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The so-called 'have not province', Quebec, will get an increase of $1.8 billion in transfer payments from the federal government for a total of $13 billion annually. The formula for calculating this was arbitrarily changed by the Liberals. All of the other 'have not provinces' will receive $11 billion, combined.o_O The province of Quebec will run a budget surplus in 2018 and has an unemployment rate of 5.4% .. slightly below the country's average. :rolleyes:
The new Quebec premier recently stated that there is 'no social license for pipelines carrying dirty oil' in his province. In the meantime, he is willing to accept an increase in transfer payments from which Alberta oil & gas is a very large contributor of the $13 billion. :confused:
Can someone tell me why we as Canadians, living outside Quebec, should accept this??? It is nothing more than the Liberals keeping their base of voters in Quebec, content until the next election. They have done absolutely nothing to assist Alberta's flailing economy, or even try correct the myopic and false opinion many Canadians (outside of Alberta) have of the Alberta oilsands. :mad:
 
It wasn't changed. It is the same formula Harper's government set. It was just extended. And we are much richer than Quebec.

I get the frustration, but there is no scenario where a program exists to ensure poor province can provide equal services at equal taxation where Alberta receives a transfer.
 
I stand corrected. The Liberals arbitrarily extended the program in its' current state.

Sure Alberta has lots of oil & gas in the ground that has yet to be tapped. However Alberta is 'handcuffed' by market forces in realizing the full potential of those resources. Oil & gas revenues are significantly less than they were 4 years ago. Fewer wells are being drilled, major oilsands expansion projects have been shelved, and of course no pipelines are being built. Not sure how this scenario makes Alberta richer than Quebec.
Quebec on the other hand has chosen not to explore or invest in natural resources they have in the ground. Quebec has a huge hydro-electric resource that does not seem to be factored adequately in the transfer payment formula. It is also a resource that should be fairly shared with Newfoundland/Labrador but isn't, because of an ill advised agreement between the two provinces. Quebec has social programs (i.e subsidized daycare) funded by the province (or other provinces through transfer payments) that are not available elsewhere in Canada.
This is not meant to be 'Quebec bashing' but something has to change here. They are no longer a 'have not' province to the tune of $13 billion. Since they are benefiting from the rest of Canada, they need to get on board with a national energy policy.
 
If I'm not mistaken the transfer payments are calculated purely off of individual income tax and business taxes. Maybe someone can clarify if cost of living is factored into the transfers? Albertans on average make far more than Quebecers, which is why Alberta is still a 'have province', but cost of living is also higher here. I don't know if cost of living is factored into it or not. It should be if it isn't.

As for the politicians in Quebec who are anti-oil and still accepting transfer payments. Yeah, that really pisses me off. I don't believe all Quebecers feel this way - I recall around 55% of Quebecers were in support of Energy East - but politicians (or anyone in Quebec really) railing against oil and pipelines while receiving transfer payments is sickening. The politicians should take a stand by declaring they aren't going to receive any money from Alberta. I'd love to see that.
 
The formula was based on personal and corporate income tax base but years ago, revenue from natural resources was added with a weighting of 50%. While Albertans may have higher average annual wages compared to Quebec, the population of Alberta is half what it is in Quebec. I don't know how corporate taxes stack up for each. I thought I heard their hydro electric business is not included in Quebec's calculation but I may be wrong.
 
Western Canada always has, and always will be seen as nothing more that a cash cow to the east. They don't give two shits about us.

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JoeUrban said:
My main concern is why is hydro power not included?
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It is as profit for crown corps, but not in the theoretical way if you calculated the market value of electricity sold, and then calculated the forgone profit of the crown corp. But, if you were to start going down that road, would you do the same for the cheap phone, cable, and internet that SaskTel provides? Or the cheap-er insurance of ICBC? Should we count the cheaper user fees of Alberta's roads? The lower royalties on certain oil and gas things? What about forgone profits for residential water services?
 
I couldn't find anything that clearly says cost of living is factored in. I would hope it is.
Habanero said:
If I'm not mistaken the transfer payments are calculated purely off of individual income tax and business taxes. Maybe someone can clarify if cost of living is factored into the transfers? Albertans on average make far more than Quebecers, which is why Alberta is still a 'have province', but cost of living is also higher here. I don't know if cost of living is factored into it or not. It should be if it isn't.

As for the politicians in Quebec who are anti-oil and still accepting transfer payments. Yeah, that really pisses me off. I don't believe all Quebecers feel this way - I recall around 55% of Quebecers were in support of Energy East - but politicians (or anyone in Quebec really) railing against oil and pipelines while receiving transfer payments is sickening. The politicians should take a stand by declaring they aren't going to receive any money from Alberta. I'd love to see that.
Click to expand...
 
Whatever the formula does or does not factor in, it could not possibly justify paying Quebec $13 billion and the rest of the 'have not' provinces $11 billion combined. Particularly as their economy is outperforming many other provinces, including Alberta.
The formula has to change!
 
JonnyCanuck said:
Whatever the formula does or does not factor in, it could not possibly justify paying Quebec $13 billion and the rest of the 'have not' provinces $11 billion combined. Particularly as their economy is outperforming many other provinces, including Alberta.
The formula has to change!
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But their economy is not out performing Alberta in the way that matters: the ability to generate tax revenue. All those employed people are still earning far less money each.
1544717518948.png


On that measure, Alberta at our recent low, was higher than all other provinces at their recent highs. Alberta's recent low, was even higher than Saskatchewan at their recent high!

Quebec, and other receiving provinces are by all relevant measures worse off than Alberta. Even with our unemployment, we, as a whole, are better off than everyone else. One reason our unemployment is so high is that people are still moving to Alberta, because we still offer a better environment to live, because our economy even with the weakness is still better.

It is important to not conflate the state of the economy with the state of the provincial budget. Our budget deficit is a choice.

The Alberta government measures our so called tax advantage. In the budget, the government calculate how much extra revenue the government would make if it adopted any other province's tax structure. If we switched to any other province's tax structure, the provincial budget would be in surplus.
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While I appreciate all of the data, I'm not sure what point is. That things are worse in Quebec and better in Alberta than they seem, therefore the $13 billion to Quebec is justified?
The optics of the $13 billion are BAD! A percentage of that payment comes from oil & gas revenues, an industry that Quebec has pretty much turned its' back on.
 
JonnyCanuck said:
That things are worse in Quebec and better in Alberta than they seem
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Yes. Alberta is in an awful spot for sure. And interprovincial trade and regulation not working is an entirely different issue. But equalization is not about smoothing out swings in revenue. It isn't about dealing with unemployment. It isn't about giving a province money to make up for the collaspe of a revenue source that it has used to keep taxes lower for 60 years.

Alberta already received our money under the "Fiscal Stabilization Program". The program "enables the federal government to provide financial assistance to any province faced with a year-over-year decline in its non-resource revenues greater than 5 per cent". "The maximum payment to a province that makes a claim for a given fiscal year is $60 per person." The $60 limit was set by the Mulroney government. Alberta received $419 million under an older formula in 1986, which is why (gathering from when they amended the Act) the act excludes swings in natural resource revenue now, and has a per capita cap. Alberta at the time I believe elected a full slate of Mulroney MPs.

Alberta received $251.4 million in 2016 from this program.

What Alberta should be asking for is this program to change, to have longer time horizons (3 years would be reaonsable for a structural shift), and be proportional to the revenue drop, or at least be indexed to inflation.
 
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Unemployment stats are definitely tricky. A place like Saint John, New Brunswick for example has fairly low unemployment (6.1%), but is a terrible places to find jobs, because there just aren't many new ones being generated. The labour force isn't growing so the unemployment rate might be lower than Calgary's but it's still easier to find a job here, and still easier to earn bigger bucks.

This article is 8 months old, but shows the irony of unemplyment stats.
https://www.cbc.ca/news/canada/new-brunswick/job-rates-unemployment-employment-1.4607690
New Brunswick lost 1,800 jobs last month, while unemployment rate declined to 8%

That said I can see how it's frustrating to see billions going to other provinces when things aren't great here, and even more frustrating when provinces like BC and Quebec are opposing projects like pipelines due to so called 'environmental' reasons, but are happy to take the equalization payments.
darwink said:
Quebec, and other receiving provinces are by all relevant measures worse off than Alberta. Even with our unemployment, we, as a whole, are better off than everyone else. One reason our unemployment is so high is that people are still moving to Alberta, because we still offer a better environment to live, because our economy even with the weakness is still better.
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Resales homes in 2018 were the lowest since 1996 and 20% below the long-term average. The new home sales report when it comes out will undoubtedly mirror this. If there is still positive net migration to Calgary, these people are more likely renting than buying.
Like oil & gas, this is another industry that is critical to any economic recovery.
 
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