Sunday, February 03, 2019

In Response to Ron Ghitter



In the Saturday, February 2 edition of the Calgary Herald, former Senator and MLA Ron Ghitter published an opinion piece titled “O dysfunctional Canada, laments former senator Ghitter”. This piece is perhaps good rhetoric while being terrible reasoning.

Structurally, Ghitter’s argument is intended to get readers to “buy it” by first appealing to their sense of emotional outrage on a number of topics. He then closes it by essentially arguing for something that strongly reflects René Levesque’s “Sovereignty Association” concept from the 1970s. Essentially he is arguing for Alberta taking “greater control” over affairs while remaining part of Canada. Sovereignty Association failed to become a reality for good reason in the 70s, it’s certainly not a good idea now.

As an example of the “make you mad, show you a proposition”, I present the following from Ghitter’s article:
Meanwhile, Alberta contributes billions of dollars in equalization payments over the years so that Quebec can balance its budget while deficits are the truths in a struggling Alberta.
...
Firstly, it is time to immediately renegotiate our equalization agreement or opt out of it and take the heat.
The first part of this argument is a classic argument in Alberta politics, and it is designed to foment outrage. It conveniently ignores several key aspects of equalization and how it works, but it is clearly designed to provoke the reader's ire ("Omigod, how could they be so unfair to us?!"). Then it presents a proposition to "solve" the issue which is similarly ill-informed.

First of all, the opening of the argument makes it sound like Albertans contribute to this program “disproportionately” compared to other Canadians. This is false - Albertans pay federal taxes at exactly the same rates as other Canadians. The argument that we “pay more” is trivially explained by the fact that Alberta’s average incomes are significantly higher than those in other provinces. The argument that equalization “allows Quebec to balance its budget on the back of Alberta taxpayers” is at best a distortion, designed to promote outrage rather than to foster discourse. Alberta also needs to be reminded that Equalization as a program is not a buffer or emergency fund intended to save provinces when their economy tanks (which is always when the issue suddenly becomes a big deal in Alberta)

Other provinces would rightly look at Alberta’s “low tax” regime and rightly point out that their citizens each pay proportionately considerably more in taxes than Albertans do provincially. Our income tax base rate is considerably lower than most provinces, and we do not have a sales tax at all - both of which are levers that the provincial government could, and should, use to balance its budget before making a fuss about equalization going to other provinces. Whether the calculations that determine whether a given province receives payments under this program reflect political and economic realities adequately is a whole other matter.

Ghitter goes on to complain that “Quebec always gets what it wants” (more or less):
It’s a certainty that the demands of the province of Quebec for $300 million for immigrants’ expenses, more control over immigration, income tax collection, more money for Bombardier and support for dairy farmers will be accepted.
...
The premier of Quebec, while gladly accepting Alberta coin, says no pipeline will cross his borders with dirty Alberta oil, while tankers flow down the St. Lawrence Seaway with oil from Venezuela or rerouted from Saudia Arabia, Nigeria or the United States. Meanwhile, rail cars containing oil move on land through Quebec, creating a danger to its communities.
First, I must point out that it isn’t “Alberta coin” that Quebec receives. Again, this is a manipulative statement designed to make it sound like Alberta is directly funding Quebec. These are Federal dollars, collected through federal taxation powers. They are in fact CANADIAN monies, not specifically Albertans’, or Ontairians’ money. We would do ourselves well to remember this little fact.

It is no particular secret that Quebec has always been very successful in advocating for its own interests in confederation. Alberta has long looked at that success with suspicion. Part of Quebec’s success in this regard is a willingness to use the levers it has at its disposal, sometimes ruthlessly. Quebec has never been afraid to change its vote depending on the issues of the day. For all that I may disagree with the stated political objectives of the Bloc Québécois in terms of Québec sovereignty, it is hard to deny their effectiveness in forwarding that province’s interests in Ottawa - even while an “Alberta Prime Minister” (Stephen Harper) was in power.

Perhaps, Mr. Ghitter would like to discuss with Mr. Harper why the current equalization formula ended up being ratified if it was so unfair to Alberta’s interests. I imagine he would find that Mr. Harper would explain to him the political realities of such negotiations.
Under the guise of concern over the environment and First Nations rights, the feds propose legislation that will severely hamper oil and gas development in Canada. They say they support the pipeline but their actions belie such statements. Even their purchase of the pipeline seems to be an insincere (and costly) charade.
With all due respect to Mr. Ghitter, but I wonder just what aspect of the rule of law he would have the current government throw out the window in order to move the TransMountain Expansion project forward? The courts have made clear what needs to be done, and that process is unfolding as it must. It cannot be rushed or hurried, it must not only be comprehensive, but it must be seen to be so. Yes, I know that there are those who rail on about how we “just need to get the thing built”, but the blunt reality is that a narrow consultation process as created in 2012 is inadequate.

I find it most ironic that Mr. Ghitter goes on to rant about “foreign funded opponents” of TMX and other projects. Yes, we all know about Tides Foundation funding, but let’s not ignore the mega dollars that the oil industry (especially via the Koch brothers) has poured into climate change denialism and convincing Alberta in particular to loosen the regulatory restrictions on the industry. I am fairly certain that the Westcoast Environmental Law group will come along and challenge the outcome of the current process in the courts as well. That will also set of another round of bleating from Alberta’s politicians (not entirely without reason). However, such is the nature of our legal system. People have a right to be heard, and to challenge the government in the courts - to subjugate that right for a singular project would be a poor precedent to set in a free country.
I am not suggesting separation. I am too much of a Canadian to ever propose such a measure. But I do suggest that we take steps to take more control within our borders and face the realities of Alberta in the 21st century. 
Firstly, it is time to immediately renegotiate our equalization agreement or opt out of it and take the heat.

Secondly, we should take over immigration powers within the province.
 
Thirdly, we should take over our own income tax system and thereby control our own financial destiny.

Fourthly, we should examine every policy intertwined with the federal government and remove ourselves from them wherever possible. This includes everything from French on our corn flakes packages and elsewhere and positioning our securities and stock exchange institutions to become independent of federal controls.

We have learned from bitter experience that we cannot depend on Ottawa to be respectful of our needs and aspirations.
Quite frankly, this looks little different than Lévesque’s conceptualization of “Sovereignty Association” for Québec in the 1970s. To argue that we could “opt out” of equalization is laughably naive. The only way that could happen is if Albertans ceased paying federal taxes at all. If you are going to remain in Canada, federal taxes will remain a reality. I doubt very much Ottawa would be overly interested in providing an “exemption” on those taxes to any province on the basis of a disagreement over how those funds are disbursed within Canada.

To argue that we “should take over our own income tax system” also ignores the reality that it is the politics of Alberta that have stayed the hand of even a “tax-and-spend” NDP government in significantly changing our tax regime. The current system actually saves the Alberta government millions of dollars in administering our income taxes by offloading it to the CRA (a federal agency). For a tax-averse province like Alberta, it seems almost laughable to imagine that taking that back from the CRA would be beneficial.

With all due respect to Mr. Ghitter’s comments about our regulatory framework for investments and securities, he is completely at odds with the rest of the world. Canada is the last of the developed economies to not have its securities and exchange oversight federally regulated. This is actually widely held to be impeding Canada’s economic growth.

Alberta is fully within its powers to change its income taxes, levy a PST, or a Carbon Tax. We are already more than our own masters financially. Ottawa isn’t restricting our ability to balance our budget - our political climate is. Decades of “look how amazing we are” politics that played up the idea that we can “afford” low taxes on the basis of resource revenues had made us temporarily wealthy created the mythology that Alberta doesn't need to raise funds through taxation. It was a short-sighted bit of populist nonsense then, and the price of that short-sightedness is now coming home to roost. 
We are a forgotten appendage in the Canadian mosaic.
I wonder at the apparent speed with which Mr. Ghitter and other Albertans have forgotten the speed with which the Federal Government acted when it became apparent that Kinder Morgan was likely to cancel the TMX project outright.  A truly disinterested government would have quietly let that happen, similarly one opposed to the ongoing business of the oil patch would have acted similarly.  Instead, they bought the damn company in order to keep the project alive.  A more direct "transfer payment" is hard to imagine.

While on the political stage, Alberta is often ignored, we have to take some responsibility for that ourselves.  Alberta gets ignored because we can be predicted.  The odds are that we will vote conservative.  All the parties know this.  The conservatives ignore us because they can; the other parties do because they see no value in trying to sway a province with a decades long habit of voting one way.  This is precisely why Québec's efforts _are_ successful - that province has shown time and again that it will reward efforts made in its direction.  Alberta, not so much.

Mr. Ghitter's column is cleverly written, and will no doubt raise the ire of a good many people.  However, on the whole, it does little more than reiterate the same tired arguments that conservative politicians in this province have been flinging about for some time.  We should all take a step back when reading these types of pieces and ask ourselves "what is the writer's intent?", especially when we see phrasing that is clearly designed to raise our ire through the use of emotionally laden wording. 

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