Alberta Politics Thread v2

[Weitz]

Originally Posted by GGG

Do you object to the concept of equalization in general that people throughout Canada should be able to access similar levels of service for similar levels of taxation.

Or do you object to the optics of the situation where they are blocking our economic well being while taking “our money”

It’s the combination of both. Why should you get one without supporting the other? It’s hypocritical and pathetic and over the next few years is going to do some real damage to this “country”.

[Fuzz]

Originally Posted by CaptainCrunch

We are currently running a multi year deficit, currently have very high unemployment and we're trapped by two provinces from getting our product to tide water.

Forgive me for thinking that the system is broken when we're giving money away to a province that doesn't really need it and has been living on it for too long.


Equalization was designed to ensure that provinces has a proper level of social services and programs, Quebec has used it as a constant revenue source.

I'm not advocating this as a solution, but if we had the same sales tax and income taxes as Quebec, wouldn't our budget be balanced like theirs?

[CaptainCrunch]

Originally Posted by GGG

I can’t help it if that’s the extent of your argument. You have argued that Quebec has nice things therefore shiukdnt get equalization. It speaks to a profound misunderstanding of how equalization works.

Thanks I have a good understanding of how equalization works, or in this case how the formula doesn't work. I don't need a snark lecture from you and it goes beyond your simplification of "OMG you're angry that Quebec has nice things".

Lets just agree to disagree.

[CaptainCrunch]

Originally Posted by Fuzz

I'm not advocating this as a solution, but if we had the same sales tax and income taxes as Quebec, wouldn't our budget be balanced like theirs?

honestly don't believe that its that simplified.

I've said that the smartest move would be to replace the Carbon Tax with a straight forward transparent sales tax.


But you can't argue with the economic harm that's been caused by this pipeline fiasco, that would have more then likely driven us into deficit. Put that in combination with poor spending habits by the previous conservative governments and the current NDP government.

[Roughneck]

Originally Posted by CaptainCrunch

Great then lets follow their lead, lets cut all government salaries and change our tax rates. But that doesn't change that the equalization formula is not working when a province running a surplus and a economy that's not in jeopardy is getting a 10% increase in the money they're receiving, and receiving 2/3rds of the pot.

Whether or not a province is running a surplus or a deficit shouldn't really be a consideration in the formula as it can simultaneously punish provinces for being fiscally prudent (slashing services, raising taxes, attempting to use surpluses to pay down debt) and encourage others to spend recklessly. Which is why it is ignored. Alberta could institute a 5% sales tax, still the lowest in the country to maintain 'the Alberta advantage' and solve a major part of the balance sheet problem, so why don't we just do that before complaining other places have things better because of equalization?

Similarly, what metrics are used to judge economic health?

Alberta you'd consider in jeopardy because our unemployment rate is high, and Quebec's not because theirs is low? We have the highest employment and participation rate in the country, the latter helping to contribute to the higher unemployment. And the people who are employed get some high wages compared to the rest of the country. So looking at stuff like that, in a province with low income taxes and not much urgency to change them, and no sales tax and no urgency to change it, why would people believe things are as bad as we say? 'Just because things aren't in a boom doesn't mean they're bad. Things are still better than in most of Ontario or Quebec or virtually all of Atlantic Canada.'

So I guess my point is if we're going to go into negotiations, what are we negotiating for? 'A more fair formula' means what, exactly? Okay, adjust the hydro rates to put everybody on the same page that way, but what does that really affect? What if that barely shifts the needle, everybody is treated equally and it's still basically the same because there aren't many ways to make Alberta's position look objectively worse than the rest of the country? Will that satiate the mob?

Is the end game a 'more fair formula even if it means things don't really change that much' or is the end goal '#### Quebec'? Until the outcome is clearly defined, we can't really expect to have any leverage in negotiations we definitely can't just drag the feds into.

[PepsiFree]

Originally Posted by redforever

The irritant with equalization payments is that all provinces don't play by the same rules.

Don’t get me wrong, they irritate me too for a number of reasons. They’re just another thing that someone else is doing that if only they didn’t do that everything would be great, which is why I don’t really like that the payments draw so much attention.

It’s great that Kenney wants to scrap the carbon tax and hold a referendum on equalisation payments, it’s great that Notley wants to get new pipelines built, but wake me up when either of them have the balls to focus on the main issue: the way we (Alberta) collect and distribute our wealth is fundamentally flawed. Someone, somewhere, give enough of a #### to do something about that, then i’ll start handing out a little more credit.

Right now this province and our politicians are just dogs chasing a bone into traffic.

[redforever]

Originally Posted by GGG

They have made different choices in how they spend their money. We could make the same choices and be running surpluses. So maybe equalization isn’t the problem it’s made out to be.

Equalization measures fiscal capacity independent of tax rates as it should be.

They have made different choices in how they submit their resource revenue to the equalization fund and have not been penalized for it.

[PepsiFree]

Originally Posted by redforever

They have made different choices in how they submit their resource revenue to the equalization fund and have not been penalized for it.

Do you have a link to this? I don’t know the details.

[redforever]

Originally Posted by PepsiFree

Do you have a link to this? I don’t know the details.

It's in a previous post that I made, #1193

https://nationalpost.com/opinion/pet...ollars-at-work

[GGG]

Originally Posted by redforever

They have made different choices in how they submit their resource revenue to the equalization fund and have not been penalized for it.

It’s not how they report it, it’s that they don’t charge market rates to their residents. The artificially low power costs represents roughly 1/3 of equalization for Quebec and should be fixed.

However I suspect that this conversation still happens if Quebec gets 5 billion instead of 7.

[redforever]

Originally Posted by GGG

It’s not how they report it, it’s that they don’t charge market rates to their residents. The artificially low power costs represents roughly 1/3 of equalization for Quebec and should be fixed.

However I suspect that this conversation still happens if Quebec gets 5 billion instead of 7.

Yes, I realize that, never worded or explained it properly I guess.

And yes, it should be fixed. Manitoba followed suit for their hydro revenues as well...not sure how much that amounts to compared to Quebec.

[GGG]

Originally Posted by redforever

Yes, I realize that, never worded or explained it properly I guess.

And yes, it should be fixed. Manitoba followed suit for their hydro revenues as well...not sure how much that amounts to compared to Quebec.

I’ve never seen the numbers pulled for Manitoba either. It should have a similar affect though as queb MRC in terms of dollars per person.

[opendoor]

Aren't only 50% of non-renewable resource revenues counted as part of the equalization formula? If Hydro revenues need to calculated based on market value rather than actual revenue, then what about oil + gas?

[redforever]

Originally Posted by opendoor

Aren't only 50% of non-renewable resource revenues counted as part of the equalization formula? If Hydro revenues need to calculated based on market value rather than actual revenue, then what about oil + gas?

Yes, that is what we are saying. AB and most other provinces contribute 50% of revenues from oil and gas and other resources.

However, Quebec and Manitoba do not contribute 50% off their revenues from hydro. They discount it and only contribute 50% of the discounted revenues. That is not fair, it is not per the equalization formula, and those provinces should be penalized.

By the way, the fiscal capacity of the provinces is determined by measuring their revenue from five general sources. Those revenue categories are:

Personal income taxes
Business income taxes
Consumption taxes
Up to 50 percent of natural resource revenue
Property taxes and miscellaneous

[Frequitude]

So a PST results in less equalization payments for that province?

[Ozy_Flame]

Originally Posted by Frequitude

So a PST results in less equalization payments for that province?

If you look at how equalization works, the higher the taxes in a province, the less you pay in equalization.

[GGG]

Originally Posted by Frequitude

So a PST results in less equalization payments for that province?

No it’s the potential amount of taxes that could be generated. They pick a benchmark tax rate and use that benchmark rate to assess the income from each province that would be generated if taxation occurred at that rate.

[CaptainCrunch]

More then a 1000 protesters by city hall today.

[Locke]

Originally Posted by CaptainCrunch

More then a 1000 protesters by city hall today.

Are they going to send an invoice for the costs of their placard-paper and sharpies to the BC Government?

[Cheese]

At the core of the calculation is the difference between two numbers. Letting E
denote a provincial government’s equalization entitlement per capita, it is calculated as:
(1)
E = S - F
where
S
(the standard) is the estimated potential revenue a group of reference provinces could
raise if they applied a set of given (or “standard”) tax rates to specified revenue sources
within provincial jurisdiction; and
F
(the province’s fiscal capacity) is the estimated potential revenue the provincial
government could raise if it imposed the same set of standard tax rates to the same
specified revenue sources within its jurisdiction;
and both are expressed on a per capita basis. The “standard tax rates” have varied over time
according to federal government changes in the program, but for the most part, these have been
the average rate across all 10 provinces for each tax source. The reference group of provinces
has also varied, from being comprised of the top two provinces, all 10, and five (British
Columbia, Saskatchewan, Manitoba, Ontario and Quebec). Once those choices are made, the
calculation is straightforward in principle. If the province in question lags the reference-group
standard (i.e., F < S), then it is said to have a weak fiscal capacity and is entitled to an
equalization grant from the federal government equal to
E
, the gap between
S
and
F
, for each
person residing there. Conversely, if a provincial government’s revenue-raising capacity
exceeds the standard (F > S), then it receives no equalization entitlement. With revenue sources
so comprehensively included, this method of equalization grant calculation is known as the
representative tax system (RTS).