END EQUALIZATION NOW! A PLAN OF ACTION
In 2021, 61.68% of Albertans voted to end Equalization. In typical Jason Kenney fashion, anything that would get in the way of his federal World Economic Forum supported ambitions was simply ignored.
The constitutional reference to “equalization” is found at s. 36 of the Constitution Act, 1982. It is important to note that this provision exhibits the weakest and most “aspirational” piece of constitutional drafting in the entire Canadian Constitution.
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;
(b) furthering economic development to reduce disparity in opportunities; and
(c) 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.
It is also important to note that S.36 expressly states that it DOES NOT alter “the legislative authority of Parliament or the provincial legislatures”. As such equalization can only operate with the consent of the provincial legislature which Kim Jong Trudeau completely ignored when he UNILATERALLY extended the previous equalization agreement in April of 2019 for a further 5 years without the approval or consent of the Alberta Legislature.
Also a vague commitment to the “principle” of “reasonably comparable levels of public service” of “reasonable quality” at “reasonably comparable levels of taxation” does not mean that Quebec should be able to run surplus budgets and retire its provincial debt at Alberta’s expense nor does it mean that have not provinces are entitled to EQUAL levels or quality of public service or EQUAL levels of taxation. It’s time to tell the Trudeau voting provinces seeking handouts from Alberta that their free ride is over and that severe belt tightening is required.
The other thing that people need to know about equalization is that the so called “have not” provinces all cheat to make themselves poorer to siphon more and more money out of Alberta into their provincial coffers. No provinces cheat Alberta more than Quebec, Ontario, British Columbia and Newfoundland and Labrador.
Newfoundland has expressly exempted its Oil and Gas revenues from the “fiscal capacity” calculation that lie at the heart of equalization. This was accomplished through the whining and sniveling of politicians delivering votes to the party in power of the day and not on any principled basis that should not “EQUALLY” apply to Alberta.
The other big cheat that Quebec, Ontario, BC, Newfoundland and Labrador use to exempt revenue from equalization is that they all have cooked their books with regard to Hydro revenue.
These provinces all exempt their hydro revenue from equalization by charging a nominal “royalty” on the water that flows through a hydro dam claiming that the water is the “natural resource” being taxed and that all of the revenue generated by the hydro corporations is exempt as the “revenue of crown corporations” which are exempt from equalization under the various “fiscal capacity” calculations.
My plan for Alberta to drastically reduce equalization and increase provincial revenue and economic growth is fourfold.
1. Create a Crown Corporation called the Alberta Natural Resources Management Corporation in conjunction with a reduction of oil and gas royalties to 1 cent a barrel on oil and 1 cent an MCF for gas. Any revenue shortfall would be made up by creating a legislative requirement for oil and gas producers to pay the Alberta Natural Resources Management Corporation a “management fee” for “Natural Resource Accounting Services” equal to or greater than the existing royalty.
2. Immediately sue Kim Jong Trudeau and the Government of Canada for unconstitutionally withholding revenues from the province of Alberta since 2019 absent the authorization and consent of the Alberta Legislature. This trial should be held as a JURY trial given that salaries of federal judges are paid by Ottawa.
3. Immediately sue Chairman Trudeau and the government of Canada for negligence or fraud by assessing carbon taxes on the basis of the scientifically unprovable notion that any carbon taxes levied on Alberta fuel or natural gas consumption has no causal link to any form of global climate change on the basis of ever-increasing carbon outputs from India and China. This issue was NOT determined by the Supreme Court of Canada in the Carbon Tax Reference case and is suitable for a JURY trial in the province of Alberta.
4. Immediately increase the capacity of the Alberta Revenue department to collect all taxes in Alberta including so called carbon tax and withhold these revenues from Ottawa until the above litigation matters are resolved.
The other thing that Alberta needs to do is immediately demand that Trudeau immediately settle all outstanding First Nations claims in Alberta. The recent 10 billion dollar First Nations Annuities settlement in Ontario is a case in point. Money is being taken from Alberta to settle massive claims in Ontario, Quebec, BC and the Maritimes with a comparatively small amount being spent in Alberta. These claim settlements drive economic growth. Dollars spent in First Nations communities are largely if not entirely spent in the provinces where the first nations are located. New housing, roads, services, consumer goods are all purchased in the provinces where these settlements accrue and create huge economic spin offs for the provinces in which they land including massively increased off reserve provincial tax revenue.
Failing action by Trudeau, Alberta should consider using a portion of the savings generated by the Alberta Natural Resources Management Corporation to settle First Nations Claims in Alberta and to enter into a meaningful resource revenue sharing agreement with Alberta First Nations citing jurisdiction under S.2 of the NRTA 1930.
Alberta could then simply send Trudeau the bill in the same way that Trudeau sent Alberta Municipalities the bill for unilaterally agreeing to 5 years of RCMP back pay.
It’s time for Albertans to wake up and stand up to the drama teacher that our colonial masters in Ontario and Quebec have anointed as Alberta Overlord.
The sooner we have a referendum and vote Alberta out of this foolishness the better.
Jeffery R.W. Rath B.A. (Hons.), LL.B (Hons.),
Foothills, Alberta
20 June, 2023
Jeffrey R.W. Rath is a constitutional lawyer who has spent his career successfully suing the Government of Canada at every level of court in Canada.