Alberta gets a bum deal
Feds take from 'poor' to give to 'rich' like some perverse Robin Hood
By LICIA CORBELLA -- Calgary Sun January 5, 2003
 A girlfriend of mine who recently moved back to Ontario after living in Alberta for seven years says she is amazed by the hostility many "easterners" have against Albertans.

She finds herself constantly sticking up for us "greedy" Albertans, insisting that the vast majority of us have to work bloody hard for our money and that it doesn't just come gushing out of the ground and straight into our pockets.

As editor of the Calgary Sun, I receive an enormous amount of e-mails -- originating from all over the world as well as clear across this country.

While I'm very fond of saying that "I've never met a Newfoundlander or Maritimer I didn't like," the feeling, apparently, is not mutual, at least according to some of the e-mails I receive.

Even though I was born in Montreal, grew up in Vancouver and lived in Ontario, the second I obtained a permanent address in Calgary some nine years ago I became a wealthy, greedy, uncaring redneck, according to many non-Albertans.

Many easterners object to the fact that Alberta and Ontario are the only net contributors to the country's finances.

Mention that fact, along with the rightful urge of Albertans to have a larger voice within confederation and presto, we're pegged as being smug, greedy s.o.b.'s who don't like to share.

However, an Ontario economist's report proves that, in fact, if any kind of unfair economics (dare I say greed?) is going on, it's coming from the East and is directed at the West -- though Ontario is not immune.

The report, entitled, Where the Money Goes: The Distribution of Taxes and Benefits in Canada, was written by Finn Poschmann, the senior analyst with the Toronto-based think-tank, the C.D. Howe Institute.

"In a nutshell," writes Poschmann in his 1998 report, "poor people in richer provinces commonly subsidize the living standard of people who are better off but happen to live in poorer provinces."

"In Alberta, the average census family" writes Poschmann, "pays about $6,000 to the federal government, while in Nova Scotia, the average family receives $1,800.

"For example, families in New Brunswick with $50,000 to $60,000 in total income are net contributors of 7% of income, while those of the same income level in Alberta are net contributors of three times as much."

Sounds bloody greedy to me, but it's not the Albertans who are being greedy.

In short, there is a wide range among provinces, with the average family receiving $1,700 in New Brunswick, for example, but paying out $2,700 in Saskatchewan.

Likewise, the average gain in Newfoundland is almost $7,000, but Alberta families pay out more than $6,000.

That would be just fine if those families in Newfoundland were much needier than the ones in Alberta, but even those who are much better off than your average Albertan are the recipients of these equalization payments.

In their 1999 report Simply Sharing: An Interprovincial Equalization Scheme for Canada, Paul Boothe and Derek Hermanutz refer to Poschmann's study and conclude that, "while an Alberta family with income of $30,000 to $40,000 contributes 9% of it, or about $3,150, a Newfoundland family with income of more than $100,000 receives benefits equal to 1.2% or $1,200."

The feds take from the "poor" to give to the "rich" -- a perverse reverse Robin Hood. The examples continue.

For example, an Ontario family with income of $30,000 to $40,000 contribute an amount equal to 2.8% of that income, or about $980, to the transfer system, while a family with a similar income in Prince Edward Island receives an amount equal to 19.8%, or about $7,000.

Most Canadians -- certainly this one -- have no problem with the idea of the haves sharing with the have-nots.

The Constitution Act of 1982 states Canadians: "... are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public service at reasonably comparable levels of taxation."

It's a good idea, but as Boothe and Hermanutz write: Academics have known for some time that the operation of transfer schemes that improve the distribution of income among governments can worsen its distribution among individuals.

Why someone in Newfoundland with a family income of $100,000 should get benefits from an Alberta family with an income of $30,000 is beyond me.

Add to all of this the fact that the West is under-represented politically in Ottawa and that Ottawa, despite promises to the contrary, refuses to address the issue and the unfairness compounds.

For instance, all western provinces get six Senate seats each. Alberta has a population of three million.

Nova Scotia, with a population of 940,000, has 10 Senate seats. That's just plain wrong.

What's more, the fiscal health of this province was largely borne on the backs of Albertans who demanded their government cut spending, leading the way for the rest of the country.

Hospitals were blown up and government cut spending by 25%. Albertans suffered but didn't complain much because we knew it would be short-term pain for long-term gain.

Our provincial government surpluses didn't just flow from oil wells -- though it helped, to be sure.

So, I'm going to e-mail this column to my friend in Windsor and tell her to quote from it at will anytime she hears a slur against us filthy rich, greedy Albertans.