Canada’s premiers want more money from Ottawa, especially for provinces suffering from the lingering slump in the oil sector. Their announcement was made following the annual meeting of the country’s 13 premiers in Toronto on Dec. 2.
Even the premiers of Quebec and British Columbia, despite their opposition to pipelines, joined a united call for more federal help to oil-rich provinces.
But the question in the back of many minds is whether this will quell the growing feeling of western alienation.
Following the meeting, the premiers issued a joint communique that called for changes in the Fiscal Stabilization Program (FSP). Alberta received just $248 million from the FSP in 2016, despite watching $8.8 billion of revenue disappear as the oilpatch dried up.
Following the meetings, Newfoundland Premier Dwight Ball told the media that when oil royalties in his province dropped by $1.1 billion, in 2016 the FSP only shelled out $7.9 million.
“When you use the word ‘stabilization fund,’ you’d think the intent would be to stabilize something. Well, it didn’t work,” Ball said.
“Alberta, Saskatchewan, and Newfoundland and Labrador are in very difficult circumstances with the rapid drop in oil and resource revenues,” said Quebec Premier François Legault. “We’re all asking the federal government to improve this program to provide more support to those provinces.”
Currently, provinces can apply for help from the federal government if a province has a five-year decline in its non-resource revenues of more than 5 percent. They can also apply if resource revenues fall more than 50 percent in a single year. However, help is capped at $60 per capita.
The communique said, “Changes could include, but are not limited to, removing the per capita cap, lowering the non-resource revenue threshold and retroactive payments over the last five years.”
Such proposals would cost Ottawa an additional $1 billion, an amount much less than the $20 billion handed out under equalization. Alberta Premier Jason Kenney said he still wants equalization changed, but welcomed the solidarity shown regarding the FSP.
“I have been trying to convey to Albertans that we are not alone or isolated in the federation,” he said. “There are provincial and territorial governments that get what we’re going through and understand our ask for a fair deal.”
Although such changes could cost Ottawa more than $1 billion, they would still be much less than the $20 billion equalization program.
The provinces also want the annual Canada Health Transfer to rise by 5.2 percent annually. The amount was recognized by the Conference Board of Canada as the actual cost of health care in Canada. Currently, that number only rises by the rate of GDP growth (roughly 3 percent).
“The ask at this table of 5.2 percent is not a number that we plucked out of the air. It is a number that is necessary for us to sustainably fund what is a growing investment in jurisdictions across this province,” said Saskatchewan Premier Scott Moe.
‘High Degree of Unity’
Joseph Garcea, a political science professor at the University of Saskatchewan, says the unity displayed is not insignificant. “Quite often premiers leave conferences and they’re more divided than when they got there. … This time they have a high degree of unity.”
The minority position of the governing Liberals and the need to respond to calls for western separatism give the upper hand to the premiers.
“They basically all realize they’ve got the federal government over a barrel and they’re gong to spank it and they’re going to try to get as much out of it as they possibly can,” Garcea says.
“It’s like kids in a candy store. They want it all. The question is how much can the federal government afford to give them.”
Garcea believes the current push by the premiers won’t lead to western separatism. Under the Liberals it means more money. But whenever the Conservatives return to power, the provinces could enjoy “a very highly decentralized form of federalism with limited involvement by the federal government except to write cheques when possible.”
Indeed, the communique emphasizes the need for federal consultation with the provinces, freedom from federal regulations on purely provincial energy development projects, and the ability to opt out of federal programs “with full compensation.”
Deputy Prime Minister Chrystia Freeland was present for the gathering, but the premiers want to meet with the prime minister himself. Moe wrote Trudeau on their behalf, sending the communique and requesting two days of talks in early 2020.
The considerations for the Liberal government are clear.
“They want to score a lot of political points but limit the amount of funds they need to transfer to score those political points,” Garcea says. “What they’re hoping it will show is that they’re willing to put some water in their wine and make some compromises to make federalism work.”