Alberta Threatens To Pull Out of Equalization

[rbacon]

--------------------------------------------------------------------------------

Alberta threatens to drop out of equalization deal with other provinces

1 hour, 58 minutes ago

http://ca.news.yahoo.com/s/24052006/2/nati...-provinces.html

By Jim Macdonald

EDMONTON (CP) - Alberta is threatening to drop out of the federal government's revenue-sharing deal with other provinces if energy income is included in the equalization formula.

Premier Ralph Klein says he's seeking a legal opinion to see if Alberta has the right to pull out, and says he'll fight "tooth and nail" against attempts by Quebec or other provinces to tap into Alberta's energy windfall.

Edited May 25, 2006 by Greg

[Riverwind]

EDMONTON (CP) - Alberta is threatening to drop out of the federal government's revenue-sharing deal with other provinces if energy income is included in the equalization formula.

I have to agree with Ralph here even though I agree with the principal. The mechanism for calculating equalization is deeply flawed and too prone to political manipulation and PM PM demonstrated with his deals for Newfoundland and Nova Scotia. The formula should be simple and unchangable and designed to encourage poorer provinces to live within their means.

[rbacon]

Pull the plug Ralph.. Dump the Marxism of Trudeau..Let TROC pay for their own programs.

[Leafless]

Riverwind

You wrote:

"I have to agree with Ralph here even though I agree with the principal. The mechanism for calculating equalization is deeply flawed and too prone to political manipulation and PM PM demonstrated with his deals for Newfoundland and Nova Scotia. The formula should be simple and unchangable and designed to encourage poorer provinces to live within their means. "

This is true, besides what iniative does this provide for a province to do better if all provinces are basically guaranteed the same as a province that accomplishes more.

[rbacon]

Besides it has a weasel clause.....Alberta can get out of it, Yahoo....EQUALIZATION AND REGIONAL DISPARITIES

36. (1) Without altering the legislative authority of Parliament or of the provincial legislatures, or the rights of any of them with respect to the exercise of their legislative authority, Parliament and the legislatures, together with the government of Canada and the provincial governments, are committed to

(a) promoting equal opportunities for the well-being of Canadians;

( furthering the economic development to reduce disparity in opportunities; and

© providing essential public services of reasonable quality to all Canadians.

(2) Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.(19)

[geoffrey]

I'd like to see us pull right out of equalisation. Or at least have a system where a province receiving payments must be actively changing their economy for the better, no more Newfoundland without any real progress for 30 years mooching off the rest of us.

I'm pretty sure with EI you at least have to be looking for a job. In this equalisation game, you can tax business out of your province, offer ridiculously high levels of social spending, and get the rest of the provinces to pay for it.

It's truly a regressive system.

Resource revenues in particular belong directly to the province that has them. It's not revenue in the value added sense like selling a car or a service. It's conversion of our resources to cash equivalents. There is no more oil after we use it all, it's just a transfer between oil and cash.

We already pay more than our fair share, per capita 4 times as much as any other province, without oil revenues and not including EI!!

Any attempt to take more will surely increase support for economic and possibly political seperation from the East.

[politika]

Who does Ralphy think he is King of Canada? He can't do this its in the treaty or constitution.

He is apart of the federation and he should contribute to it and not complain because once the oil reserves run out they are goign to have to rely on the rest of Canada.

[August1991]

It is arguably in the interest of current residents of Alberta to make equalization payments to the governments of other provinces, and to include resource revenues in the calculation of these payments.

The argument turns critically on the mobility of people between Canadian provinces. In the absence of equalization, more people would move to Alberta merely to take advantage of lower taxes but would burden the Albertan government with social infrastructure costs. In essence, it is cheaper to pay people, through equalization, to stay away from Alberta.

Imagine a condo building with condo fees geared to income. If one building has many rich people, poor people might be attracted merely because the ratio service:condo fee is advantageous. If the condo building happens to have an oil well on its property, and this subsidizes the residents' condo fees, the problem becomes more acute.

If you win a lottery, you'd probably be wise to come to terms with your brother-in-law because if not, he's likely to be over at your house every day.

[geoffrey]

August,

You would generally be right most of the time with that statement. But in Calgary in particular, we have less than 2% unemployment, meaning a massive labour shortage. We still have some affordable apartments and stuff around, not much, but enough to sustain a few thousand more coming. And we need it!!

Inflation is going to become a major concern. A retail clerk with no experience can make over $10/hr right now easily.

We need everyone to move here.

[Riverwind]

In essence, it is cheaper to pay people, through equalization, to stay away from Alberta.

I think it will take a few years of growing pains before Albertans figure this out. For that reason, a policy that encourages as many people as possible to move to Alberta is probably the best right now.

[mcqueen625]

Who does Ralphy think he is King of Canada? He can't do this its in the treaty or constitution.

He is apart of the federation and he should contribute to it and not complain because once the oil reserves run out they are goign to have to rely on the rest of Canada.

Once the oil in Alberta runs out Canada will not be able to squander away tax dollars on useless programs that beefit only a small minority of people such as bilingualism. This initiative has become nothing but a make work program for Fransophones, while the vast majority of Canadians speak English as the working language of business both in Canada and around the world.

Let's also not forget the many other wasteful programs initiated by Liberals like sponsorship, the gun registry, etc., etc. Sure we all nedd funding for necessities of life, and I'm sure Alberta does not mind contributing to the pot so that all Canadian's can have those necessities, but every time we turn around the Liberals were dreaming up new programs on which to piss away our tax-dollars. Quebec continues to while and will continue to whine until our federal government grows some balls and tells them that they are not a country, but merely just another province within Canada, and they deserve nothing more than the rest of the provinces are entitled to. If they don't like it the option of leaving is always available, and please don't let the door hit you on the way out.

[fixer1]

The ugly facts are always there for all to see. That being the government wastes a lot of the money we already entrust in them to spend wisely. The Liberals are to blame for much of it, but that is not to say the rest are guilt free. Equalization payments were to make Canada a cohesive country where the wealth was supposed to help poorer provinces maintain a level of standard of living that was closer to the average. It was never meant to be a fund to make everything equall.

There always has been the chance for every province to make use of the resources they have and then to make a better living for the people of that province. Ontario has very much benefited by the manufacturing jobs, as well as the industrial and mining sectors as well. Its location of being very much near the heartland of the USA has also helped to make it a prosperous place to live. That is why Ontario has more then half the population of Canada.

Alberta, is now coming into its own and yes there is a large labour shortage there and many young families would be wise to think of this place when they are trying to raise a family. It has a solid infastructure and the employment outlook is probably one of the best Canada has to offer. Which it is not a Hitech power house, it will grow to be a fair demand for all careers accross the job spectrum. It seems to be progressive in its thinking and so far has done a better job looking out for the taxpayer, then most other provinces. The wayward youth leaving the Maritimes seeking fortunes would be better to go to Alberta then the usual southern Ont. We have free unhindered movement in Canada and for those who are serious about planning a secure future, Alberta is probably one of the safer bets there is out there.

Now yes, when you have the extra money, it is always hard to see why you should share any of it with those less fortunate. But just as our parents had to show us when we were young that sharing your things with your friends ws the right thing to do, the same still holds true for you today.

[Black Dog]

I would agree that the equalization formula should be fixed. I'm not well-versed on the ins and outs of the program as it stands, so I can't comment on its flaws. But I will say this: Albertans have always been great at talking self-sufficiency and "letting the eastern bastards freeze in the dark" when times are tough, but when things go pear shaped, Alberta has a proud legacy of queing up for handouts same as anyone else. So, sentiments like "Pull the plug Ralph.. Dump the Marxism of Trudeau..Let TROC pay for their own programs." aren't really productive.

[Leader Circle]

I would agree that the equalization formula should be fixed. I'm not well-versed on the ins and outs of the program as it stands, so I can't comment on its flaws. But I will say this: Albertans have always been great at talking self-sufficiency and "letting the eastern bastards freeze in the dark" when times are tough, but when things go pear shaped, Alberta has a proud legacy of queing up for handouts same as anyone else. So, sentiments like "Pull the plug Ralph.. Dump the Marxism of Trudeau..Let TROC pay for their own programs." aren't really productive.

Ralph is responding to a promise by the Conservatives in the election campaign to NOT include oil royalties in their equalization payments, he is merely trying to remind them of that. Sask, BC, NS & NFLD have already asked for the same, just didn't make as much news as Ralphy saying it.

link

Saskatchewan Premier Lorne Calvert made a similar threat earlier this month in the form a letter delivered after the Tories' inaugural federal budget.

Calvert reminded Prime Minister Stephen Harper of his campaign pledge during last winter's election to exclude non-renewable resource revenue from the formula for calculating equalization payments to the "have-not" provinces.

Calvert was disappointed the promise wasn't reaffirmed in the budget. And he warned Harper there'll be a price to pay for reneging.

This is Quebec & Ontario's ploy to try to get some love from Harper and would shore up support in those provinces and I am sure Quebec would say this was part of their fiscal imbalance. The problem Alberta has with all of this is, it is reminiscent of the airplane deal that was taken from Alberta and given to appease Quebec by Mulroney. Hopefully Harper won't forget where he came from!

[Riverwind]

The problem Alberta has with all of this is, it is reminiscent of the airplane deal that was taken from Alberta and given to appease Quebec by Mulroney. Hopefully Harper won't forget where he came from!

I love how some Albertans are so deperate to find reasons to be angry at Ottawa that they have to take on grudges for things that never happened to them. The 'airplane' contracts in the 80s were supposed to goto Manitoba - not Alberta.

[stamps]

I thought Alberta was already sharing it's wealth with the rest of this country, if this country can not get by with what it already syphons off from our province then that's their proplem, yes we have Oil, but it's OUR oil, and what we do with it and the money generated from it is no-ones business outside of Alberta.... I am proud that we can contribute to this country and help people from outside this province, but , the money for nothing, everybody owes me something, the government will look after me attitude that is Canada can kiss my butt, we own and control our resources, as enshrined in the constitution, and any type of encroachment by outside forces on these rights will only destroy this country, fool me once shame on you, fool me twice shame on me, we have already been through a national raid on our resources in the 80's (NEP), and I can guarantee that it will never happen again brothers and sisters.....

[Leader Circle]

The problem Alberta has with all of this is, it is reminiscent of the airplane deal that was taken from Alberta and given to appease Quebec by Mulroney. Hopefully Harper won't forget where he came from!

I love how some Albertans are so deperate to find reasons to be angry at Ottawa that they have to take on grudges for things that never happened to them. The 'airplane' contracts in the 80s were supposed to goto Manitoba - not Alberta.

I am sorry, my mistake.

linky

"Western frustration came to a head when Ottawa awarded the CF-18 repair contract to Montreal-based Bombardier, not to the Winnipeg-based firm preferred by the Defence Department for technical and cost-related reasons. The CF-18 affair cracked the Tory alliance between moderate Quebec nationalists and Prairie conservatives."

It just reminds you of this type of thing, the battle of East vs West!

[Michael Hardner]

what we do with it and the money generated from it is no-ones business outside of Alberta.

And the business of the businesses that actually own the oil, ie. Americans.

I find it strange how people seem to fall into territorial thinking on these matters, when the people really calling the shots are offshore, after all.

[stamps]

what we do with it and the money generated from it is no-ones business outside of Alberta.

And the business of the businesses that actually own the oil, ie. Americans.

I find it strange how people seem to fall into territorial thinking on these matters, when the people really calling the shots are offshore, after all.

We live in a free market enviroment, what ever oil company leases these rights to extract the raw material pays for that right..... whether the price paid for that right is high enough is up for debate, but to whom they pay it to is not....

[Michael Hardner]

We live in a free market enviroment, what ever oil company leases these rights to extract the raw material pays for that right..... whether the price paid for that right is high enough is up for debate, but to whom they pay it to is not....

I'm confused. Whose oil is it then ? I thought it was 'your' oil ?

[August1991]

I'm confused. Whose oil is it then ? I thought it was 'your' oil ?

Whoever, whether Canadian, Albertan, American, Icelandic or Martian, takes the oil or gas out of the ground must pay the Albertan government a royalty for that right.

[stamps]

It is our Oil to sell brother, sorry if that is'nt clear, eventually it's your oil when you pay the gas station attendant for that right....

[Riverwind]

It just reminds you of this type of thing, the battle of East vs West!

Not really, it is becoming more of an Alberta vs. the Rest of Country thing now.

[Michael Hardner]

Whoever, whether Canadian, Albertan, American, Icelandic or Martian, takes the oil or gas out of the ground must pay the Albertan government a royalty for that right.

As I thought. Then why are we constantly approaching these issues with this ridiculous jingoism ?

[stamps]

It just reminds you of this type of thing, the battle of East vs West!

Not really, it is becoming more of an Alberta vs. the Rest of Country thing now.

It's the rest of the country sticking their noses in our business that's the problem......