can have a health system, an education system, an environmental -- anything it wants -- that no other province can afford. If that happens, the Confederation is gone."

Mr. Courchene, a Sask- atchewan-raised Princeton graduate, is a former director of Queen's University's School of Policy Studies and is the author of some 250 books on Canadian policy issues. He said he had mixed feelings about initiating a discussion that could stir up divisive sentiment.

"This is the beginning of a 'let those eastern bastards freeze in hell' type of scenario," he said. "I guess someone has to say it."

[Riverwind]

"The real difficulty that Canada faces is that if Alberta starts spending this on infrastructure. It can have a health system, an education system, an environmental -- anything it wants -- that no other province can afford. If that happens, the Confederation is gone."

I say let the free market sort it out - if Albertans have better services more people will move to Alberta which in turn will increase the load on Alberta's public infrastructure. Get another 2 million people (including a 1/2 million non English speaking immigrants and refugees) to move into Alberta in the next decade and the current Albertans will certainly figure out that sharing some of the oil wealth might not have been such as bad idea.

[Argus]

Unless Alberta quickly decides to share their oil and gas revenues, the rest of Canada is going to force them to do so. This is going to lead to a lot of tension but we have weathered problems before, we will weather this one, and we will weather them in the future. 

Drivel.

Didn't we just sign an agreement with the Newfies that they should get all the money from their offshore oil while still getting transfer payments? How are you going to demand more from Alberta while ignoring Newfoundland's oil? Furthermore, to suggest Albert has to give up "a portion" of its oil wealth ignores the fact they are already doing so through transfer payments.

As for the fear that people will flock to Alberta because life is better there due to their wealth, well, I don't recall any academics bleating about how many people from other parts of the country flock to the opportunities in central Canada.

[crazymf]

Knock knock Ottawa. Wakey wakey!!!

If this gets perceived as a shakedown or money grab, I can see the separatists gaining ground in the hearts and minds of westerners.

If Alberta can offer more to the 4 western provinces than Ottawa can, what's holding us back? Quebec can eat Ontario for breakfast for all we would care.

However, I don't know the source of the article. I'm sure there's much more to it than what he says.

[Canuck E Stan]

In the near future, listen for the words "Carbon Tax" along with "Kyoto" coming out of the Liberals in Ottawa as they point their fingers west towards Alberta.

[kimmy]

One thing I have always found puzzling is why people are only concerned about relocation when it involves people moving from east to west. Between 1996 and 2000, everybody with a technology-related degree or diploma was moving to Ottawa to work for Nortel and all the other high-tech companies that sprang up in the area during that time. Not a peep did I hear about how bad it was that the best and brightest from Alberta, BC, and Saskatchewan were leaving in droves with their provincially-subsidized university degrees and tech-school diplomas. But in 2002 we had Chretien complaining that people relocating to Alberta was de very bad ting. And Dr Courchene complaining that people relocating to Alberta weakens other provinces. I guess one difference is that during the tech-boom, Ontario was just skimming the creme... taking just the most valuable and skilled workers from other provinces... while Alberta has jobs for skilled people, tradespeople, and just about anyone who isn't functionally incapable of work. And politicians are concerned because, I dunno, because that's a lot more votes moving around the country or something?

Also, why is it that Saskatchewan gets no mention in this type of discussion? If Alberta is the elephant in the room, Saskatchewan is the funny monkey hitching a ride on the elephant's shoulder. They have booming resources too. They have a budget surplus now, I hear. I am also reminded of the conventional wisdom of city department managers: you better spend all your budget, because if you have a surplus, you'll pay for it. If having a budget surplus gets you frisked by the feds, the provinces will simply try harder to find ways to make sure they spend all their money.

"Who's about to live in Saskatchewan in those scenarios? You could just go to Alberta and be unemployed and probably get welfare that's a bit more than you could earn in Saskatchewan," Mr. Courchene said in a telephone interview yesterday.

Of all the things the Alberta government is noted for... generousity toward welfare recipients is not one of them. I anticipate Dr Courchene will be getting an earful from poverty advocates in this province. People are not seriously laboring under the belief that the Alberta government will be giving welfare recipients more money than employed people in other provinces are earning, are they? This is beyond absurd.

"The real difficulty that Canada faces is that if Alberta starts spending this on infrastructure. It can have a health system, an education system, an environmental -- anything it wants -- that no other province can afford. If that happens, the Confederation is gone."

Well, it does need to be spent on infrastructure. Edmonton and (I believe) Calgary are going back into debt in order to fund infrastructure projects that have been necessitated by explosive growth. And that's minor compared to what's facing the north-- particularly Fort McMisery, a city that is being utterly overwhelmed by the rate at which it is growing. Fort McMurray needs highway twinning, massive upgrades to its roads, and probably a high-speed rail-link to Edmonton.

One of the suggestions Mr. Courchene will propose is an energy revenue sharing scheme whereby provinces kick in 10% of those resources to be distributed by the provinces themselves through the Council of the Federation.

A community fund, kind of like the new revenue sharing agreement between the NHL teams. Depending which "those resources" are, this could be an ok idea... but I've got a funny feeling that various provinces are going to have differing ideas on which revenues should be included in the sharing pool. A few decades down the road, Quebec's environmentally friendly James Bay electricity will be more precious than gold, and we're going to be wishing we'd insisted that be part of the revenue sharing pool...

-k

[Rambler Man]

So what if people move to Alberta? We're faced with rampant employment here and we could use some help.

I don't see how more people moving to Alberta weakens confederation. All these people will have family in the provinces they left and as a result Alberta will have greater ties to the rest of the country. Seperatism will become less likely won't it?

There are such huge labour shortages in Fort McMurray that there is talk of bringing in foreign workers. Maybe we should instead create a program to encourage workers from the far eastern provinces with their 15% unemployment rates to come to Alberta. Isn't that more efficient then Albertans sending all their money east to maintain the status quo? Won't that help the poorer provinces free up money that they are currently spending on welfare?

I just don't see how impeding the progress of provinces in the interest of equality benefits Canada as a whole. If Alberta is left unmolested, other provinces will be forced to become more competitive to attract immigrants, and that leads to progress for all.

[I Miss Trudeau]

Alberta: We're Coming To Get Your Money, This may get ugly, but so be it!

What the hell do I care if the ROC takes the money from Klein and his cronies? I don't see much of it anyway.

[Riverwind]

So what if people move to Alberta? We're faced with rampant employment here and we could use some help.

I don't see how more people moving to Alberta weakens confederation. All these people will have family in the provinces they left and as a result Alberta will have greater ties to the rest of the country. Seperatism will become less likely won't it?

Exactly my point. If anything the oil money could be used to train the type of workers that Alberta needs. Giving someone a job is the best form of social welfare.

[Hawk]

So what if people move to Alberta? We're faced with rampant employment here and we could use some help.

I don't see how more people moving to Alberta weakens confederation. All these people will have family in the provinces they left and as a result Alberta will have greater ties to the rest of the country. Seperatism will become less likely won't it?

Exactly my point. If anything the oil money could be used to train the type of workers that Alberta needs. Giving someone a job is the best form of social welfare.

<{POST_SNAPBACK}>

No, helping them get a job is. Giving them a job is no better than sweatshops in the former Soviet Russia.

[I Miss Trudeau]

Giving them a job is no better than sweatshops in the former Soviet Russia.

<{POST_SNAPBACK}>

Wow, thats quite the claim. Care to elaborate?

[mirror]

If you are looking for sweat shop jobs, I hear Fox News has a few openings!

[Hawk]

If you are looking for sweat shop jobs, I hear Fox News has a few openings! 

<{POST_SNAPBACK}>

Nah, I am Canadian thus the CBC would be the sweatshop for me right?

And yes, giving jobs is different then finding jobs. If you can't see the difference check yourself back into K-12 school, they should be able to help ya out with that one

[Riverwind]

No, helping them get a job is. Giving them a job is no better than sweatshops in the former Soviet Russia.

I meant to say helping them to get a job with training and/or relocation assistance as required.

[I Miss Trudeau]

No, helping them get a job is. Giving them a job is no better than sweatshops in the former Soviet Russia.

I meant to say helping them to get a job with training and/or relocation assistance as required.

<{POST_SNAPBACK}>

In practice, most jobs are "given" through personal contacts anyway.

[FTA Lawyer]

Unless Alberta quickly decides to share their oil and gas revenues, the rest of Canada is going to force them to do so. This is going to lead to a lot of tension but we have weathered problems before, we will weather this one, and we will weather them in the future. 

<{POST_SNAPBACK}>

It's all fine and good for the feds to try to force Alberta to share the profits of their resources...but the one thing they can't do is force Alberta to actually drill, extract and market those resources.

Like it or not, the oil belongs to Alberta, and if Ralph wants to leave it in the ground there is not a damn thing the rest of the country can say about it.

Of course, this would mean Alberta would take a big hit in the bank account...but then no worse than having Ottawa with it's siphons open wide. The cost of oil and gas would skyrocket even further than it has already, and the Canadian economy would be crippled.

Seems like a disastrous scenario, but I ask you, does anyone think for a minute that Ralph wouldn't do just that to prevent being raped of his resource revenue? He's already said publicly that he would!

Seems to me that Canada should be happy with the billions in transfer payments and hundreds of millions in taxes that Alberta residents pay every year...its not such a raw deal.

FTA Lawyer

[Guest eureka]

Actually, I would think that there i something the feds could do. They have an overriding responsibility for the National welfare and they could evoke that.

If oil continues the way it is going, then we may see a new National Energy Policy If Alberta resists, then I will personally raise an army - just like Ontario and Riel - and descend on Edmonton.

[kimmy]

If Alberta resists, then I will personally raise an army - just like Ontario and Riel - and descend on Edmonton.

I will keep an eye on the eastern horizon, watching for the approach of Eureka's 1st Mechanized Infantry Division-- I picture an army of golf-cars, motorized wheelchairs, and the occasional low-mileage 1989 Crown Victoria with "World's Best Grandparents!" bumper-stickers. It should be an awe-inspiring sight.

-k

[Black Dog]

Like it or not, the oil belongs to Alberta, and if Ralph wants to leave it in the ground there is not a damn thing the rest of the country can say about it.

And why would Ralph cut off his nose to spite his face? The province owes its success to the oil and gas sector: stopping production of these resources would be economic suicide.

[FTA Lawyer]

Like it or not, the oil belongs to Alberta, and if Ralph wants to leave it in the ground there is not a damn thing the rest of the country can say about it.

And why would Ralph cut off his nose to spite his face? The province owes its success to the oil and gas sector: stopping production of these resources would be economic suicide.

<{POST_SNAPBACK}>

Why would Ralph get drunk and throw money at a homeless person and tell them to get a job like everyone else? Why would he say that people on AISH (assisted income for the severly handicapped) didn't look handicapped to him so they should quit complaining that their $850 / month payment was too little? Why would he openly push the Canada Health Act to the point of massive fines / penalties by the feds?

The bottom line is he doesn't want to do it, but go ahead and play chicken with him and see if he blinks...

What you don't seem to appreciate is that economic suicide for Alberta is really murder-suicide because Canada goes down with us...that's why Ralph has the hammer on this issue...coming after Alberta's resources is economic (and therefore political) suicide for Paul Martin and he knows it.

On his trip out here for Alberta's Centennial, Martin has been asked repeatedly about whether another NEP scenario is on the horizon and he has outwardly stated he will never do such a thing because "Alberta's successful economy is a great asset to Canada" He even went so far as to outright say that "the NEP was a mistake", and one which he would "never repeat." (loose quotations...you can look at today's Calgary Sun for the actual wording).

Eureka's suggestion of the "national welfare" concept is an interesting argument. In case law the concept is referred to as the "National Concern" doctrine. However, I suggest that the feds cannot use this power unless there becomes a "national emergency" or crisis. The following comment from a decision of the Supreme Court called R. v. Crown Zellerbach is helpful:

"the national concern doctrine, in the absence of national emergency, could not give Parliament jurisdiction with respect to matters which would otherwise fall within provincial legislative jurisdiction"

Section 92A of the Constitution Act 1867 reads:

NON-RENEWABLE NATURAL RESOURCES,

FORESTRY RESOURCES AND ELECTRICAL ENERGY

Laws respecting non-renewable natural resources, forestry resources and electrical energy

92A. (1) In each province, the legislature may exclusively make laws in relation to

(a) exploration for non-renewable natural resources in the province;

( development, conservation and management of non-renewable natural resources and forestry resources in the province, including laws in relation to the rate of primary production therefrom; and

© development, conservation and management of sites and facilities in the province for the generation and production of electrical energy.

Clearly the feds cannot put their nose into the situation (to justify actually going in themselves and extracting provincial resources) unless they can establish a "national emergency".

Could that happen? I suppose so. We are a pretty cold climate in winter and if people's lives were actually in danger because they couldn't afford to buy natural gas or heating oil, then the feds could probably come in and take it from Alberta (on a temporary emergency basis).

That being said, when the feds have exorbitant fuel taxes and successive billion dollar surpluses, it will hardly fly to call expensive gas & oil a "national emergency" to justify pillaging a province.

So I modify my earlier statement...the feds can't do a damn thing to force Alberta to pull the oil out of the ground UNLESS people are freezing to death because they can't buy natural gas or heating oil, AND the feds have already suspended their fuel taxes AND they have rebated a significant portion of their current multiple-billion dollar surplus.

FTA Lawyer

[Guest eureka]

The point of "freezing to death" may have already been reached for some. Heating this winter is going to be unaffordable for them.

To suspend fuel taxes would require the imposition of new taxes to replace them or an increase in income tax or GST. That would be no answer.

To suspend fuel taxes without that would be to eliminate the surplus: a surplus that may well be needed now to cope with the fallout, the consequences, from the energy crises that are just now becoming apparent to those who have been blind to their looming shadows.

Otherwise I agree with you.

[Cartman]

If oil continues the way it is going, then we may see a new National Energy Policy If Alberta resists, then I will personally raise an army - just like Ontario and Riel - and descend on Edmonton.

Victory will be glorious general.

[Toro]

BTW, I think the title of this thread is hilarious...

[mirror]

At least some people appreciate a sense of humour!

[kimmy]

The Toronto Star recently published a column by Murdoch Davis, editor of The Beaver, which is apparently "Canada's history magazine," to provide some historical context to western resentment:

Star column: West's resentment rooted in history.

For the country's first 38 years, most of what is the "prairie provinces" was run as essentially a colony of Canada, with less representation and rights than Ontario had as a British colony before Confederation.

Territorial leaders fought for 35 years for provincial status. Among leaders in central Canada, and the elite citizenry, the prevailing view of the Territories and their inhabitants was condescension. That didn't change much with provincehood.

Canada promoted immigration to the west from places such as Russia, Ukraine and Poland, but the settlers were seen as second-rate — uneducated, speaking little English, dirty and dirt poor.

The west was to be a market for eastern goods and a source of products to be processed in the east and exported, not a home for uppity folks who didn't see things that way.

Ottawa denied the new provinces the provincial right to control natural resources, a right the founding provinces had had since 1867. The provinces were not equal; it's easy to understand why the west complained of not being treated equally.

For 25 years, their leaders trundled by train to Ottawa to plead and cajole.

No one knew the extent of the west's carbon deposits then, so the fight wasn't over oil money, just equality. Westerners simply wanted what folks down east took for granted.

In 1930, Parliament finally relented. A grudge built up over that long a time can run deep.

It wasn't until the post-war boom and the Leduc oil discovery of 1949 that Alberta's economy began to diversify well beyond cattle and crops, and its treasury fattened.

Until then, the province could barely dream of the kind of publicly funded facilities — what is today "infrastructure," from extensive paved highways to concert halls and more — that the east took for granted.

In this light, it's easier to understand the hostility that greeted Pierre Trudeau's National Energy Program in 1980. Only three decades in to being able to exploit resources as the east had done for 150 years, Ottawa was wresting it away again.

Yes, some Alberta leaders overplay their regional hand at times, for political expediency. That's not unique to the west.

But today one reads and hears Ontario-based opinion leaders saying that Alberta's wealth is an accident of geography or geology, so somehow undeserved.

They seem never to consider that for more than a century Ontario built its prosperity on comparable good fortune: cheap hydroelectricity, proximity to populous markets in the United States, the Great Lakes, the St. Lawrence River, bountiful forests, extensive mineral resources and more.

Western separatism is overplayed in national media, but the latent resentment is not. Another bout of inequality in provincial rights would help turn the latter into the former.

-k