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Wednesday, February 07, 2007

Alberta Firewall Guy Clarifies Equalization Payments

There is a very good op-ed in the Globe and Mail today that clarifies many of facts and the questions around equalization payments from the government of Canada to the so-called have-not provinces. The piece is written by Ken Boessenkool, now GM of Hill and Knowlton Alberta and one of the famous Firewall Letter signatories in 2001.

The myth busting article reflects and aligns with the same reality outlined in an early post in this blog. No wonder I like it.

The Firewall letter was signed by other notables including now Prime Minister Harper, but then he headed the National Citizens’ Coalition. Failed PC Leadership candidate, now Alberta Cabinet Minister, Dr. Ted Morton also signed the letter. It was a letter addressed to Premier Klein recommending that Alberta withdraw from the Canada Pension Plan and set up its own cheaper scheme offering the same benefits. It recommended replacing the RCMP with a provincial police service. Both of these issues were part of the debates in the recent Alberta Progressive Conservative Party leadership campaign.

Other recommendations included Alberta collecting its own income tax and take complete control of Medicare even if that resulted in breaches of the Canada Health Act and withdraw of federal funds to the province for health care. These two recommendations have proven to be non-starters politically and economically in Alberta.

The motivation for the Firewall letter is captured in this sentence from the document: "It's imperative to take the initiative, to build firewalls around Alberta, to limit the extent to which an aggressive and hostile federal government can encroach upon legitimate provincial jurisdiction."

Another telling part of the letter dated January 2001 noted "As economic slowdown, and perhaps even recession, threatens North America, the government in Ottawa will be tempted to take advantage of Alberta's prosperity, to redistribute income from Alberta to residents of other provinces in order to keep itself in power."

Albertans overwhelming see themselves as Canadian even with a core group of about 10% separatist sentiment in the province. The mythology of a federal government plundering Alberta’s resources runs deep in certain sectors of Alberta society. It arises in the ghosts of another National Energy Program or the mistaken assumption that equalization payments are from Alberta resource revenues. The belief that equalization payments are made from federally expropriated Alberta resource dollars. There is no evidence for either of these myths but that rarely matters to some people in Alberta.

It really helps to have people like Mr. Boessenkool clarify the terms and scope of equalization as part of the national conversation, particularly around fed-prov relations and the role equalization plays as part of our Constitution.