Quebec benefits directly from the Alberta oil industry — in fact, roughly 44 per cent of the province’s oil comes from western Canada. Asked about this on CBC’s Power & Politics on Wednesday, Blanchet said Quebec’s “needs are fulfilled” and has no reason to support further pipeline development. “Our responsibility is to consume less and less oil, not more and more,” he said. “Therefore, there is no reason for Quebec to support being simply a territory that you cross in order to increase the exportations of Canadian oil to wherever they want.”
But when it comes to equalization, the link between Quebec and the Alberta oil sands is much more tenuous than Kenney is suggesting, economists say. “There’s a fundamental misunderstanding here. That is not Alberta’s money,” said Michael Smart, an economist at the University of Toronto. “Mr. Kenney understands that and he should start being honest about it.”
The federal equalization program transfers general revenue to lower-income provinces so that all Canadians receive comparable public services, regardless of where they live. Trevor Tombe, an economist at the University of Calgary, said Alberta’s oil industry benefits Quebec only to the extent that increased economic activity contributes to federal revenue through corporate income taxes. “It’s a very indirect channel,” he said. “There isn’t any actual sharing of resource royalty revenues.”
Smart said that rich Canadians, no matter where they live, pay more in taxes that can be distributed through equalization, a point Tombe also made in an op-ed for the Globe and Mail in 2018. “So it’s not that Alberta pays more: high-income individuals do, regardless of where they live, and Alberta just happens to be home to a large number of them,” he wrote.
André Lecours, a political scientist at the University of Ottawa, said even if resource revenue were left out of the calculation entirely, nothing would change for Alberta, and equalization payments for Quebec could even increase. “Oil is a small part of the story, I guess,” he said.
And while it is true that Quebec receives two thirds of the federal equalization transfer, that’s only because its population is much larger than any other province that receives equalization payments, Lecours said. On a per capita basis, provinces like Prince Edward Island receive much more.
Provinces receiving equalization payouts for 2019 – 2020
- Prince Edward Island
- Nova Scotia
- New Brunswick
Provinces that will NOT:
- Newfoundland and Labrador
- British Columbia
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