{"id":269801,"date":"2021-10-13T10:30:23","date_gmt":"2021-10-13T14:30:23","guid":{"rendered":"https:\/\/policyoptions.irpp.org\/issues\/alberta-quebec-and-the-politics-of-equalization\/"},"modified":"2025-10-07T23:42:29","modified_gmt":"2025-10-08T03:42:29","slug":"alberta-quebec-and-the-politics-of-equalization","status":"publish","type":"issues","link":"https:\/\/policyoptions.irpp.org\/fr\/2021\/10\/alberta-quebec-and-the-politics-of-equalization\/","title":{"rendered":"Alberta, Quebec, and the politics of equalization"},"content":{"rendered":"

On Oct. 18, 2021<\/a>, Alberta is holding two referendums along with municipal and Senate elections. One focuses on the federal equalization program. Albertans will be asked: “Should Section 36(2) of the Constitution Act, 1982<\/em> \u2013 Parliament and the Government of Canada\u2019s commitment to the principle of making equalization payments \u00ad\u2013 be removed from the Constitution<\/em>?” Created in 1957, the federal equalization program transfers a total of almost $21 billion<\/a> to five provinces whose fiscal capacity (calculated as the revenue that each province could generate at a given and hypothetical rate of taxation) falls below the national average. Currently, these provinces are Manitoba, Quebec, New Brunswick, Nova Scotia and Prince Edward Island.<\/p>\n

This has been an issue of longstanding resentment in some nonrecipient provinces, but it\u2019s one that could be ameliorated in part by reforming the governance structure of the equalization program to depoliticize it. Removing decisions about equalization from executive discretion \u2013 in other words, away from the internal workings of the governing party in Ottawa \u2013 may diminish the potential for political conflict inherent to the program.<\/p>\n

The federal government\u2019s commitment to making equalization payments has been enshrined in the Constitution<\/em> since 1982, and the program has been controversial since its inception. This is particularly evident in Alberta, a nonrecipient province since the early 1960s because of its oil wealth. Following the dramatic drop in oil prices in 2014 and the subsequent deterioration of the province\u2019s economic and fiscal situation, along with the victories of Justin Trudeau’s Liberals in 2015, 2019 and 2021 \u2500 the formation of a United Conservative Party (UCP) government led by Jason Kenney in 2019 has once again made equalization a major political target<\/a> in Alberta.<\/p>\n

The argument against equalization is that it serves to redistribute Alberta\u2019s riches \u2500 even at a time when the province\u2019s economy is reeling \u2500 to other provinces, some of which oppose the further development of pipelines<\/a> (which the Alberta government deems crucial to the economic development of the province).<\/p>\n

Figure 1 below shows that, while more than 80 per cent of Canadians support the equalization program, the recent politicization of the program in Alberta (and in Saskatchewan) has been associated with a decline of support for equalization in the last decade or so. Outside of these two provinces, opposition and support for equalization has remained quite stable since 2001, even in nonrecipient provinces such as Ontario and British Columbia.<\/p>\n