Oil and the East-West Divide

I have been in a few heated discussions of late over at BPOC, around the Alberta surplus and what should be done with it and by whom.

Let me state right now, unequivicolly, that the Alberta surplus should be controlled and managed by Alberta, not by Ottawa. Alberta has its surplus because and lack of debt because of years of belt tightening and a general lack of funding for provincial infrastructure by the government, as well as the recent jumps in the price of oil. I have heard of schools with asbestos in the walls and dangerous highways killing Albertans on a regular basis. Alberta desparately needs to re-invest in itself.

As you can see from the posts, there was a lot of heat generated. The debate boiled down to whether the greedy "Eastern Bastards" were trying to take the money from the greedy "Redneck Albertans".

A letter from Paul Noel of Ottawa in the Globe and Mail sums up the true feelings of most Ontarians on this issue:

"Why are The Globe and CTV trying to create jealousy and conflict in Canada where none exists? Nobody that I've seen or heard is going around bad-mouthing Alberta's good fortune. For over 100 years, Ontario's industrial economy prospered behind a high tariff wall that exploited the economies of the rest of the country, which had to sell natural products of farm, forest and fishery at world prices, but buy technology and equipment at tariff-inflated Ontario prices. Ultimately, Canadians all benefited from a strong, wealthy Ontario, just as we will all benefit from a strong, wealthy Alberta, and if oil continues to be our fuel, a strong and wealthy Nova Scotia and Newfoundland. Stop trying to spread national dissension." [empahsis mine] - h/t to Progressive Calgary

This little controversy is merely a symptom of a bigger problem - the equalization scheme in Canada is a mess. Jack Layton pointed this out back on August 28th. He has called for a re-examination of how equalization is done in this country.

Right now we have a hodge-podge, to put it politely. Alberta has a surplus of $7 billion it is desparately trying to maintain its current payment level. Newfoundland has been given the right to keep its oil revenue yet still receive equalization payments from Ottawa. Ontario, still pays out more than it gets (as Alberta does) while still trying to fight a deficit that was hidden until two years ago. Saskatchewan falls somewhere in the middle. Meanwhile, our Federal Government is heading toward another $9.2 billion surplus as well.

There seems to be no rhyme nor reason to it. As a result, regional cleavages are now emerging that show signs of genuinely straining federalism and Confederation itself (not just in Quebec anymore).

So what is needed is a re-negotiation and examination of the fiscal side of federalism, as Jack Layton called for. Hoepfully the spirit of creativity, debate and compromise that we on the left and my friends on the right have shown over at the Blogging Party of Canada policy debates, can be captured to solve this problem.

This should be an opportunity to solve this problem, not a chance to exaccerbate old regional issues for political gain.

This is not about Alberta vs the Rest of Canada, its about getting a Federal-Provincial equalization scheme that is fair to everyone.