Alberta Minute: Equalization, Oil Curtailment, and Beer

Alberta Minute – Your weekly one-minute summary of Alberta politics.

Alberta Legislature by IQRemix on Flickr

This Week In Alberta:

  • The Legislature is still on break for Summer, but various reviews and consultations are continuing, including the AHS review, and the Red Tape Reduction consultation.
  • On Thursday the Alberta Court of Appeal will hear the government’s appeal on Bill 9, the Public Sector Wage Arbitration Deferral Act. Bill 9 is currently facing a court challenge because Unions claim it nullifies the collective terms agreed to in the last set of bargaining; namely, the right for wage talks to be heard by June 30.
  • Service Alberta Minister Nate Glubish is conducting a tour this week, consulting on the need to modernize registry services. The Minister has noted that it is the government’s intent to collaborate with registries in developing an up-to-date system instead of working in competition with them. While registries undeniably need modernization, we should remember that citizens are legally required to use registries to file government paperwork, and in many cases are paying exorbitant fees simply to fill out a paper form and then watch a registry agent reenter their information into a computer system. There will always be a role for registry offices to help those who don’t want to file paperwork themselves, but for those who are happy to do it themselves, the government should just put a form on their website and make filings free, as is done federally.


Last Week In Alberta:

  • The equalization saga heated up again when Quebec’s Premier, François Legault, claimed equalization was part of the original deal regarding Canada’s creation. Let’s be clear, whether Alberta gets a pipeline to tidewater or not, the equalization formula is unfair to Alberta. Since 1961 Alberta has transferred out a net $611 billion; while a net $476 billion has been transferred into Quebec since 1961. Quebec’s renewable resource revenue is not counted in the formula, while Alberta’s non-renewable resource revenues are counted. The formula’s emphasis on fiscal capacity inherently favours costly high-tax policies as it willfully ignores the deadweight losses of higher taxation levels to the detriment of low-tax jurisdictions like Alberta. It’s time to hold a referendum on abolishing equalization.
  • The Alberta government announced an extension to their controversial curtailment plan through 2020. In an attempt to lessen the harm of these production quotas on small and midsized producers the government will allow companies to produce up to 20,000 barrels per day before the limit kicks in, which is twice the previous exemption. Unsurprisingly, however, the exodus of capital out of Canada’s oil industry has continued, with more than US$30 billion worth of foreign capital having been divested out of our energy industry in the past three years. It’s almost like onerous government regulation and having the government tell businesses how much of something they can produce harms investor confidence.
  • The government also made adjustments to the tax system for breweries, raising the amount of beer that can be produced at the lower tax level, before a higher markup is introduced. This decision undoes a 2017 effort by the NDP who tried to stimulate the local craft beer sector at the expense of higher beer prices for consumers. While we’re glad that midsized brewers will no longer be punished with a higher tax rate, it does raise the question of why brewers pay a markup in the first place. We already have a corporate tax on profits – why do we need a separate tax on beer as well?