Alberta gives more than it gets from federal government: Fraser Institute
Alberta contributed more money to the federal purse than any other province in Canada from 2007 to 2015, and has received fewer dollars in return, according to a study released Thursday.
The study by the Fraser Institute — a conservative, free market policy think tank — found the province contributed $221.4 billion more in revenue than it received in federal transfer payments and other services in those years.
That works out to about $5,000 per Albertan, per year, according to Ben Eisen, director of the Fraser Institute’s Alberta Prosperity Initiative.
“It’s really impossible to get away from the fact that without a strong Alberta, without Alberta’s contribution to Canada and to federal finances, our federal finances would be an absolute mess,” Eisen said.
LISTEN: Fraser Institute report on Alberta’s outsized contribution to federal coffers
The report said that of the $158.3 billion paid out in equalization payments from 2008/09 to 2017/18, roughly $28.1 billion came from Alberta.
It said none of that money has flowed back into Alberta. And it said the province continues to “contribute disproportionately” despite its recent economic woes.
Equalization payments are intended to make it so that provinces can provide comparable services at reasonably comparable rates of taxation.
Provinces that have an easier time raising revenues will receive smaller payments.
A spokesperson for the federal minister of finance said in a statement Thursday that “the federal system benefits all Canadians” and that the government is making significant investments in Alberta through infrastructure improvements, and home care and mental health initiatives.
“Our government fully appreciates the gravity of the challenges faced by Alberta and has taken action to provide immediate help to Albertans,” said Chloe Luciani-Girouard, press secretary to the minister.
Luciani-Girouard said in the 2015/16 fiscal year the government provided Alberta with advance fiscal stabilization payments adding up to $251.4 million and extended employment insurance (EI) benefits in the regions that were hardest hit by unemployment.
The Fraser Institute report also takes aim at the provincial NDP government, blaming them for at least some of Alberta’s woes.
It claims tax hikes at the provincial and federal levels have hurt Alberta’s business advantage, making it more difficult to attract investment.
“Alberta has much work to do in order to begin helping itself and create the conditions for a strong sustained recovery,” the report reads.
The Fraser Institute report said the provinces have benefited from Alberta’s success and should now step in to help their neighbour.
“Over the past decade, Alberta has been a place where Canadians from all parts of the country could go to build a more prosperous life,” said a statement from senior policy analyst Steve Lafleur.
In the midst of the oil boom, between 2004 and 2014, the report said Alberta created 32.5 per cent of all private sector jobs in the country, despite “having only 11.7 per cent of the country’s population.”
Just two years ago, in 2015, the report said Albertans paid about 63 per cent more in federal tax dollars than other Canadians.
Without revenue from Alberta, the report claims Ottawa would have seen big deficits every year since 2009.
“We’ve got a pretty big deficit this year… Without Alberta’s big contribution, that’s about twice as big,” Eisen said.
The Fraser Institute said provinces should help Alberta by refusing to encourage protests against projects like the Energy East and Trans Mountain pipelines.
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