2019 Federal Election after thoughts
This had been a charged past few months. And it is difficult to think about these things without letting emotions rule. But, there are some pretty clear thoughts I can make.
Trudeau should have decided to convene parliament sooner.
People really don't understand equalization.
Nor do they understand Provincial debt.
Nor do they understand pipeline logistics.
Nor do they understand secession.
The first is simple. Things are spiralling out of control. Albertans are jumping to the conclusion that this government can't work for them. But, it hasn't even started yet. If Trudeau has a real plan for unity, he should start governing. He should have taken Scheer up on his challenge to open session the day he recommended. In my opinion it would still have been late. But, it would have sent a message that he was listening and co-operating.
In the time which has lapsed, Singh has also publicly stated he might vote against the throne speech. Which is really a non-statement. But, it makes it easier now for him to justify publicly if he does pivot that way.
Starting parliament could have dealt with much of this. I don't really get the sense that tensions in the west are cooling down. So, allowing them to stew and get angrier is possibly making things worse.
Equalization has been a major rallying cry. But, it seems like most people want to weigh in without any understanding. These payments aren't something Alberta pays to the government. Nor are they an added tax or anything like that. In fact, this $40 billion number is largely a fictitious figure.
It relies on ignoring where the money truly comes from. Firstly, this money never touches the hands of the Provincial government. Alberta as a Province pays $0 towards this directly.
What happens is, every Canadian pays taxes according to the same set of rules (more or less). From that money collected, a portion of it is constitutionally protected to be paid out to the Provinces and Territories that are worse off in an attempt to help ensure a similar level of public services (like health, education, etc...) are available to all Canadians.
Albertans have the highest incomes in the country... by a substantial margin. And they have a resource rich Province which is currently generating a lot of taxable income in businesses as well. As a direct result of this, there is no adjustment of the equalization formula will change their position in that calculation.
As for the amount they pay in taxes? Well, this is where things get interesting. The average Albertan pays the same Federal tax amounts on the same wages as anyone else. But, because they earn more on average, it also means they pay more on average. However, in terms of overall tax burden. As the only Province in Canada with no PST, they may actually end up paying less than everyone else.
Which leads into the next point of confusion; deficits. Equalization is a fun target because the current Alberta deficit is smaller than that $40 billion figure they like to toss around. And Quebec's surplus is less than the portion they receive. In short, the thinking is that without equalization the two Provinces fates would be reversed.
But, that isn't true. Without equalization, Quebec WOULD be in a deficit position. This is because equalization payments ARE paid to the Provincial governments. But, Alberta would still not be in a surplus position. Remember, this money isn't coming from the Provincial government. Despite some of the terminology thrown around, Alberta does not "cut a cheque" to the Federal government or to Quebec or whatever line you're being fed.
Even if Federal taxation was reduced owing to a lack of equalization, it would not add a single dollar to Alberta's Provincial budget.
Alberta is running a deficit for a simple reason; they don't levy enough in taxes for the services they yield. Remember, they are the ONLY Province without a Provincial component to their sales taxes. Despite being the wealthiest Province. Even a modest PST component could return Alberta back to a surplus position with money to spare for the services the current Provincial government cut.
Quebec has one of the highest provincial taxation rates and would be in a deficit without equalization. But Quebec also offers a LOT of public services, and could probably afford to scale back and still break even were equalization payments removed. So, the current vilification of Quebec by Alberta is sorely misplaced.
On that, we'll shift quickly to CPP. Yes. It would hurt CPP and thus the rest of Canada initially if Alberta pulled out. But, I'm not convinced that it wouldn't hurt Alberta more. Firstly, while Alberta does benefit, at the moment from a young workforce, that changes over time. They won't always have the youngest workforce. And, should that change, they face a bigger problem. With a larger average income, that means more people eligible for the maximum payout. Which means, when Albertans start aging, they will hit that pension fund harder than the average Canadian.
Then there is the lack of understanding on pipelines. BC and Quebec are 2 Provinces any pipeline MUST go through to establish a pipeline based energy corridor in Canada. Both have stated that it is a no go. This is a far bigger obstacle than any bill the federal governments have passed. So, pretending the federal governments stance on pipelines is divisive is a red herring. Another government willing to lift restrictions would then just end up sitting on the sidelines or butting heads when BC and Quebec threaten secession. And one of those Provinces elected a whole lot of separatists!
Secession was my last point, but I couldn't get into it rationally it seems. So, I'll simply say the obvious; none of these issues will be resolved or even improved by seceding. And even if you're just sending a message you run the risk of starting a movement which doesn't share your ideals and can't be stopped.
Trudeau should have decided to convene parliament sooner.
People really don't understand equalization.
Nor do they understand Provincial debt.
Nor do they understand pipeline logistics.
Nor do they understand secession.
The first is simple. Things are spiralling out of control. Albertans are jumping to the conclusion that this government can't work for them. But, it hasn't even started yet. If Trudeau has a real plan for unity, he should start governing. He should have taken Scheer up on his challenge to open session the day he recommended. In my opinion it would still have been late. But, it would have sent a message that he was listening and co-operating.
In the time which has lapsed, Singh has also publicly stated he might vote against the throne speech. Which is really a non-statement. But, it makes it easier now for him to justify publicly if he does pivot that way.
Starting parliament could have dealt with much of this. I don't really get the sense that tensions in the west are cooling down. So, allowing them to stew and get angrier is possibly making things worse.
Equalization has been a major rallying cry. But, it seems like most people want to weigh in without any understanding. These payments aren't something Alberta pays to the government. Nor are they an added tax or anything like that. In fact, this $40 billion number is largely a fictitious figure.
It relies on ignoring where the money truly comes from. Firstly, this money never touches the hands of the Provincial government. Alberta as a Province pays $0 towards this directly.
What happens is, every Canadian pays taxes according to the same set of rules (more or less). From that money collected, a portion of it is constitutionally protected to be paid out to the Provinces and Territories that are worse off in an attempt to help ensure a similar level of public services (like health, education, etc...) are available to all Canadians.
Albertans have the highest incomes in the country... by a substantial margin. And they have a resource rich Province which is currently generating a lot of taxable income in businesses as well. As a direct result of this, there is no adjustment of the equalization formula will change their position in that calculation.
As for the amount they pay in taxes? Well, this is where things get interesting. The average Albertan pays the same Federal tax amounts on the same wages as anyone else. But, because they earn more on average, it also means they pay more on average. However, in terms of overall tax burden. As the only Province in Canada with no PST, they may actually end up paying less than everyone else.
Which leads into the next point of confusion; deficits. Equalization is a fun target because the current Alberta deficit is smaller than that $40 billion figure they like to toss around. And Quebec's surplus is less than the portion they receive. In short, the thinking is that without equalization the two Provinces fates would be reversed.
But, that isn't true. Without equalization, Quebec WOULD be in a deficit position. This is because equalization payments ARE paid to the Provincial governments. But, Alberta would still not be in a surplus position. Remember, this money isn't coming from the Provincial government. Despite some of the terminology thrown around, Alberta does not "cut a cheque" to the Federal government or to Quebec or whatever line you're being fed.
Even if Federal taxation was reduced owing to a lack of equalization, it would not add a single dollar to Alberta's Provincial budget.
Alberta is running a deficit for a simple reason; they don't levy enough in taxes for the services they yield. Remember, they are the ONLY Province without a Provincial component to their sales taxes. Despite being the wealthiest Province. Even a modest PST component could return Alberta back to a surplus position with money to spare for the services the current Provincial government cut.
Quebec has one of the highest provincial taxation rates and would be in a deficit without equalization. But Quebec also offers a LOT of public services, and could probably afford to scale back and still break even were equalization payments removed. So, the current vilification of Quebec by Alberta is sorely misplaced.
On that, we'll shift quickly to CPP. Yes. It would hurt CPP and thus the rest of Canada initially if Alberta pulled out. But, I'm not convinced that it wouldn't hurt Alberta more. Firstly, while Alberta does benefit, at the moment from a young workforce, that changes over time. They won't always have the youngest workforce. And, should that change, they face a bigger problem. With a larger average income, that means more people eligible for the maximum payout. Which means, when Albertans start aging, they will hit that pension fund harder than the average Canadian.
Then there is the lack of understanding on pipelines. BC and Quebec are 2 Provinces any pipeline MUST go through to establish a pipeline based energy corridor in Canada. Both have stated that it is a no go. This is a far bigger obstacle than any bill the federal governments have passed. So, pretending the federal governments stance on pipelines is divisive is a red herring. Another government willing to lift restrictions would then just end up sitting on the sidelines or butting heads when BC and Quebec threaten secession. And one of those Provinces elected a whole lot of separatists!
Secession was my last point, but I couldn't get into it rationally it seems. So, I'll simply say the obvious; none of these issues will be resolved or even improved by seceding. And even if you're just sending a message you run the risk of starting a movement which doesn't share your ideals and can't be stopped.
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