July 19th, 2018

False beliefs on equalization payments put forward as facts

By Letter to the Editor on April 6, 2018.

Re: “Demanding equality for Alberta,” March 5

John MacLaren’s letter decried the federal equalization payments to provinces. He stated the federal government “collects taxes from Alberta and distributes those taxes to the so-called ‘have-not provinces'” and that this “absolutely screws Alberta.” This is wrong.

Alberta pays no tax to the federal government, nor does any other province. Since 1867, our Constitution has prohibited either level of government from taxing the other. It is Albertans, not the province, who pay taxes to the federal government, and they pay tax (income tax) based on how much money they earn, not based on the province in which they live.

Trevor Tombe, a University of Calgary economics professor, had some useful information about this subject in the Globe and Mail of Oct. 21, 2017. He used information from the last census. It showed that one in eight Albertans over 15 years old earns more than $100,000 per year. Also, although Alberta has only 11 per cent of Canada’s population, it is home to 21 per cent of those Canadians earning more than $100,000 per year. Albertans, as a group, pay more income tax because Albertans, as a group, earn ore money. If the 21 per cent of Canadians earning more than $100,000 per year lived in Nova Scotia, they would pay more income tax because of the amount they earn, not because off where they live.

My guess is that Albertans as a group pay more GST because, as a group, they earn more money and in economics, Parkinson’s law says that as one earns more one spends more.

Prof. Tombe also points out alberta has the smallest proportional share of Canadians over 65 years of age and therefore proportionally fewer CPP and OAS payments go to Albertans.

The federal government makes equalization payments to the provinces from its general revenue, which includes tax revenue. There are no transfers of massive sums of money form Alberta to Quebec or any other province.

Mr. MacLaren’s letter is an example of false beliefs put forward as facts. Beliefs are to facts and histrionics never prove anything because they are simply so much noise.

Gregory Cote

Irvine, Alta.

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One Response to “False beliefs on equalization payments put forward as facts”

  1. Fedup Conservative says:

    Gregory has nailed it. That’s exactly what equalization is all about and as those of us from the world of finance know it was Ralph Klein who created this lie. He told reporters that Alberta was broke and Norway and Alaska weren’t because we have had to pay billions to Ottawa and Quebec in equalization payments. Alberta has never paid one penny in equalization, these Reform Party boys are still feeding their supporters this lie and they are believing it. We do still get money from this program in the form of health care funding, infrastructure development etc. but it’s not why we are broke, slashing royalties and taxes , and with privatization is why we are broke, and Norway and Alaska aren’t.

    By privatizing liquor stores the Alberta Government lost the $70 million per year in profits it brought in that was used to help pay for health care and education costs. The costs to the public went up 50% in a very short time. Privatization of vehicle registration lost them millions more and the cost to the public went from $35. to $85., per vehicle the highest in Canada. Privatizing the issuing of drivers licences cost them millions more and gave us the highest number of injury accidents per capita in Canada, just like police officers warned us it would. People who shouldn’t get licences will get them was their concern. They privatized road maintenance and we were told the cost to taxpayers went up 300% . The list goes on and on. Then there is the fact that thousands of government workers lost their jobs when none of it was necessary. I will never forget the nurses bawling their eyes out in my office. This never happened anywhere else in Canada, so why did we let it happen here?

    With their revenue cutting stupidity they made it so it was impossible for the government to operate properly without creating huge debts, so they closed hospitals , closed 1,500 hospital beds and cut 5,000 nursing positions and slashed education funding creating over crowed classrooms, and high school fees. While Klein fed us the lie that he was making things a lot better. He then dumped deregulation upon us telling us that it would make our power bills a lot cheaper, which electrical engineers and my late father a power plant engineer stated was another lie. Not only did it give us the highest power bills in Canada, we are still paying the second highest next to Ontario, we were told we have been paying the eighth highest in North America.

    It isn’t hard to understand why we are in this financial mess and it was the gullible Albertans believing the lies that put us there and sadly they are still doing it. Some how they think Jason Kenney is going to save them when he is promising to make things a lot worse.and believe it or not the people who are believing it are our fellow seniors who should be a lot smarter, but apparently aren’t.


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