House Speech on Equalization Reform - 2016

In November of 2016 we debated a motion on equalization in the Alberta Legislative Assembly.  The NDP voted it down. 

Here is an edited excerpt:


November 28, 2016

Motion 509. Mr. Jean moved:

Be it resolved that the Legislative Assembly urge the government to complete and make public a report by August

31, 2017, that evaluates the current equalization formula and outlines the improvements the government will seek on

behalf of Albertans when the equalization program is next renegotiated.


Mr. Panda: Mr. Speaker, I'm really disappointed that government members forgot who elected them, who they have to represent, but

the Official Opposition and all the opposition here are actually representing Albertans because they know that they were elected by

Albertans. We are on the side of Albertans.


I am proud to rise to support the Leader of the Official Opposition's Motion 509, calling on the government to make

Alberta's position public by next summer so we can begin a national conversation. This reasonable motion before us today gives

everyone in this House the opportunity to tell their constituents about this danger and do something to help Alberta get a better deal

from Ottawa.


The aim of equalization payments is to ensure that reasonably comparable levels of services are available at similar

taxation levels and, second, that the commitment is only to the principle of achieving reasonable comparability. In 2014 over $28

billion was extracted from Alberta taxpayers and sent to Ottawa, never to return. How are we supposed to grow and develop Alberta

if we force Albertans to make a net contribution to Ottawa that is bigger than the entire budget for the national defence of the

Canadian federation? It's not right.


It is not just we politicians who have been saying that we need a better deal on equalization. Academics, economists, and ordinary

Albertans all realize that equalization isn't working for Canada, whether we are a have or a have-not. This is why the Wildrose

turned to the experts and the think tanks to help understand equalization better and figure out what we need to do. Yes, the Wildrose

sought help from Dr. Marco Navarro-Génie at the Atlantic Institute for Market Studies out of Halifax.


Halifax is surrounded by four chronic net-recipient provinces of equalization: Nova Scotia, New Brunswick, Prince Edward Island, and Quebec.

Some say that equalization allows those provinces to not reform their public services to get better value for money. That

is recommendation 3 from our report, that equalization be made conditional on steps being taken by

recipient provinces with relatively high program delivery costs to reduce costs so that the per capita costs of providing

programming in the recipient provinces would not exceed the national average.


Equalization also creates disincentives for recipient provinces to

grow their economy for fear of going off the equalization payments.

We see that in Quebec, Nova Scotia, and New Brunswick they do

not want to develop their resource industry out of unfounded

environmental fears, fears that we have dealt with in Alberta for 50



But Quebec can sure offer substantially lower tuition fee

rates at public universities and colleges than other provinces, and

the students will misbehave and riot and bang pots and pans

together to protect that low price. They will also protest Energy East

and fracking without realizing that it's Albertans, many working in

the energy sector, that are paying for their cheap tuition.


Besides the equalization program, there are other cash transfer

programs from Ottawa that put Alberta at a disadvantage – we call

these stealth equalization – programs like employment insurance. If

you fish for a living on the east coast, after two days on a boat you

can qualify for employment insurance. Fishermen's employment

insurance is income based, not based on the number of days



These self-employed people are no different than farmers

and ranchers. I don't see farmers' employment insurance based on

the income they made; in fact, they, like all the other self-employed

folks in Alberta, aren't eligible at all. It was Prime Minister Pierre

Elliott Trudeau that set this scheme up for fishers in the 1970s with

the support of his Maritimes lieutenant, Allan J. MacEachen. It was

a bad scheme then, and it's a bad scheme now.


Maritimers and Newfoundlanders – and I should know; I have

one working for me – joke about going on lotto 10/42: work 10

weeks, and get employment insurance for 42 weeks. Wow. What a

great disincentive on the search for work, job creation, and

innovation. Who would want to do anything when all you have to

do is work for 10 weeks and get pogey for 42 weeks? Then you can

spend your time going for coffee, driving a quad or snowmobile on

the trails, or working under the table in the black market.


Maritimers and Newfoundlanders will complain that their

industries are seasonal. That's right. Some probably are, but what

about the rest of the year?


Alberta farmers and ranchers have a seasonal industry, too. So

does oil and gas. Did you ever hear of a spring breakup? Some

people will complain about all the people that will have to move

away from their communities to find work. Well, I promise they

won't have to move as far away as I did. That's just life sometimes,

Mr. Speaker, especially when your government isn't generating an

investment-friendly economic environment. People all over the

world move all the time to find work. Look at all the economic

immigrants like myself. We didn't choose easy street. Why do

small communities out east get to live on easy street on the backs

of Alberta taxpayers? It's a wealth transfer, pure and simple.


Here we have oil and gas workers out of work, and their EI has

run out. What are they going to do? Our guys out here can't work

anywhere for 10 weeks and then get 42 weeks of employment

insurance. Of course, they can't rotate in and out of a rig for 10

weeks each and collect from the government for the rest of the year.

That would be wrong and a terrible disincentive. Instead, if they

can't find any work, they'll have to turn to the Minister of Human

Services and demand income support. It's not fair, Mr. Speaker.


Our recommendation 5 reads, “That substantial reforms to the

Employment Insurance (EI) Program be made to [ensure that it

treats] similarly situated Canadians with more parity.”


Alberta paid over $3.3 billion into EI in 2013 and received only $1.4 billion in

benefits. That includes maternity leave. That means that almost $2

billion was transferred out of Alberta to pay for EI in places like

Atlantic Canada.


Mr. Speaker, the case for reforms is clear, and negotiations will

get nowhere if we wait. We need to educate Albertans and Canadians

on the facts. So I rise today to add my voice to that of the hon.

Member for Fort McMurray-Conklin and call on the government to

evaluate the current equalization formula and outline the

improvements they will see on behalf of Albertans.


Mr. Speaker, with that, I ask all members of this House to support this private member's motion. Thank you.


For the motion:

Aheer Hunter Panda Barnes Jean Rodney Clark Loewen Schneider Cooper MacIntyre Smith Cyr McIver Stier Fraser Nixon Taylor

Hanson Orr


Against the motion:

Anderson, S. Horne Miranda Babcock Jabbour Nielsen Carson Jansen Payne Ceci Kazim Piquette Connolly Kleinsteuber Renaud

Coolahan Littlewood Rosendahl Cortes-Vargas Loyola Schreiner Dach Luff Shepherd Dang Malkinson Sigurdson Drever Mason Sucha

Fitzpatrick McCuaig-Boyd Turner Goehring McKitrick Westhead Hinkley Miller Woollard Hoffman


Totals: For – 20 Against – 40