'Cut the middle man': Alberta floats swapping equalization for more provincial tax-collecting
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The idea was put forward on Tuesday in an explanatory video posted to the website for the newly launched Alberta Next panel.
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The video proposed that the current fiscal arrangement in which Ottawa collects roughly 60 per cent of all tax revenues be flipped on its head.
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'What if we cut out the middleman and instead had provincial governments — that are responsible for delivering health care, education and social services — collect around 60 per cent of all taxes(?)' asked the narrator.
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The clip draws inspiration from an unlikely source, pointing to a fiscal decentralization scheme recently floated by Quebec.
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'Quebec has already proposed having the federal government let provinces keep GST revenue generated in their provinces in return for ending the federal health transfer … Why not apply that same logic to all federal transfers?'
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The three-minute video leads to an online survey on the equalization program geared to Alberta residents.
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The idea of swapping health transfers for GST revenue was one of 42 recommendations put forward to Quebec's government last fall by a special advisory committee on constitutional issues.
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Alberta currently receives more than $8 billion annually from Ottawa through major federal transfers.
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Alberta Premier Danielle Smith said shortly after April's federal election that she was no longer willing to 'subsidize' larger provinces like Ontario and Quebec through the federal equalization program.
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'That was never the intent of equalization, and it needs to end,' Smith said in an early May address to Albertans.
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Total equalization payments will reach a record $26.2 billion in the 2025-26 fiscal year, with Quebec taking home slightly more than half of this haul.
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Smith has recently called for the equalization program to be downsized and reconfigured to prioritize the needs of smaller provincial economies like Manitoba and the Maritime provinces.
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Alberta hasn't gotten an annual equalization payment since the 1964-65 fiscal year and, according to one recent study, has seen less than 0.02 per cent of all payments under the program since its inception in 1957.
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