As oil price struggle continues, Alberta finance minister calls for changes to equalization program
Alberta Finance Minister Joe Ceci said the federal equalization program needs fixing, because the way it is now doesn’t work for Albertans.
Speaking in a scrum with reporters in Ottawa on Monday, Ceci said the current formula used to deem provinces either “have” or “have nots” has continually failed to help Alberta deal with significant hurts endured due to sharp losses of oil revenue.
The formula allocates billions of dollars in payments to those provinces that are calculated to need extra help providing programs and services to citizens.
“Equalization does not work for Alberta. We’ve expressed that view before,” he said.
“It doesn’t work.”
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His comments came during a meeting of federal and provincial finance ministers in Ottawa on Monday.
Those talks came on the heels of the First Ministers’ Meeting in Montreal over the weekend where Ceci says Alberta Premier Rachel Notley had to “get her elbows up” in discussions over the province’s oil price crisis.
After years of falling oil prices, Alberta continues to face a steep difference in price for what it can get from the American market.
Landlocked and without enough avenues to get oil to tidewater, the province is captive to the prices American businesses are willing to pay.
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That’s because the province can’t reach international markets and the higher prices available there.
And that is costing Albertans roughly $80 million per day, Ceci said.
He also slammed the $252 million in stabilization funding the federal government handed over in 2016 as “totally inadequate,” saying that changing the equalization formula would help Alberta stabilize its revenue planning.
“We needed monies to create a stable revenue projection for our province so that we wouldn’t have to take actions that, frankly, the citizens of Alberta wouldn’t support, like deeply cutting programs and services,” he said.
“We can’t do that, so we have chosen to stabilize that with out own borrowing.”
Reviewing the formula used in determining equalization payments in five years, as Finance Minister Bill Morneau has promised, is not good enough, Ceci says.
Ceci also reitered the call made by Notley in recent months for federal cash to help purchase more rail cars to transport crude oil.
The call for greater transport by rail comes as construction on the Trans Mountain pipeline remains stalled.