Latest news with #fiscaldecentralization

National Post

'Cut the middle man': Alberta floats swapping equalization for more provincial tax-collecting

OTTAWA — Alberta is pitching that provinces collect more tax dollars and Ottawa less, in its latest volley against the federal equalization program. Article content The idea was put forward on Tuesday in an explanatory video posted to the website for the newly launched Alberta Next panel. Article content Article content 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. Article content '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. Article content The clip draws inspiration from an unlikely source, pointing to a fiscal decentralization scheme recently floated by Quebec. Article content '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?' Article content The three-minute video leads to an online survey on the equalization program geared to Alberta residents. Article content 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. Article content Alberta currently receives more than $8 billion annually from Ottawa through major federal transfers. Article content 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. Article content 'That was never the intent of equalization, and it needs to end,' Smith said in an early May address to Albertans. Article content 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. Article content 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. Article content 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.