by Stephen Dafoe
With a federal election likely in the coming months, the Conservative Party of Canada are vowing to fix equalization. Both the party and its leader, the Honourable Erin O’Toole issued media releases on Thursday announcing their intentions.
The Fiscal Stabilization Program was created more than a hlf century ago, in 1967, to provide support to the provinces whenever they experienced sudden significant revenue drops, stabalizing the provinces’ finances by providing payments whent here were large decline in general or resource revenue. As such, the program provided an equalization rebate for those provinces.
Rebates have been capped at $60 per capita since 1987, an dlast year Premiers were unanimous in their demand to significantly change the program. The Conservatives content the response from the Liberal government was to make some minor tweaks.
Since equalization payments began in 1967, Alberta has contributed $600 billion to the rest of Canada through taxes going into federal coffers and some of those taxes ($600 billion) going to other parts of the country via the Fiscal Stabalization Program.
Alberta’s current UCP government has been particularly critical of equalization and plan to have a referendum item on the fall municipal election tables.
“Even as Alberta’s economy suffered with massive reductions in resource revenues, Albertans continued to pay more than their fair share to support the rest of the country,” O’Toole said. “That’s why a Conservative government will fix the Fiscal Stabilization Program as a first step to ensuring that Western Canadians are treated equally in our confederation.”
The Conservatives plan to, if elected, remove the per person payout cap, lower the revenue decline threshold so that it is triggered at 3% rather than the current 5%, and lower the resource revenue decline threshold so that it is triggered at 40% rather than the current 50%. Additionally, all changes would be retroactive to 2015.
The Conservatives say that while their proposed changes would benefit all provinces, Alberta would see the greatest benefit with the province receiving about $4 billion.
“Alberta is struggling, and Albertans quite reasonably expect the rest of the country, including the federal government, to be in their corner,” O’Toole said. “To begin to address the fact that Albertans have been asked to pay more than their fair share, a Conservative government will implement an Equalization Rebate, to give Albertans back some of the extra money they’ve paid during these tough years.”