LennyR
Active VIP Member
Alberta is a province, not a country. Ergo, we don’t get to keep all the wealth we generate in this province. Not even close.
I realize this runs counter to the preferred narrative in Canada, where politicians and media types insist Alberta either “put all its eggs in one basket” by failing to diversify its economy (hello Christy Clark), or that Albertans “spent like drunken sailors” during boom times.
Sure, there’s some truth to those arguments. But the far bigger reason why Alberta isn’t rolling in filthy lucre is that we are part of a federation called Canada.
Ergo, most of our tax revenues go to Ottawa, and are then redistributed to fund a vast array of social, health and educational programs in Quebec, the Maritimes and the rest of Canada. The federal equalization program alone, under which Quebec receives nearly $10 billion a year, is just part of that wealth transfer.
When economists say Alberta has been Canada’s key engine of growth in recent decades, that’s really what they mean. Without Alberta’s energy wealth, this country would have been a fiscal basket case long ago. Now that Alberta’s oil-fired economy is also struggling, Canada is heading for the fiscal swamp.
So just how much money has flowed out of Alberta to Ottawa? A lot. Between 2000 and 2014, on a net basis, Alberta’s individual and corporate taxpayers shipped an estimated $200 billion-plus to the federal government. That’s what left the province, less what the feds reinvested here.
To put that lofty figure in perspective, it’s nearly 12 times the value of the $17.4 billion Alberta Heritage Savings Trust Fund. No other province — including Ontario, with three times Alberta’s population — even comes close to matching this province’s contribution to the federation.
During Alberta’s boom years, back in 2007 and 2008, the province’s taxpayers shipped more than $20 billion annually, on a net basis, to Ottawa. And when oil prices returned to triple-digit levels after the 2008-2009 recession, the cash gusher from this province returned. In 2011, for instance, it reached nearly $19 billion.
Even more remarkable, few Canadians seem to be aware of this, except in the vaguest sense. Conspicuously, I’ve never seen these numbers reported in the national media or disclosed by federal and provincial politicians.
And after calling not one but four leading public policy think tanks, I couldn’t find a single expert who has researched this data, or who was willing to discuss it at any length. Some seemed downright defensive about it, as if it was “un-Canadian” to explicitly acknowledge one province’s outsized contribution to the federation.
The only reason I’m now aware of the massive amount of money that has flowed out of Alberta in recent years is due to the efforts of one man. Fred McDougall, 78, is a former deputy minister of forestry who served under former Alberta Premier Don Getty in the 1980s.
After leaving the provincial civil service in 1989, McDougall was recruited by Weyerhaeuser, the U.S.-based forest products giant, to run the company’s Alberta operations. After working for Weyerhaeuser for 12 years, McDougall retired in 2007, although he did part-time consulting work for several years after that.
Just to be clear, McDougall isn’t an activist, an axe grinder or even a member of any political party. He’s just a thoughtful, straight-shooting Albertan who wanted to know for his own edification what Alberta’s financial contributions to Ottawa amounted to over the past 15 years or so.
He knew it was big, but after spending considerable hours crunching the relevant numbers from Statistics Canada, and comparing that data with stats compiled by Alberta Finance, he admits he was shocked by the scale of what he found.
“My main motivation in doing this was to see what the magnitude of it was and to get some accurate numbers,” he says. “I wanted to see quite simply how much money has been going out of Alberta and being allocated by the federal government to other provinces.”
McDougall was also motivated by the fact that other provinces, which have benefited immensely from Alberta’s energy wealth, are now explicitly or implicitly opposing new oil export pipelines, thus jeopardizing Canada’s economic future.
“Other provinces have basically been trying to extort benefits out of pipelines going through their province. To a certain degree I can understand that, but when it gets to the point where they are as bellicose as (Montreal mayor) Denis Coderre has been, I just find it sickening,” he says.
“I’m really disappointed as a Canadian that we’ve got a federation that tolerates this kind of thing. I mean we’re talking about staggering amounts of money here, so maybe other provinces have to share a bit of inconvenience and a bit of environmental risk. But they’ve been directly benefiting from Alberta’s economy for years.”
I couldn’t have said it better myself, Fred. Too bad the rest of Canada seems determined to look the other way in Alberta’s hour of need.
I realize this runs counter to the preferred narrative in Canada, where politicians and media types insist Alberta either “put all its eggs in one basket” by failing to diversify its economy (hello Christy Clark), or that Albertans “spent like drunken sailors” during boom times.
Sure, there’s some truth to those arguments. But the far bigger reason why Alberta isn’t rolling in filthy lucre is that we are part of a federation called Canada.
Ergo, most of our tax revenues go to Ottawa, and are then redistributed to fund a vast array of social, health and educational programs in Quebec, the Maritimes and the rest of Canada. The federal equalization program alone, under which Quebec receives nearly $10 billion a year, is just part of that wealth transfer.
When economists say Alberta has been Canada’s key engine of growth in recent decades, that’s really what they mean. Without Alberta’s energy wealth, this country would have been a fiscal basket case long ago. Now that Alberta’s oil-fired economy is also struggling, Canada is heading for the fiscal swamp.
So just how much money has flowed out of Alberta to Ottawa? A lot. Between 2000 and 2014, on a net basis, Alberta’s individual and corporate taxpayers shipped an estimated $200 billion-plus to the federal government. That’s what left the province, less what the feds reinvested here.
To put that lofty figure in perspective, it’s nearly 12 times the value of the $17.4 billion Alberta Heritage Savings Trust Fund. No other province — including Ontario, with three times Alberta’s population — even comes close to matching this province’s contribution to the federation.
During Alberta’s boom years, back in 2007 and 2008, the province’s taxpayers shipped more than $20 billion annually, on a net basis, to Ottawa. And when oil prices returned to triple-digit levels after the 2008-2009 recession, the cash gusher from this province returned. In 2011, for instance, it reached nearly $19 billion.
Even more remarkable, few Canadians seem to be aware of this, except in the vaguest sense. Conspicuously, I’ve never seen these numbers reported in the national media or disclosed by federal and provincial politicians.
And after calling not one but four leading public policy think tanks, I couldn’t find a single expert who has researched this data, or who was willing to discuss it at any length. Some seemed downright defensive about it, as if it was “un-Canadian” to explicitly acknowledge one province’s outsized contribution to the federation.
The only reason I’m now aware of the massive amount of money that has flowed out of Alberta in recent years is due to the efforts of one man. Fred McDougall, 78, is a former deputy minister of forestry who served under former Alberta Premier Don Getty in the 1980s.
After leaving the provincial civil service in 1989, McDougall was recruited by Weyerhaeuser, the U.S.-based forest products giant, to run the company’s Alberta operations. After working for Weyerhaeuser for 12 years, McDougall retired in 2007, although he did part-time consulting work for several years after that.
Just to be clear, McDougall isn’t an activist, an axe grinder or even a member of any political party. He’s just a thoughtful, straight-shooting Albertan who wanted to know for his own edification what Alberta’s financial contributions to Ottawa amounted to over the past 15 years or so.
He knew it was big, but after spending considerable hours crunching the relevant numbers from Statistics Canada, and comparing that data with stats compiled by Alberta Finance, he admits he was shocked by the scale of what he found.
“My main motivation in doing this was to see what the magnitude of it was and to get some accurate numbers,” he says. “I wanted to see quite simply how much money has been going out of Alberta and being allocated by the federal government to other provinces.”
McDougall was also motivated by the fact that other provinces, which have benefited immensely from Alberta’s energy wealth, are now explicitly or implicitly opposing new oil export pipelines, thus jeopardizing Canada’s economic future.
“Other provinces have basically been trying to extort benefits out of pipelines going through their province. To a certain degree I can understand that, but when it gets to the point where they are as bellicose as (Montreal mayor) Denis Coderre has been, I just find it sickening,” he says.
“I’m really disappointed as a Canadian that we’ve got a federation that tolerates this kind of thing. I mean we’re talking about staggering amounts of money here, so maybe other provinces have to share a bit of inconvenience and a bit of environmental risk. But they’ve been directly benefiting from Alberta’s economy for years.”
I couldn’t have said it better myself, Fred. Too bad the rest of Canada seems determined to look the other way in Alberta’s hour of need.
