FROM THE RIGHT
Carson Jerema: Jason Kenney puts Alberta on path he can't control with equalization win
A victory for the 'yes' side could do little more than raise expectations, creating a larger opening for separatist elements in the province
Author of the article: 
Certainly, if the vote were to go the other way, it would be worse for Kenney, but a victory for the “yes” side could do little more than raise expectations, creating a larger opening for separatist elements in the province.
Kenney won power with a coalition that included the nascent independence movement, despite the fact that he is a federalist. If Albertans strongly approve of making changes to equalization and Kenney is unable to deliver for them, will that further embolden the separatists within his base?
National Post
cjerema@postmedia.com
A victory for the 'yes' side could do little more than raise expectations, creating a larger opening for separatist elements in the province
Author of the article:
Carson Jerema
Publishing date
Publishing date
:Oct 19, 2021 •
Alberta Premier Jason Kenney is very likely pleased with the referendum result, with voters approving a proposal to remove equalization from the Constitution.
PHOTO BY IAN KUCERAK /Postmedia
Judging purely from the results of the equalization referendum, Jason Kenny made the right bet, but he has also put himself and Alberta onto a path he may regret. The referendum, which early results show Albertans voting to remove equalization from the constitution, was always a gesture meant to shore up support for his government as the province’s true defender against a hostile Ottawa.
But in the years since the premier took power his popularity has plummeted, largely due to his handling of the pandemic, which energized the more conservative factions in the province, and his party. Those factions will want to drastically change or dismantle equalization and won’t be satisfied with a symbolic victory.
Complaints against equalization are indeed well founded
While the purpose of equalization is to smooth out inequalities between provinces, fiscal capacity has been converging, especially since the oil price collapse of 2014.
Judging purely from the results of the equalization referendum, Jason Kenny made the right bet, but he has also put himself and Alberta onto a path he may regret. The referendum, which early results show Albertans voting to remove equalization from the constitution, was always a gesture meant to shore up support for his government as the province’s true defender against a hostile Ottawa.
But in the years since the premier took power his popularity has plummeted, largely due to his handling of the pandemic, which energized the more conservative factions in the province, and his party. Those factions will want to drastically change or dismantle equalization and won’t be satisfied with a symbolic victory.
Complaints against equalization are indeed well founded
While the purpose of equalization is to smooth out inequalities between provinces, fiscal capacity has been converging, especially since the oil price collapse of 2014.
RIGHT WING Political scientist Bill Bewick of Fairness Alberta estimates that the per capital fiscal gap between have and have-not provinces fell from about $5,000 in 2015, to $1,600 this year. Because the program has a predetermined pool of funding, equalization is currently paying out more than the formula would call for.
University of Calgary economist Trevor Tombe said in an interview on Monday that while he opposed the referendum, he agrees that the program needs to be reformed. “In 2018, following the drop in oil prices and provinces getting more equal, the formula actually wanted to pay out fewer dollars than that preset amount,” he said.
Another objection is that equalization favours provinces with publicly owned power companies, because it calculates revenue based on the price the government sets for electricity. This is a particular boon for Quebec. “There is a strong incentive to keep power prices low,” Tombe says. If Quebec “were to have just two cents per kilowatt hour higher electricity prices, they would still have low electricity prices, relative to North America, but their equalization payment would have been $10.7 billion, instead (of $13.1 billion).”
So, yes, grievances against equalization are justified, and with respect to the referendum, equalization really has no business being in the Constitution. No federal spending program, especially one so easily manipulated for political aims, should be enshrined alongside rules that dictate the powers and limits of government. The wording of the equalization clause itself suggests it doesn’t belong, as it commits Ottawa to merely the “principle” of making equalization payments to poorer provinces.
Much has been said about the Supreme Court’s 1998 secession ruling and a duty “to come to the negotiating table” which was a specific reference to the threat of separation, not a general point on more trivial constitutional changes. However, elsewhere in the ruling, the court did affirm “the duty on the participants in Confederation to engage in constitutional discussions in order to acknowledge and address democratic expressions of a desire for change in other provinces.”
We could quibble over the legal distinctions between “negotiating” versus holding “discussions,” but if you wanted to remove the equalization clause from the Constitution, holding a referendum, followed up by a resolution in the legislature (as is planned), is indeed how Alberta would initiate the amendment process.
University of Calgary economist Trevor Tombe said in an interview on Monday that while he opposed the referendum, he agrees that the program needs to be reformed. “In 2018, following the drop in oil prices and provinces getting more equal, the formula actually wanted to pay out fewer dollars than that preset amount,” he said.
Another objection is that equalization favours provinces with publicly owned power companies, because it calculates revenue based on the price the government sets for electricity. This is a particular boon for Quebec. “There is a strong incentive to keep power prices low,” Tombe says. If Quebec “were to have just two cents per kilowatt hour higher electricity prices, they would still have low electricity prices, relative to North America, but their equalization payment would have been $10.7 billion, instead (of $13.1 billion).”
So, yes, grievances against equalization are justified, and with respect to the referendum, equalization really has no business being in the Constitution. No federal spending program, especially one so easily manipulated for political aims, should be enshrined alongside rules that dictate the powers and limits of government. The wording of the equalization clause itself suggests it doesn’t belong, as it commits Ottawa to merely the “principle” of making equalization payments to poorer provinces.
Much has been said about the Supreme Court’s 1998 secession ruling and a duty “to come to the negotiating table” which was a specific reference to the threat of separation, not a general point on more trivial constitutional changes. However, elsewhere in the ruling, the court did affirm “the duty on the participants in Confederation to engage in constitutional discussions in order to acknowledge and address democratic expressions of a desire for change in other provinces.”
We could quibble over the legal distinctions between “negotiating” versus holding “discussions,” but if you wanted to remove the equalization clause from the Constitution, holding a referendum, followed up by a resolution in the legislature (as is planned), is indeed how Alberta would initiate the amendment process.
It just isn’t obvious what Kenney and his United Conservative Party government hopes to accomplish. “Our expectation is not that there will be a constitutional amendment or the end of equalization, but we’re using this to get leverage,” Kenney said in a Facebook Live event last week, where he fully acknowledged that he doesn’t expect to get the necessary support from other provinces to amend the Constitution. The whole purpose, then, appears to be to kick up dust.
Certainly, if the vote were to go the other way, it would be worse for Kenney, but a victory for the “yes” side could do little more than raise expectations, creating a larger opening for separatist elements in the province.
The so-called Free Alberta Strategy , which was announced with a splash earlier this month, goes well beyond the usual plans to assert autonomy, such as a provincial police force and pension plan. Supported by some current and former MLAs, it advocates for the provincial government to claim authority to “refuse enforcement” of federal laws and court rulings, and pushes for independence if Ottawa doesn’t end its “economic tyranny.”
Kenney won power with a coalition that included the nascent independence movement, despite the fact that he is a federalist. If Albertans strongly approve of making changes to equalization and Kenney is unable to deliver for them, will that further embolden the separatists within his base?
National Post
cjerema@postmedia.com
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