Alberta still leads the provinces in fiscal capacity, although the gap has narrowed because of the travails of its energy industry.ĭisaster assistance: The Canada Revenue Agency is encouraging individuals, businesses and first responders affected by B.C.’s flooding disaster to request taxpayer relief. It’s a different measure than the fiscal flows measured by Statistics Canada. That is wrong – that term is used for provinces with below-average fiscal capacity receiving equalization. Tombe’s analysis) have intimated that this is synonymous with Alberta becoming a have-not province. However, some (including the headline writer for Prof.
And so is the second reader: All provinces were net recipients, a consequence of the massive deficit that Ottawa recorded in the first year of the pandemic. Tombe’s work on FinancesoftheNation.ca.) So, the first reader is correct. (For an excellent visualization of that data, check out Prof. Yes, Alberta was a net recipient of federal spending in 2020 ($10.9-billion) for the first time in 55 years, as University of Calgary economist Trevor Tombe discusses here.
The fiscal flows statistic reported by Statistics Canada is measuring federal tax revenue flowing from the province. Neither the Alberta government, nor that of any other province, is paying anything. First, that specific error, or at least incorrect implication. And there’s a wider intimation that is incorrect. In rebuttal, another reader contended that all provinces received more than they had paid.īoth claims are true, sort of, but are wrong on one specific. Responding to last week’s Tax and Spend newsletter on Quebec and equalization, one online reader commented that Alberta had received about $11-billion more from the federal government than the province had paid in. So, for provincial governments entwined in labour negotiations, improved bottom lines may be welcome, but arriving just a little too early. Rising prices mean added motivation by unions to secure cost-of-living increases. Not only have inflationary pressures boosted the nominal growth in GDP (and along with it, tax revenues), he notes. Robert Hogue, senior economist at the Royal Bank of Canada, points out a parallel pressure coming to bear on those negotiations: higher inflation. In Quebec, Premier François Legault’s government is in the midst of talks with daycare support workers, a task presumably made trickier by that province’s booming fiscal prospects, including cutting a cheque to all households. New Brunswick’s Progressive Conservatives went out of their way to warn its public-sector unions that the province’s good fiscal fortune was a temporary phenomenon. And possibly, some gains for unions to seek at the bargaining table. There’s less pain to share, at the very least. We no longer have the revenue to justify higher comparative wages,” Alberta Finance Minister Travis Toews said during his budget address.Įxcept now, revenue has soared, the deficit has dropped substantially – and a return to surplus next year is even possible. That’s the approach Alberta Premier Jason Kenney took in the spring, when his government vowed to bend his province’s pay rates for public-sector workers down toward the national average. Sharing the pain is a political slogan with a reasonable chance of success, if a province is struggling to dig its way out of a big deficit. That’s good news – but not the best timing for provinces in the middle of tricky labour negotiations. The magnitude of the federal government’s fiscal rescue in 20, coupled with a faster-than-expected economic recovery and bubbling inflation, has sent provincial revenues on a rocket ride. Similarly, provincial premiers may be issuing their own entreaty of: “Please deliver unto me a budget surplus, but not yet.” In his fifth-century work Confessions, the Christian theologian famously, and perhaps ironically, pleaded: “Lord, make me chaste, but not yet.” Provincial governments in Canada are having a St.
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