The Alberta legislature building in Edmonton. (Photo 60608415 © Vadim Nikolaevitch Gouida | Dreamstime.com)

By Christian Oldale

Alberta looking to improve federal Equalization Program

Apr 21, 2023 | 4:16 PM

EDMONTON, AB – The provincial government is looking to collaborate with other provinces to make changes to the federal Equalization Program to benefit all Canadians.

Alberta’s position paper, Responding to Canada’s Growth Challenge – Options to Reform Equalization, highlights ways to simplify the program and increase economic growth.

The paper proposes reforms that would encourage provinces to adopt pro-growth policies to reduce their dependence on federal transfer payments.

With the province’s suggestions, elements like the GDP floor, the fiscal capacity cap and multiple resource revenue inclusion rates would be replaced with a simpler approach that uses publicly available macroeconomic indicators, such as gross domestic product and population, to determine if a province falls above or below the national average.

Premier Danielle Smith said in a news release, “We heard loud and clear from Albertans that the federal Equalization Program is unfair and must be changed or abolished. Alberta is committed to working closely with other provinces to ensure Canada remains a prosperous, vibrant and diverse place for Canadians to succeed.”

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Each province’s fiscal capacity per capita would be calculated by applying the national average tax rate to its GDP per capita and comparing it to the national standard.

The paper was created after the results of Alberta’s October 2021 referendum, where 61.7 per cent of those who voted said “yes” to removing the equalization section from the Constitution.

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