Alberta’s Fair New Deal will increase taxes for Albertans

The Fair Deal Panel report was published by the provincial government this week, and it’s all about bloating the provincial public sector.

Last November, the Alberta government announced that they were creating the Fair Deal Panel—with a $650,000 budget—which would “to consult Albertans on how best to define and to secure a fair deal for Alberta. The panel will also look at how best to advance the province’s vital economic interests, such as the construction of energy pipelines.”

The Fair Deal Panel submitted their final report about a month ago.

Earlier this week, the provincial government finally released that report to the public.

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Over 40,000 people participated in the consultation process, which ended up with 25 recommendations, all of which the government accepts—or more accurately, “There are no Fair Deal recommendations which the government rejects outright.”

The recommendations were classified into 4 areas:

  • Those where work is already underway
  • Those agreed to in principle
  • Those where there’s support to conduct further analysis
  • Those needing modification to align with government platform or policy direction

Recommendations where work is already underway

Thirteen recommendations fall in this category.

  • 1) Press strenuously for the removal of the current constraints on the Fiscal Stabilization Program
  • 3) Collaborate with other jurisdictions to reduce trade barriers within Canada and pressure the federal government to enforce free trade in Canada
  • 4) Collaborate with other jurisdictions and other stakeholders to secure cross-border rights of way and create unobstructed corridors within Canada to tidewater and world markets
  • 5) Collaborate with other jurisdictions to design and advance regional strategies for northern development; pressure the federal government to implement those strategies
  • 6 A) Support and press for the strictest possible application of the principle of representation by population in the House of Commons
  • 6 B) Work with other provinces and the federal government to democratize the Senate appointment process
  • 10) Collaborate with other provinces and industry to advance market-based approaches to environmental protection, including a reduction in GHG emissions
  • 11) Continue to challenge federal legislation that affects provincial jurisdiction
  • 15) Appoint an Alberta Chief Firearms Officer (CFO)
  • 16) Secure a seat at the table when the federal government negotiates and implements international agreements and treaties affecting Alberta’s interests
  • 17) Strengthen Alberta’s presence in Ottawa
  • 20) Continue to diversify Alberta’s economy in the energy sector and beyond
  • 21) Vigorously pursue access to markets for Alberta’s exports
  • 24) Use democratic tools such as referenda and citizens’ initiatives to seek Albertans’ guidance on selected Fair Deal Panel proposals and other initiatives

I won’t respond to all of these, mostly because it’ll take so long and these recommendations are already underway. However, there are a few I wanted to address briefly.

Recommendation 10 mentions market-based approaches to environmental protection. Market approaches to anything are profit-driven. The only way to generate profit is to have revenue be higher than expenses, which include such things as material costs and fuel and utility costs. Raw materials, fuel, utilities, and the like are all generated through the exploitation of natural resources. The only way to keep those prices low is to extract them at the lowest cost possible. Sustainability and profitability are unsustainable.

I don’t understand recommendation 20, which says that Alberta should diversify its economy in the energy sector and beyond. I mean, I get the beyond part. But how do we diversify the economy within the energy sector?

Are there untapped fossil fuel reserves that aren’t coal, natural gas, crude oil, or bitumen? Or are they talking about some sort of technology that makes resource extraction quicker, cheaper, or both? Because if it’s the latter, I can’t imagine that it’s going to diversify the oil and gas sector by any significant amount.

Perhaps they’re referring to nuclear or renewable energy? That’s possible, but I always get the impression when they’re referring to the “energy industry” in Alberta, it’s used synonymously with “oil and gas”. If they are going to invest in nuclear and renewables, however, I’m all for that

I don’t understand recommendation 24 either. Seek guidance from voters on how to implement Fair Deal Panel proposals? Wasn’t the entire point of the Fair Deal Panel consultation process to include input from voters? Now voters need to provide input on the input from voters?

Recommendations agreed to in principle

These 6 recommendations are ones that the government isn’t actively working on already but they generally agree with.

2) Proceed with the proposed referendum on equalization, specifically to remove section 36 from the Constitution Act

This is meaningless. Here’s what section 36 says:

  1. Without altering the legislative authority of Parliament or of the provincial legislatures, or the rights of any of them with respect to the exercise of their legislative authority, Parliament and the legislatures, together with the government of Canada and the provincial governments, are committed to
    1. promoting equal opportunities for the well-being of Canadians;
    2. furthering economic development to reduce disparity in opportunities; and
    3. providing essential public services of reasonable quality to all Canadians.
  2. Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

The equalization programme (although not the specific formula) is enshrined in the constitution. Alberta can’t change that, no matter how many referenda they hold. Section 38 of the constitution requires any constitution amendment to be authorized by a resolution of the senate, a resolution of the House of Commons, and resolutions from at least two-thirds of the provinces, who collectively make up at least 50% of the country’s population.

Holding a referendum on removing a section of the constitution would be a waste of money, which is probably why in the government response to this recommendation said they agree with the recommendation in principle but would need to determine what an appropriate question would be.

8) Abolish or change the residency requirement for the federal courts

On the surface, I agree with this. It makes sense to have Supreme Court judges live in Ottawa. The court is in Ottawa. The Federal Court of Appeal and the Federal Court, however, each hold hearings in cities throughout Canada. It doesn’t make sense to require judges who oversee these hearings to live in the Ottawa area.

9) Assert more control over immigration for the economic benefit of Alberta

I’m not quite sure what this means. All immigration to Alberta will economically benefit Alberta. People who move to Alberta consume products and services. They buy food. They buy clothes. They buy gas. They live in houses, which must be built. They use schools, which must be built and staffed. They use clinics and hospitals, libraries and pools, roads and buses, all of which require jobs.

Increased consumption increases demand, which leads to increased production: more jobs. Immigration economically benefits Alberta. So I don’t understand how getting more control over immigration to Alberta will improve things economically for Alberta.

12) Work with other provinces to secure a federal-provincial agreement prohibiting the federal government from spending, taxing, legislating, or treaty making in areas of provincial or joint jurisdiction without the consent of the affected province(s)

The government is going to need to clarify this recommendation because right now, it reads as though Alberta wants veto power over treaties with Indigenous people. It can also read as treaties with other nations, as well, but without clarification, it’s difficult to know for sure.

18) Opt out of new federal cost-shared programs, subject to Alberta receiving full compensation

It’s not clear what Alberta means by “full compensation”. And I wonder how the Alberta government would react if, say, Lethbridge demanded full compensation for money its residents paid into provincial revenue through property taxes.

25) Explore ways and means to affirm Alberta’s cultural, economic, and political uniqueness in law and government policy

Alberta is culturally unique? In what way?

Recommendations where there’s support to conduct further analysis

These recommendations aren’t ready for implementation yet. The provincial government feels that they’d need more analysis and work before they could do these things.

7) Secure a fairer share of federal civil service opportunities and federal offices in Western Canada

I’m curious how the current set up is unfair and what a fairer share would look like. Which civil services should be available in Alberta directly but aren’t?

13) Develop a comprehensive plan to create an Alberta Pension Plan and withdraw from the Canada Pension Plan

I’m not sure what the benefit to this is. This increases Alberta’s expenses, which seems an odd action to take given that the current government is supposedly trying to reduce expenses. Ultimately, Alberta residents would still be paying into a public pension programme. Does the provincial government think that Alberta pensioners make less on the federal pension than other pensioners in the country?

This seem like just a way to exert autonomy and not a way to improve things for Albertans in any meaningful way.

14) Create an Alberta Police Service to replace the RCMP

Again, this is going to be more expensive. The RCMP are managed federally, which means the federal government shoulders much of the administrative cost. Plus, the federal government directly subsidizes the cost of RCMP services in Alberta to the tune of $112 million every year. A provincial police force will just increase costs. I don’t know how you can justify spending hundreds of millions—if not billions—more of Alberta taxpayer money on something we don’t actually need when you’re cutting health care, education, and postsecondary funding.

Recommendation needing modification to align with government platform or policy direction

These 3 recommendations don’t match campaign promises, so the provincial government wants to tweak them.

19) Resist federal intrusions into health and social programming, and don’t seek to exchange cash payments for tax points

The UCP promised during the campaign to exchange tax points for tax payments, so they plan to continue with this but will “scope and analyze the most effective approaches and timing”.

22) Don’t change the administration of agreements that Alberta public agencies and municipalities have with the federal government

The provincial government has no plans to change any existing agreements but are open to changes in the future.

23) Don’t change tax collection in Alberta at this time and support Quebec in its bid to collect the federal and provincial portions of personal income taxes and, if Quebec is successful, pursue the same strategy if it is advantageous.

The Alberta government is on board with this, but they’re also open to establishing a provincial tax collection agency.

So the short of it: Alberta must expand public services to manage many of these recommendations. That’s going to cost money. But if they keep reducing revenue by cutting corporate tax rates and eliminating the carbon tax, how are they going to pay for it all?

And will Alberta tax payers be better off having the province managing federally-managed services? Will such services improve?

Will it make any functional difference for Albertans to be pulled over by Alberta provincial police instead of the RCMP? Or if we have provincial pension taken off our paycheques instead of federal pension? Or if Alberta civil servants collect our income taxes instead of Ottawa civil servants? Or if the firearms officer managing the Canadian Firearms Program is paid by provincial tax dollars instead of federal tax dollars?

Are Albertans willing to pay higher taxes so that we can have more MPs in Alberta? Are they willing to pay to increase the number of provincial staff in Ottawa?

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By Kim Siever

Kim Siever is an independent queer journalist based in Lethbridge, Alberta. He writes daily news articles, focusing on politics and labour.

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