Like father, like son.
Nearly 40 years ago, in February 1980, Pierre Trudeau won a majority government with two seats in western Canada and none west of Manitoba. A year later the Trudeau Liberals unveiled the infamous National Energy Program (NEP). Thus began the modern era of Alberta alienation. To this day the NEP retains mythic status in Alberta as the example of a central Canadian project inimical to Alberta’s economic interests.
In October Pierre Trudeau’s son Justin was re-elected with a minority government with no seats in the Prairies. As in the early 1980s, oil and gas is the flashpoint between Ottawa and Alberta. Now as then, figuring out how to provide westerners with power in a government in which they have no elected representation is a major preoccupation in Ottawa.
More than a generation ago, Pierre Trudeau opted for a conventional approach to this dilemma. He appointed a number of senators from the West into his cabinet as ministers and ministers of state, to represent the interests of those provinces lacking Liberal MPs.
Some suggest Justin Trudeau should do likewise today and bring an Alberta senator into his cabinet. There are various reasons why this approach either won’t work or won’t suffice this time around. Chief among them is Trudeau’s Senate policy, which is founded upon nonpartisanship in the upper chamber, with no Liberal Senate caucus and no senators in the cabinet.
Noting this blockage, others have suggested more radical moves, such as appointing to cabinet an Albertan who is not in either parliamentary chamber or convincing an opposition MP from Alberta to cross the floor and join the Liberal caucus and cabinet. The former lacks even the veneer of democratic legitimacy, though it is constitutionally valid. The latter is perhaps worse, though there is recent precedent for it. Days after the 2006 general election, Stephen Harper convinced a Liberal MP, David Emerson, to join his Conservative cabinet. It was a move that produced nothing but recrimination.
The focus in these matters always rests on personalities and signals. It’s invariably about which person will send the right message to a particular province or region’s citizens to convince them that they will be heard in Ottawa.
More is needed this time around. Trudeau should make a substantive policy concession to Alberta.
The starting point could be the creation of an Alberta Economic Development Agency, as distinct from Western Diversification, the existing federal agency that covers all of western Canada. Western Diversification is mandated to support economic diversification but also acts as an important advocate for regional interests in Ottawa, both within the bureaucracy and, usually, through a responsible minister at the cabinet table. When regional development agencies were created in the late 1980s, the intent was for them to focus on “have-not” regions. But times have changed. If Ontario and Quebec, with the first- and second-largest gross domestic products respectively among the provinces, can have their own federal agencies for economic development, so should Alberta, which has the third-largest GDP — not to mention the biggest economic adjustment challenge of any province if Canada is to move down the path to the decarbonization of its economy.
The Alberta agency should be headquartered in Calgary, the heart of the province’s business community. It should have a board of directors made up of eminent Albertans. Its deputy minister should be a well-respected official who has worked at the senior levels of the Alberta government. And it should have sufficient funds — say, $500 million a year — to make an impact on the ground in that province. Through its advocacy role with other departments in Ottawa, the agency could bring a distinct Alberta voice to many important issues, at various levels of discussion and decision-making.
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In the interim — until the Liberals can elect someone in Alberta — one of the Liberal MPs from either Manitoba or perhaps the Territories could be an acceptable cabinet minister.
Next to pipelines, the thing Alberta Premier Jason Kenney seems to want most is a concession on Equalization, the program that redistributes $19 billion in federal revenue from richer to relatively poorer provinces, to ensure comparable levels of public services can be delivered across the country.
Kenney claims Equalization has become unfair to Alberta. He sees the program as transferring revenue from Alberta taxpayers to governments in other provinces. Quebec is a particular irritant for Kenney because the province receives the largest dollar amount of Equalization and is opposed to pipelines, thus frustrating Alberta’s efforts to get its oil and gas to markets. Kenney has promised to hold a referendum on Equalization if the program is not changed to reduce the unfairness he perceives in its design.
One change Kenney seems to want is the exclusion of non-renewable-resource revenues from the formula used to calculate Equalization. Saskatchewan, too, has raised issues around how Equalization is calculated, as has Ontario. Perhaps the bigger issue with the program, however, is a rule established in 2009 — by the Harper government, of which Kenney was a senior minister — that links the growth rate of the transfer to nominal GDP. The differences in fiscal capacities among the provinces have narrowed since that time, yet this escalator has pushed up overall program costs from about $14 billion in 2009 to nearly $19 billion this year. A case can therefore be made that the escalator should be changed to reduce the growth rate of this implicit transfer from “have” provinces like Alberta to “have not” provinces like Quebec.
A rule that made sense a decade ago, when Canada was in recession, might not make as much sense today. Finance Canada recently completed a review of Equalization but the government refused to make any substantive changes to the formula. Nevertheless, Trudeau should consider putting Equalization on the agenda of the next First Ministers’ Meeting to try to resolve some of these long-standing frictions and forge a stronger consensus on this key instrument of fiscal federalism. Equalization is a concept enshrined in the Constitution, but for Alberta, it could become the new NEP if not managed well.
The big difference between 1980 and today is that Alberta is a much larger player in the Canadian economy and in our national life than it was then. The province therefore needs real voice and power in Ottawa today, as Ontario and Quebec have. What’s more, Ottawa needs to be on the ground in Alberta in a way it hasn’t been before, and it must be seen by Albertans to be making policy changes in Alberta’s interests. It will take at least that much to contain Alberta alienation after this election outcome.
Note: This article has been corrected to reflect that Pierre Trudeau appointed multiple senators from the West to his cabinet.
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