A Fairly Interesting Report

“The grievances, the inequities, the discontent, the so-called alienation, are real. In Western Canada the problems have been growing steadily for some considerable length of time. This goes back through a succession of governments involving different political stripes.” 

Otto Lang 1974 House of Commons

In November, the election of a minority Liberal government (without representation between Winnipeg and Vancouver) caused ‘western alienation’ to become a verb again.  Quickly, Alberta Premier Kenney presented a lengthy list of actions that Alberta wanted the federal government to embrace.  

And at home, he created a Fair Deal Panel to plumb the depths of Albertans’ anger and test drive some warmed over conservative ideas from a “Firewall” letter written the last time western anger boiled over.

The Fair Deal Panel report has 25 recommendations. About half of the recommendations directly address the main issues of western frustration; while others speak to the right-wing orientation of the terms of reference.

Three issues are at the heart of western anger and frustration:

  1. Lack of fair representation in the House of Commons and the Senate. This is further exacerbated by the Prime Minister’s mishandling of western issues.
  2. The continuing efforts by the federal government to obstruct oilsands development. 
  3. A very large net wealth transfer via federal taxation over the past 60 years; particularly through the constitutionally protected Equalization Program. The Panel reported that the net outflow from Alberta to the federal government since 2007 was $240 billion and $660 billion in the past 60 years. Moreover the Parliamentary Budget Office forecasts Alberta will not benefit from the program in the next 40 years either.  
Fraser Institute 2017

And this angst is further deepened by:

  • A double dip recession featuring unemployment levels not seen outside of Newfoundland.
  • Ballooning budget deficits that cannot be remedied by austerity alone.

So, what are the Panel’s main messages about the central problems that confront the West?

Federal taxation and revenue sharing – Apply the Pressure

  • They supported a provincial referendum, a sort of ‘customer satisfaction survey’, on that part of the Canadian Constitution that enshrines equalization payments. The idea is to push the federal government to change the calculation methodology of the program. 

Fair Representation in the House of Commons and the Senate – “Highlight the Discrepancies!”

  • The Panel says better representation by population for seats in the House of Commons is needed.  It calculated that Alberta would gain 5 MPs and BC 2. Manitoba would lose 2 seats and Saskatchewan and Quebec would each lose 3. Ontario would gain 7 seats and the Maritimes would lose 7.
  • The Panel endorsed an elected Senate. But the Panel sees this as a rather forlorn hope, But, as an interim step they believe other provinces should also elect “Senators in Waiting”. This would ultimately pressure the federal government to appoint elected senators instead of the current practice of appointing their friends.

The Obstruction of the Alberta Economy – “Build a Block of Partners!”

  • The Panel recommended a collaborative approach with other provinces to establish cross border rights of way and access to tidewater.
  • Several recommendations proposed that provinces work together to increase provincial influence on trade, immigration and northern development; at the same time aggressively challenging federal intrusion into provincial responsibilities.

The Old Firewall Agenda – Let Them Know We Mean It!

  • The Panel was asked to comment on a number of far-right proposals. The motivation behind these proposals is either to set the stage for independence or convince the rest of Canada that Alberta’s concerns are not to be ignored.  The proposals have no real linkages to the root cause of Alberta’s frustration.  The Panel’s recommendations are:
    • Create a concept for an Alberta Pension plan, subject to a provincial referendum.
    • Establish an Alberta Police Force to replace the RCMP.
    • Opt out of any new federal provincial programs and take cash instead.
    • Don’t opt out of existing health and social transfer programs; it is too risky.
    • Don’t take over administering personal tax collection.
    • There is no need to write an Alberta Constitution.

So Now What?

  • At its heart the report is meant to continue the discussion about fiscal and political power in Canada.  It will keep that conversation alive for the time being.
  • The report missed an opportunity to propose that the Equalization Program be downsized in favor of per capita transfers in Health and Social transfer programs which would be fairer to Alberta.
  • Over-representation in the House of Commons for Atlantic Canada and Quebec are baked into the Canadian political landscape. And the Senate continues to be an ineffective tool to look after regional interests. The report offers a practical idea of encouraging more provinces to elect ‘Senators in waiting’.
  • The report suggests building a coalition of Premiers to counter the federal government’s excesses.
  • The report offers just a little red meat to the UCP’s conservative base (provincial pension and policing).  The risks and costs killed these ideas last time they were suggested, so the ideas may not survive the next level of analysis.