Alberta has introduced a motion in the provincial legislature to hold a referendum on equalization with the vote happening across the province in October.
On Monday, Alberta Premier Jason Kenney introduced the motion, noting Alberta can’t unilaterally implement the outcome of the vote, rather it is intended to be a strategy to negotiate with the federal government.
On Oct. 18 Albertans will be asked: Should the section of the Constitution that commits the Government of Canada to the principle of making equalization payments be removed?
The premier said this is a concern he has heard from Albertans across the province.
"For millions of Albertans, equalization has become the most powerful symbol of the unfairness for Alberta's deal in Confederation and for good reason," Kenney said.
"This is a strategy to elevate Alberta's fight for fairness in the federation to the top of the national agenda – to get Ottawa's attention," he said.
The premier said this move is a legal tool to make a strong political and legal point to Ottawa.
Kenney campaigned in the last provincial election on holding a referendum on equalization, which he said other provinces benefit from while Alberta is financially hurt by decisions made in Ottawa and other provinces. The Fair Deal Panel put forward a referendum on equalization as a recommendation in its report.
The premier cited a litany of reasons for the strategy – the federal government “surrendering” to then-President Barrack Obama’s veto of Keystone XL, scrapping the Northern Gateway pipeline, opposing the Energy East pipeline, and allowing British Columbia to delay the Trans Mountain pipeline as just a few reasons Albertans wanted changes to the equalization program.
“One of the biggest sources of frustration, at least in my conversations with Albertans, has been the fundamental unfairness of the equalization program. While the experts and pundits often mock the very idea of trying to change equalization, Albertans do not,” Kenney said.
Most Albertans Kenney spoke with said that they don't mind helping out their fellow Canadians, but the premier said they don’t like the hostile way Alberta's oil industry is treated.
The results of the vote will have no legal impact, and changing the program will require a change to the Constitution, which would require two-thirds of the provinces voting in support.
Equalization payments are one of three federal transfer programs and the money for the program is generated through federal revenue, including GST and personal and corporate taxes.
Then the federal government transfers payments through the program to provinces whose economies are struggling. Provinces that do not have a difficult time raising revenue do not receive payments from the federal government.
The formula works by calculating what a province's revenue would be if all the tax rates were the same as the national average. Then equalization tops up provinces who are lower than the national average.
The program is intended to ensure there are no disparities across the provinces and all Canadians can enjoy similar services, regardless of which province they call home.
The vote will take place during municipal elections this fall.