"Basically, federal-provincial relations is a shakedown game and Alberta is learning how to play it. Maybe Kenney’s getting secret advice from Premier Legault because Quebec is the champion at playing the system."

Alberta Premier Jason Kenney before the tabling of the 2019 Budget at the Alberta Legislature Building in Edmonton, Alberta, on Thursday, Oct. 24, 2019. (Codie McLachlan/Star Edmonton)

We now know the cost of Western alienation, thanks to Alberta Finance Minister Travis Toews. It’s $2.4-billion, give or take a couple hundred million dollars.

That’s the price tag that was handed to Federal Finance Minister Bill Morneau at this week’s federal-provincial finance ministers’ meeting, the retroactive cash that Alberta wants Ottawa to compensate it for the drop in its tax revenues five years ago when oil prices crashed.

Toews recalled to everyone that there was lots of alienation in Alberta over the lack of pipeline capacity, the carbon tax, etc., and then added, “We need more than words. We need action.” Basically, $2.4 billion.

That’s the figure that Alberta has come up with through a revision of the Fiscal Stabilization Program, which provides provinces with payments in case of sharp year-over-year drops in tax revenues. Alberta got money under the program but the amount was capped at $60 per capita under an old formula. Now it wants more, and Morneau is inclined to be helpful.

READ MORE: Equalization: it’s all about the cash

What’s interesting here is that Toews seemed to go silent about scrapping the equalization program, which has been Alberta Premier Jason Kenney’s hobby horse for months, angry that Quebec gets billions from the program while Premier François Legault disses Alberta’s “dirty oil” and reports a $4-billion provincial surplus.

Kenney has threatened to hold a referendum on ending equalization, a nice publicity stunt, but nothing else. Equalization is a purely federal program financed by federal taxpayers and designed by federal politicians and it’s protected by the Constitution. It’s not Alberta’s program to change.

What’s more, the five provinces that get equalization are hooked on the money and ending it would hurt the four smallest recipients even more than it would hurt Quebec, in terms of the impact on their bottom lines. It’s a message I’m sure that Toews heard from his provincial counterparts.

The finance ministers’ meeting always coincides with Finance Canada’s unveiling of its transfer numbers for the coming year, a pre-Christmas gift envelope. The numbers made public this week make for some interesting reading.

Equalization makes up only a part of the transfers and goes to five provinces: Quebec, Manitoba, New Brunswick, Nova Scotia and Prince Edward Island. Other transfers for health and social spending are apportioned out to residents of all provinces on a per-capita basis.

Quebec continues to get the biggest chunk of equalization money, a total of $13.3 billion in 2020-21, but that total is up less than one per cent over last year. Presumably, that’s because the Quebec economy has been doing better in recent years.

In fact, on a per capita basis, Quebec gets the least of any of the five provinces. Its total cash take is big because it’s got a large population.

The big equalization “winner” among the provinces this year is Manitoba, whose equalization allocation will jump 11.3 per cent next year. New Brunswick gets 9.2 per cent more, Nova Scotia 5.1 per cent and P.E.I. 3.7 per cent. Asking those provinces to support a massive reform of equalization would be a bit like Alberta asking Ottawa to stop building the Trans Mountain Pipeline. It’s not in their interest and it’s not going to happen.

But a one-off ask from Alberta of Ottawa for cash? That could work, provided no other province loses anything and it’s not too much money for Ottawa. And there’s another part of the deal. The recipient would have to tone down the whining, which Kenney appears to be doing following his recent meeting with Justin Trudeau in Ottawa.

Basically, federal-provincial relations is a shakedown game and Alberta is learning how to play it. Maybe Kenney’s getting secret advice from Premier Legault because Quebec is the champion at playing the system.

Take the $2.2-billion Quebec got in compensation for harmonizing the GST with provincial sales taxes 10 years ago. Quebec had done a deal with Ottawa in 1992 and partially harmonized its tax with the new GST, making a special arrangement whereby Ottawa agreed to pay Quebec to collect the federal tax in the province. Both sides were happy.

Years later, the federal government began signing agreements with other provinces to get them to harmonize their taxes with the federal GST. Ontario got $4.3 billion in 2009. But the Ontario deal was fundamentally different from what Quebec had voluntarily signed up for many years before. Yet despite the different circumstances, Quebec saw an opening and began demanding its own form of compensation.

The Conservative government resisted but then in another piece of questionable regional economics and pork barrel politics, Harper promised federal loan guarantees to Newfoundland and Labrador for the Muskrat Falls hydro project in the run-up to the 2011 federal election.

Quebec was livid because the Muskrat Falls effective subsidy was seen as a way at getting back at Hydro-Quebec for the lucrative deal it signed decades earlier for Churchill Falls power. Quebec began complaining that it had never got similar treatment for its hydro projects but whinging suddenly stopped after Ottawa agreed to hand over $2.2-billion in GST compensation cash.

An even weirder one-off came in the form of federal compensation to Nova Scotia for the so-called Crown shares. Ottawa, it was claimed, owed the province for shares it could have owned in the Nova Scotia offshore oil and gas plays. Nova Scotia ended up extracting $870-million from the feds in 2008 for these virtual shares, 22 years after the fact.

As for the Nova Scotia offshore oil play, it never lived up to its promise and is now shut down. Extracting money from Ottawa proved much more profitable than extracting oil from the ground.

All of you who are worried that Alberta is about to go its own way should be relieved. Alberta has finally joined the great Canadian shakedown club. It’s not going anywhere.

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