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Old 05-11-2005, 07:54 AM   #17
GKDarts
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I managed to find some "Mansellian" history on the topic. This is circa 1994:

The Cost of Confederation
30-Year Sapping of Alberta - $165 billion calculated as excess payments — economist
This extremely important article was written by Allen Panzeri of the Edmonton Journal, and appeared in the Wednesday, July 20, 1994 edition of the Edmonton Journal on page A5.
Alberta contributed $165 billion more to Ottawa than it received over the past 30 years, says a University of Calgary economist.

That nearly matches the extra benefit Quebec has received from Ottawa from 1961 until 1991, said Bob Mansell, who has studied and charted transfer payments to and from Ottawa.

The sum, although huge, reflects the political reality of Canada: Alberta lacks effective representation at the federal level to protect its interests, he said Tuesday.

Over that period, Alberta has been the only net contributor — though its per capital income is less than in Ontario and British Columbia.

The provincial government has often raised fears of another National Energy Program. Mansell, who estimates that program accounts for $70 billion of the $165 billion in excess contributions, said those fears could be justified.

"Where does the federal government go if it needs more money? To Central Canada? No, because of the population base. So they'll go to Alberta.

"There's a real danger unless this is corrected."

A number of factors account for the remaining $95 billion in excess contributions, say Mansell and Liberal MLA Mike Percy:

This province has a relatively low unemployment rate, meaning it doesn't get a big transfer in unemployment insurance.
Federal offices and purchases of goods and services are low here compared with Ontario and Quebec.
Federal expenditures are handed out as political favors, meaning they'll more often go to the heavily-populated areas than to the West.
Transfer payments to the so-called "have" provinces — Alberta, British Columbia and Ontario — are lower than to the "have-not" provinces and some of these payments are also capped at a certain limit.
Alberta's main industries — agriculture and energy — are capital intensive and thus subject to the federal capital tax.
The province has a richer personal tax base that's fuelled by the youngest and best-educated workforce in Canada. Per capital, Alberta also has the highest participation in the workforce.
Mansell dismissed figures cited in a recent Canadian Tax Journal article showing Alberta contributed $32.9 billion more than it received between 1977 and 1992. They're only rough figures from Statistics Canada that don't include the necessary adjustments, such as the cost to Alberta of the National energy Program.

But factoring in those adjustments doesn't make the picture any better, he said.

"What it means is that the situation is far worse than it seems from Alberta's point of view. It has been by far the largest net contributor on a per capita basis."

According to Mansell's figures, in 1992 Alberta contributed $4.1 billion more than it received, while Ontario contributed $3.6 billion more than it received.

While it isn't unfair that Alberta should be a net contributor, since it has a strong economy, the province should ask why it isn't being treated fair relative to other provinces, Mansell said.

"When we boom, we should pay in and when we bust, we should take out.

"In the case of Alberta, it's been a one-way street. It should be an insurance policy, but it isn't. Why should Alberta be the biggest net contributor when it isn't the highest income province?"

Those sentiments were echoed by Percy, who raised the Canadian Tax Journal figures to demonstrate the system is "not as sensitive to the unique features of Alberta as it should be."

For example, when oil prices dropped in the 1980s, Alberta should have received more than it contributed.

"If you look at it as an insurance policy, it would be nice to think you can draw down on it, " Percy said.

The MLA said he wasn't raising the figures in an effort to bash Eastern Canada, but to show they indicate the system could be fairer.

Premier Ralph Klein said the system is as fair as it can be and it's no surprise Alberta contributes more than it receives.

"It just shows we're willing to do our fair share for Confederation," he said Tuesday. "I just hope we're not punished unfairly for being generous and prudent."

Mansell said that for Alberta, the transfer-payment system is nearly at the breaking point. If it weren't giving $4 billion a year more to the federal government than it should, the province wouldn't have a deficit.

"The point comes where they're taking so much away from me to give to you, or vice-versa, that the net contributor is going to revolt."
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