CALGARY — With a new national debate on equalization on the horizon, former federal Liberal Leader Michael Ignatieff urged Albertans to “get a grip” over the federal funding program.

Ignatieff faced Wildrose Leader Danielle Smith in a Thursday night debate sponsored by the Calgary Enterprise Forum on the proposition that “equalization is bad for Canada.”

Equalization is a constitutionally-enshrined federal funding program aimed at ensuring provinces are able to deliver relatively similar levels of service at relatively similar levels of taxation. Alberta is one of four “have” provinces that receive no funding because of their strong revenue position, a fact that’s been a long-standing irritant in some quarters of the province.

But Ignatieff, who lost his seat in the 2011 federal election, said the program is beneficial not only for the country but for Alberta.

“The question is whether you want an Alberta that’s leading from the front, that believes passionately that we need rough equality of opportunity in our country, that we don’t want provinces to be left behind,” Ignatieff told the crowd at the Calgary Petroleum Club.

“That vision of basic equality is not only good for Canada, it’s crucial to the economic future of Alberta.”

Alberta residents and businesses send about $19 billion more in taxes and other payments to the federal government than it receives in services.

But Ignatieff noted that is because of the province’s strong economy and the $15.4 billion equalization program does not affect a province’s fiscal capacity or take revenues directly away from provinces.

Ignatieff said the provinces that receive equalization use those funds to train workers who end up coming to Alberta and the program stabilizes the national labour force, stimulates demand for Alberta goods and services and sustains a “rough equality of citizenship.”

He also said that tax rates are much higher in the have-not provinces than in Alberta.

“Let’s get a grip here. You have the highest per capita income in the country,” said Ignatieff.

But Smith, who has called for sweeping reforms of the equalization program, said Albertans are getting a raw deal from the $19-billion fiscal imbalance.

“We get nothing. Not even gratitude,” she said.

Smith said Albertans are subsidizing overly generous daycare programs, tuition, power costs and drug plans for Quebeckers.

And she said the equalization program gives disincentives to provinces to enhance their economies.

The equalization program’s arcane funding formula comes up for renewal in 2014.

Briefing notes obtained by Postmedia suggest the federal Conservative government is considering substantial changes, possibly including recalculating how hydroelectricity production and the associated economic benefits are factored into equalization.

That could have a huge impact on hydro-producing provinces such as Quebec, Manitoba and British Columbia. The first two are major recipients of equalization while B.C. is currently a “have.”

Provincial Finance Minister Doug Horner said Thursday the government supports the basic principles of equalization but some changes are in order to make it fair.