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.
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