Alberta’s contributions to the federal coffers

It is more blessed to give than to receive. the Bible, Acts 20:35

This week the Fraser Institute issued a report describing the Alberta economy during the energy boom. The report also talks about Albertans’ contributions to Confederation through population migration, job creation and federal taxes. The growth numbers are impressive!

But some numbers may generate a little frustration – particularly when you consider how eager some Canadians are to put a stick in the spokes of Alberta’s bicycle.

The report says:

  • In 1981 Alberta has about 2.3 million people. As the fastest growing province in Canada, today we at 4.3 million and growing.
  • Between 2004 and 2014 a surge of migration from the rest of Canada brought a net number of 270,000 people.
  • Alberta added 361,000 jobs during that period, a third of the 1.1 million jobs created in Canada
  • In the same period, Alberta’s economy grew at 3.4% annually versus 1.6% in the rest of Canada and
  • The province’s share of national GDP rose for 14% to 18% in only a decade.

Ahhhh those were the days…….

The report goes on to say Alberta contributed disproportionately (relative to its population) to federal revenue. This is mostly due to economic activity (corporate profits), high wages (and high tax brackets), and a young population that isn’t receiving old age security payments.

  • In 2014, the feds got 18% of their revenue from Alberta, while our population was 12% of the national population.
  • The federal government makes transfer payments through an equalization program to “have not” provinces. Alberta has not received these payments since the late1950s. (Alberta did get $250 million last year from a short term stabilization program when revenue tanked.)
  • The federal government paid out $158 billion in equalization payments in the past 10 years and the Fraser Institute report calculates that about $28 billion came from Alberta.
  • Transfer payments are a big deal to ‘have not’ provinces, over the last 10 years – Quebec got $87.9 billion.
  • The federal government has two other transfer programs of note – the Canada Social Transfer and the Canada Health Transfer. On average last year’s per-capita payments to provinces was $1,955, although Alberta got only $1,360 per person.

But before we launch an Alberta Pity Party let’s ask ourselves some severely normal questions:

  • Would we prefer lower wages, lower capital investment, and an older population so that we get more federal cash?
  • It is oil and gas that is at the heart of our prosperity, are we not obliged to share some of this happy accident of geography with the rest of Canada?
  • And thinking about history; are we not downright thrilled about the 1930 Natural Resource Transfer Act  that allocated natural resource revenue to the western provinces so that they were equal with other provinces?
  • And are we not indebted to Peter Lougheed for “kicking the feds off the porch” when Prime Minister Trudeau 1.0 launched the 1980 National Energy Program

The Bottomline: We might be in an economic trough now but the past decade saw a spectacular Alberta growth spurt. It was mostly energy related but fuelled by Albertans ‘can do’ approach and supported by 270,000 migrants from the rest of Canada who came to help and to prosper.

 

One thought on “Alberta’s contributions to the federal coffers

  1. Interesting breakdown of this. Yeah, it’s better to have the resources and to be on the giving end.