Parliament Hill in Ottawa with Parliamentary and Departmental Buildings

EDMONTON, AB, December 1, 2020 – Today, Fairness Alberta expressed its disappointment in the federal government’s modest improvement to Canada’s Fiscal Stabilization Fund, particularly the rejection of the retroactive payments to Alberta that all Premiers agreed to a year ago.  Raising the cap from $60 to $170 per capita retroactive only to 2019-20 was announced in Finance Minister Freeland’s Fall Economic Update.

 

In June, Fairness Alberta released its analysis of the program and proposed reforms that would have made Alberta eligible for roughly $7 billion total in 2016 and 2017, rather than the $250 million cap in each year.  Alberta’s revenues fell by $8 billion in 2015-16, but it only earned a “stabilization” payment of $248 million, or 3.1%.  Newly released 2019 figures show that Albertans paid $90 billion more in taxes to Ottawa than was spent back in Alberta over the last 5 years of downturn.

 

“While it is good to finally see attention paid to this unfair and ineffective program, a $170 per person cap hardly provides fiscal stabilization when a province faces a major downturn like Alberta did in 2015 and again this year,” said Executive Director Dr. Bill Bewick.  “Albertans have been ‘stabilizing’ Canada’s finances to the tune of $4,000 – 6,000 net per person every year for over a decade – for Ottawa to tell us we can get 4% of that back when our revenues collapse is not good enough.”

 

Fairness Alberta has run campaigns in Alberta and Ontario highlighting the $324 billion net transfer to other provinces via federal taxes since 2000.  The 20-year cumulative total is a $318,000 contribution per Alberta family, and a $42,000 benefit for families across Canada.

 

“When you consider that Albertans pay about $750 per capita to the Equalization program alone every single year, it doesn’t seem fair that Albertans get such a paltry amount in the years when we face tough times.” Bewick added.

 

The full analysis of the Fiscal Stabilization Fund can be found in the Issues section of our website and in a guest column in the Edmonton Sun. For more information on Fairness Alberta, please visit our website at www.fairnessalberta.ca.

 

For further information or to arrange interviews, please contact:

Bill Bewick, Ph.D.

Executive Director, Fairness Alberta

Cell: (780) 996-6019

Email: [email protected]  

 

Illustration of Alberta’s Stabilization Payments In Fiscal Years 2015-16 And 2016-17under Alternative Scenarios

 

Stabilization Formula

2015-16 ($ millions)

2016-17 ($ millions)

Total ($ millions)

Actual stabilization payments

248

251

499

Payments under alternative stabilization formulas

   

$120 per capita cap

496.6

502.8

999.4

$170 per capita cap

703.6

712.3

1,415.9

No cap on payments

1,589.3

1,159.8

2,749.1

Deductible: 5% for all revenues

5,836.8

1,159.8

6,996.6

Deductible: 0% for all revenues

7,184.1

2,194.5

9,378.7

Deductible: 0% for nonresource revenues and 50% for resource revenues

2,464.7

2,194.5

4,659.2

(source: Trevor Tombe, “An (Overdue) Review of Canada’s Fiscal Stabilization Program,” Institute for Research on Public Policy; Feb. 2020)

 

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