By Kevin Sorenson, M.P.,
A couple of weeks ago I wrote about the $4.5 billion Trans Mountain buyout and the dark clouds hovering over the federal government from that transaction. From the misuse of taxpayers’ dollars to the lack of consultations with indigenous people to the environmentalists’ protests, the sun certainly wasn’t shining for Prime Minister Trudeau as Kinder Morgan packed up to leave this country. Storm clouds are now brewing for the Liberal’s over their lack of transparent renewed provincial equalization formula and the intensifying trade war with the U.S.
Just as the House of Commons was recessing for the summer on June 21, we learned that a five-year equalization plan was snuck into the omnibus budget Bill. There was no consultation, there was no debate, there wasn’t even a heads up, and now, the provinces are saddled with a plan until 2024 in which Alberta, Saskatchewan, Newfoundland and B.C. get nothing. It is pretty hard to tell out-of-work Alberta oil workers and towns that depend on the coal industry that we are a “have province” and therefore ineligible to receive equalization payments. Even harder yet, tell them while we get nothing, a province blocking the movement of our oil is getting $12 billion. Alberta United Conservative Leader Jason Kenney was recently quoted as saying, “We will continue to be forced, even when times are bad, to subsidize public services in other parts of the country where politicians have been trying to block our pipelines and impair our energy industry.”
Equalization payments have been around since Confederation when the federal government used their power to tax to transfer money to the provinces. In 1957 a formal system of transfer was established to help the struggling Atlantic provinces. The objective was to give the provinces, particularly those with low rates of economic growth, the same per capita revenues as the two wealthiest provinces; Ontario and B.C. Over the years, amendments have been made to the original formula and in 1982 the Constitution was amended to include “the rights of the poorer provinces to equalization.”
In 2004, with an agreement between the provincial and federal governments, there was a move away from the traditional formula to fixed funding. On the advice of an expert panel, the formula-driven calculations were brought back in 2007.
While there are many different points of view of how, if at all, the equalization payments should once again be changed, those opinions don’t matter. As far as the Liberal government is concerned, the debate was over before it ever began.
We sincerely hope that the debate or at least some rational discussion is not over with the U.S. on the tariffs they are threatening to impose on automotive imports. TD bank is warning that 160,000 jobs in Canada’s automotive sector could be at risk if this threat becomes a reality. This potentially amounts to the loss of one in five Canadian manufacturing jobs.
My Conservative colleagues and I are not going to just idly stand by to see how big this storm may get. We have launched the Defend our Local Jobs tour (www.defendlocaljobs.ca). We are going to talk with workers, businesses and local labour groups to determine how we can best respond to the U.S. tariffs that are threatening our economy. We may not be able to prevent the storm but at least we can try to mitigate the damage.
If you have any questions or concerns regarding this or previous columns you may write me at 4945-50th Street, Camrose, Alberta, T4V 1P9, call 780-608-4600, toll-free 1-800-665-4358, fax 780-608-4603 or e-mail Kevin.Sorenson.email@example.com.