The Canadian Imagination

What it means to be Canadian; examining and reworking Canada as a nation.

Friday, April 17, 2009

To tax or not to tax

Alberta has finally started to hit the wall -- started, because there is quite a bit of wall left to hit. In many ways, the situation is no different from the wave which had started to hit Arizona two years ago. It is, however, perhaps more difficult: because Alberta has long assumed its oil sands somehow gave it immunity from economic realities elsewhere.

At some point, Alberta had completely forgotten that wealth relying heavily on foreign investment also increases the degree of vulnerability to those foreign investments.

Despite constant resentment at Ottawa generally and transfer payments specifically, Alberta still managed to build up a Heritage Fund the other provinces could have reason to envy, almost entirely because it has been blessed with oil during two periods of time, separated by some thirty years, when domestic oil became more valuable by magnitudes beyond what its per-barrel price might seem to indicate.

Alberta could have considered itself naturally blessed and found a non-grudging way to work within a federal structure where it happened to have the resource of the moment (but recognising that such fortunes can change, as they have before and will again). Instead, its attitude over the past fifty years has made it the poster child for anti-federalist conservatism, built almost entirely upon an unwillingness to think outside its own borders unless there was personal gain to be made.

Now, economic realities have caught up with Alberta. Its current projected record deficit of $4.7 billion comes as a shock of cold water to a province which has never really had to understand the concept of deficit financing before.

Currently targeted by Alberta is the Canada Health Transfer. Alberta claims that it only wants its fair share. Alberta finance ministry figures show that Alberta currently gets $542 per capita in federal health transfers, compared to a minimum $745 per person for every other province. Premier Ed Stelmach is running what will probably be a locally effective public relations campaign, painting Alberta as the province that just can't get no respect:
To me, an Albertan that requires health services, that is sick or suffers from whatever disease, is just as sick as they are in Quebec or Ontario.
True enough. But what this campaign will never mention is that Stephen Harper's pro-decentralist policies have already allowed for this. The 2007 budget has outlined guidelines which will shift payouts from the Canada Health Transfer to a fully per capita basis by 2014, when the current federal-provincial health accord expires. This will be a major change in policy, and extremely difficult to speed up for a province which has shown reluctance to work with the federal government in the past unless it stood to gain even more.

Equally, what this campaign will not show is that most of Alberta's health care professionals were trained outside Alberta, subsidised by their own native provinces or countries through their taxes, to be drawn to a province where their own salaries won't be similarly taxed to sustain future generations of health care professionals. Similarly, most of Alberta's teachers have been trained outside Alberta, as well as most of its professionals in all fields. It is for other provinces to sustain, and for Alberta to profit thereby. In parallel, should some people no longer be profitable to Alberta, it is the job of other provinces to support them. A large part of Alberta's net prosperity has been at the price of abandoning its poor, even those poor who had previously helped to build its booming economy.

Still, let bygones be bygones, and accept that at this point in time, Alberta is desperate to the point that it is willing to chop public health services. Again, this is not a new pattern. The first things on Alberta's chopping block have always been public services, be they health or in other social services departments. Whatever one might think of the most recent choices for cuts (chiropracy, sex changes), these are only the most recent examples in a long de-listing that is now due to become even longer. As always, private health insurance coverage such as Blue Cross is expected to pick up the slack, which government language explains as giving people the right to pay for the health care they want:
If they want to use acupuncture, they should have the right to buy insurance for that. If they want to use a chiropractor, then they should have the right to buy insurance for that.
- Alberta Minister of Health Ron Liepert
Although Liepert deliberately uses examples of non-traditional medicine, knowing the audience to which he appeals, enough examples of traditional medicine have also been cut from public funding that it would not be inaccurate to describe Alberta's health care system as testing the boundaries of how far a health care system can be privatised and still remain Canadian.

More interesting is that, even though it faces a serious deficit, Alberta still refuses to impose a sales tax which would wipe out that deficit instantly. Alone of every province in Canada, Alberta is determined that the entire moral burden of imposing sales taxes shall be federal: yet of these federal funds, Alberta still wants its share.

After all, morality has no place in the bottom line.


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