In a province that routinely holds Senate elections and has plebiscites on whether there should be fluoride in the drinking water, finding the dumbest thing on the ballot in an Alberta municipal election can be a challenge. But that’s much easier this year, given the Kenney government has decided to ask Albertans whether they want to scrap the federal equalization program and “send a message” to Ottawa.

After all, there is no universe in which Alberta can actually do what the ballot question suggests. As the University of Calgary’s Trevor Tombe wrote in a recent op-ed, “A referendum vote provides no power to Alberta, legal or otherwise, that we don’t already have.”

Fairness Alberta executive director Bill Bewick, a self-described “scientist of politics” whose organization is one of the biggest proponents of the equalization referendum, admitted as much in a recent Edmonton Sun op-ed. “It’s true the wording for the referendum question asks if you support removing the principle of equalization from the Constitution. Can Alberta unilaterally amend the Constitution? Obviously not. Does anyone expect seven provinces to agree to delete this? Obviously not.”

So why, exactly, are Albertans being asked to vote on something that can’t possibly happen? Because it gives a wildly unpopular premier one last chance to play his favourite strategic card — and risk losing more of Alberta’s chips at the political poker table. In a recent Facebook Live appearance, Jason Kenney admitted the referendum “will not end equalization,” and that it was about “gaining leverage like Quebec did.”

But as Warren Buffett wrote in his 1987 letter to shareholders, “If you’ve been playing poker for half an hour and you still don’t know who the patsy is, you’re the patsy.” Quebec’s leverage was a result of two things that don’t exist in Alberta: a real independence movement that had significant public support and a track record of voting strategically in federal elections.

If Kenney shows up to the next Council of the Federation demanding changes to the Constitution, he’s going to get laughed out of the room by the other premiers — if he even survives that long as premier.

That’s where the real problems start. A winning vote for the “yes” side on Monday is a near certainty, given how long certain Conservatives have been brainwashing Albertans about the alleged injustice of equalization payments. As a recent Viewpoint Alberta poll showed, the reality of how equalization actually works — and what it means to, and for, Alberta — is a mystery to most people here. Less than half of their 602 respondents got more than half of their eight questions right, and nobody — that’s right, nobody — answered all eight correctly.

But what happens once Albertans vote in favour of ending equalization and it doesn’t happen? As University of Calgary political scientist Paul Fairie tweeted, “The equalization referendum in Alberta feels like it has the same two potential outcomes as the Brexit vote: either continued anger for many that the vote was no, or continued anger for most that what results from a yes vote is not what was promised.”

Constitutional scholar Eric Adams was even more pointed in his own analysis of the referendum, writing that “those who try and ride a tiger often end up in its belly. Stoking constitutional resentment and misunderstanding for the imagined partisan advantage of an unpopular government does no one any good.”

At some point, Conservatives will need to stop lying to Albertans about their role and place in the federation. Equalization is not some nefarious plot to transfer wealth from Albertans to Quebecers, and eliminating it — if that were even possible — wouldn’t change how much tax Albertans pay or what they receive in programs. And if Conservatives like Ted Morton are so concerned about the fact that Alberta continues to run deficits, they should be advocating for the same mix of taxes (one that includes a sales tax) that people pay in Saskatchewan and Manitoba.

Opinion: If #JasonKenney shows up to the next Council of the Federation demanding changes to the Constitution, he’s going to get laughed out of the room by the other premiers, writes columnist @maxfawcett. #Alberta #ABpoli

This long-standing campaign to demonize equalization and paint Quebec as a province of freeloaders has very little to do with actually improving public policy. Instead, it’s about enhancing the political influence of the people behind it and distracting Albertans from the more pressing realities at hand, like the province’s massively incompetent handling of COVID’s fourth wave. Never mind that they’re actually stoking the fires of alienation and anger they pretend to want to extinguish.

As we saw with Brexit, and continue to see with the spread of Trumpism in the United States, the ends of power will always justify the means of populist fear-mongering. The question that will remain after Monday’s referendum is how much it will cost the rest of us.

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The fact that not a single person got all eight questions answered correctly indicates exactly what the problem is with "Equalization". It is so inexplicably confusing that the only conclusion that anyone can make is that it must be corrupted or have hidden aspects that exist to fool people. We concerned citizens have never discovered an explanation as to why Quebec (for example) has so many exceptions and declares multi-billion dollar surplus "revenues" at year end.

I think I read that the funds are collected via federal income tax and then redistributed. And I think that means that the more high-wage earners there are in a province, the more money gets collected from that province.

That's the collection side.

Not sure how the distribution side works, but even if the same amount goes to everybody on a per-capita basis, provinces with more lower wage earners will receive more than they contribute. I think that's why they call those provinces 'have-not'. It's about the impoverishment of the province's wage earners in relation to the rest of Canadians.

Please correct me if I'm misunderstanding this.

Yes, the equalization (EQ) formula is complex. Politicians and pundits (sometimes deliberately) compound the confusion.
The same federal tax rates[1] and EQ formula apply to all Canadian taxpayers and all provinces alike. Not sure what "exceptions" Rick Botting refers to.
Under our federal tax system, Albertans are treated no differently than other Canadians. On $100,000 of employment income, Nova Scotians pay the same tax as Albertans.

The equalization formula involves two basic calculations:
1) a province's fiscal capacity (which determines whether it qualifies for equalization);
2) for a receiving province, its actual entitlement (dollar amount).
*
Dept of Finance: "Equalization Program"
"How Equalization Works"
"• Equalization entitlements are determined by measuring provinces' ability to raise revenues – known as 'fiscal capacity'.
"• Before any adjustments, a province's per capita Equalization entitlement is equal to the amount by which its fiscal capacity is below the average fiscal capacity of all provinces – known as the '10 province standard'.
"• Provinces get the greater of the amount they would receive by fully excluding natural resource revenues, or by excluding 50% of natural resource revenues."
https://www.canada.ca/en/department-finance/programs/federal-transfers/e...
*
Calculation of a province's fiscal capacity (i.e., whether it qualifies for equalization payments) is based on actual revenues collected from five revenue streams, including natural resources.
If a province qualifies for equalization payments, its actual entitlement (dollar amount) is calculated in either of two ways: The province may choose to exclude either 50% or 100% (full exclusion) of natural resource revenues from the fiscal capacity calculation, whichever maximizes its entitlement.

[Footnote 1] Quebec Abatement:
For certain programs, Quebec taxpayers pay the equivalent amount of these federal taxes directly to their provincial govt.
Quebec taxpayers still pay the same effective rate of tax, but that portion (16.5%) is sent directly to the provincial govt instead of indirectly via Ottawa. Eliminating the middleman (Ottawa). Federal health and social welfare transfers to Quebec are reduced accordingly. So it comes out even.
https://www.canada.ca/en/department-finance/programs/federal-transfers/q...

Yes, Quebec has a surplus. Québec also makes far more use of its fiscal capacity than AB does. Québec's provincial tax rates rank among the highest in the nation. Québec residents also pay 9.975% PST.
Equalization payments raise Québec only to the national average in terms of provincial revenues and services — and only if Québec tax rates are comparable to the national average. If Quebecers want better services than the national average, they must pay for them.
Québec receives the smallest equalization payments per capita. (2019) First place goes to PEI.
Québec receives the bulk of equalization payments because it is home to 23% of Canada's population; the other four receiving provinces are small (8.7% of Canada's population combined).
*
"Equalization has nothing to do with whether a province is in deficit or surplus, since that is a result of all sorts of political decisions unrelated to how rich its economy is."
"Andrew Coyne: Only thing equalization has spread evenly in Canada is discontent" (National Post, Dec 12, 2018)
https://nationalpost.com/opinion/andrew-coyne-only-thing-equalization-ha...
*
"…If Alberta is experiencing budgetary woes, it has nothing to do with Albertans being forced to finance generous equalization payments for Quebec, but rather stems from provincial tax rates that are nearly 30% below the national average. Quebec’s tax rates are almost 30% higher than the Canadian average, which in part explains why its budget is in surplus."
"Under Kenney’s plan, Quebec’s equalization take would grow
https://www.theglobeandmail.com/business/commentary/article-under-kenney...
Konrad Yakabuski, November 26, 2019

Thanks Geoffrey, as always, super helpful :)

Quebec does not include revenue as part of the "equalization formula" from massive hydro electric production in the province (one example). British Columbia on the other hand does. Quebec's per capita equalization figure is much, much larger than any other province's. (2018 numbers). How about every province collects all the provincial taxes and then equalization payments are determined on an equal playing field?

Quebec Hydro, provides a 3 billion dollar dividend to the government. If only Alberta had not reduced royalties to just about zero, we can only hope.
Another reason we Albertans feel taken advantage of is the fact we pay 4 x the amount per KWH for electricity. Ah, isn't privatization wonderful.

I think that there should be a Canada wide referendum on the following proposition: "Any province that does NOT have a provincial sales tax should NOT be eligible for ANY fund transfers from the government of Canada". (based on the premise that if there is no provincial sales tax, the province therefore doesn't need more funds)

Indeed, even if they had added provincial tax at the same time GST was imposed on them by Mr. Wilson and just squirrelled that money away for a rainy day in Peter Lougheed's heritage fund, Mr. Kenney might likely be I in charge of running Canada's richest province. Instead we're talking about the heritage fund being only a shell and generations of Albertans misled by longstanding bad governance shaping an identity based, generously speaking, on wishful thinking. When you've been misleading people for that long, even if/when you finally decide to try to level with them, will they believe you? I think perhaps Ms. Notley in part is/was faced with the same predicament - would Albertans have even believed her if she presented them with the reality of their predicament?

Since the 80s, Ontario has routinely provided greater amounts in equalization to the federal government than the western provinces combined. Alberta contributed more than Ontario in one year, 2018. So, a referendum based on a myth, based on a high lited resource, oil, that's going over a cliff sooner than later.

Indeed. In pre-pandemic, pre-oil downturn years the Greater Toronto Area alone generated nearly the same annual GDP as did the entire province of Alberta, oil and all. Usually $300B - $350B. In BC Metro Vancouver generates half the wealth of the province.

This is not news to urbanists and many economists who have always seen that cities are the real economic engines of the nation, not resources on their own.

The equalization formula is based largely on income levels. The solution for anti-equalizers in Alberta is very simple: lower your incomes. So, who will be first?

There were one or two recent oil price downturn years where Alberta received MORE equalization money per capita than Quebec. Oh, the irony!

This equalization referendum is nothing more than a political stunt. A politico with real courage would launch a referendum on separation based on a small-minded tiny minority of proponents, and would face down the genuine threat of a mass exodus and a regional economic depression. Moreover, hard negotiations with the feds will ensue who would no doubt deduct all its land assets (national parks, military bases, airports, transportation corridors...), sue for the return of hundreds of billions in oil subsidies to Alberta industry over the generations, and disavow any responsibility for yet more hundreds of billions in unaddressed environmental liabilities. It'll get really painful when the feds forcefully retain at least two land corridors that connect to West Coast ports.

The only advantage of a separation referendum in Alberta would that the subject will be put to bed once and for all. Compared to that, Jason Kenney's courage amounts to a bag of Jell-O.

I think a fair referendum question would go something like, "Do you support scrapping the equalization formula your premier was influential in crafting when he was a cabinet minister to Stephen Harper's government?"

When gullible voters are lied to and gaslighted for years, plus many get their info from social media sites whose sole purpose is to mislead and suck them in, what do you expect in a questionnaire? Ignorance is a daily fact in Alberta. And unfortunately many boast about their ignorance. Voting every 4 years will not sustain a democracy .