Kenney should be careful what he wishes for

Alberta Premier Jason Kenney wants Canada’s equalization formula adjusted to be fairer to Albertans.

image: Macleans

When it comes to equalization payments to provinces, Albertans think that there must be a mistake. They see themselves as contributors to Quebec at a time when Quebec’s economy is on a roll and Alberta is in the dumps.

Kenney is being disingenuous when he claims that the current formula is unfair. His government was the author of the current formula in 2009 when he was a cabinet minister under the Harper Conservatives.

Kenney surely knows that one of the reasons Alberta pays more into equalization is that the province has more high-income earners. While only eleven per cent of Canadians live in Alberta, 21 per cent of Canada’s $100,000-plus earners live there.

Of course, high-income earners mean little if you are unemployed.  In October, 2019, Alberta’s seasonally adjusted unemployment rate was 6.7 per cent compared to Quebec at 4.7 per cent.

Income is just one factor in determining equalization says business reporter Konrad Yakabuski:

“The basis for determining whether any province qualifies for equalization payments is whether its fiscal capacity – the amount of revenue it could raise if it applied average tax rates, combined with its natural resource royalties – is below the national average. Despite a recession in Alberta following the 2014 crash in oil prices, and a slow recovery since, that province’s fiscal capacity remains far above the national average (Globe and Mail, Nov. 27, 2019).”

Kenny would like to see Alberta’s natural resources removed from this calculation, presumably so that Quebec would receive less. That plan would backfire because Quebec, too, has vast hydroelectric resources. Quebec would actually receive more according to calculations prepared by University of Calgary economics professor Trevor Tombe.  Kenney’s plan would have seen Quebec receive $10.1 billion more in equalization payments over the past decade.

Kenney argues that unlike Quebec, Alberta’s resources are non-renewable and should be an exempt. Yet it was Kenney’s government that decided it would be unfair to distinguish between renewable and non-renewable resources.

Quebec is a convenient straw man for Kenney, deflecting attention from the fact that Alberta’s riches were used in averting a provincial sales tax and not saved for a rainy day. Oil production was unwisely increased without the infrastructure to deliver it to market –a remedy my pipeline, the “people’s pipeline,” is about to resolve with construction under way.

Quebec’s budget surplus has to do with taxes –Quebec’s tax rates are 30 per cent higher than the Canadian average, whereas Alberta’s are 30 per cent lower. Kenny doesn’t have the courage to address Alberta’s real tax problem: no provincial sales tax.

Alberta’s wealth is, in part, the result of my tax dollars being pumped into the oil and gas industry. The feds recently announced a federal aid package for Canada’s oil and gas industry amounting to $1.6-billion.

As an author of the current formula, Kenney knows that the equalization is fair and yet he prefers to whip Albertans into a frenzy of retaliation and separation.

Re-humanizing work

Machines do many things better than humans –except at being human.

image: This Caring Home

Advances in technology have always generated anxiety. Workers during the Industrial Revolution of the 18th century thought they would go “the way of the horse.” Steam-powered tractors had replaced horses and they feared, with spinning frames and power looms, that they were next.

The fear of job-loss due to automation is unavoidable. However, humans are better at “empathy jobs” and that’s where the future of work is heading.

A recent report from Canada’s Brookfield Institute studied Canada’s labour market and found that 42 per cent of Canadian occupations are at high risk of automation in the next 10 to 20 years (Working Without a Net: Rethinking Canada’s Social Policy in the New Age of Work from the Mowat Centre.)

The jobs most at risk are in the trades, transportation, equipment operation, natural resources, agriculture, sales and service, manufacturing, utilities, administration, and office support.

Some of these jobs in the trades, often done by men, are mind-numbing and dangerous –in locations isolated from families that lead to alcoholism, self-medication of drugs, and death from drug overdoses (the trades are over-represented in  fentanyl deaths in B.C.). Other than good wages, these are jobs that won’t be missed.

Jobs at the least risk are in arts, culture, recreation, sports, management; professional positions in law, education, health and nursing. We won’t see robots playing hockey or robot actors on the stage any time soon. Humans are still the best at jobs where the human touch is necessary like health care, child care, and care for the growing number of seniors.

However, not all empathy jobs pay equally. While some jobs are well-paid because they are unionized -such as teachers and health care workers- others like private child-care facilities are not. Some work, usually done by women, such as a daughter caring for her aging parents or a grandmother caring for grandchildren, is not paid at all.

Another source of job-growth is the hybridization of machines and humans. In the gig economy of piecemeal work, technology directs workers. Some workers like these hybrid jobs because they offer flexibility. Employers like them because workers are “contractors” not employees. As such, companies don’t have to pay benefits.

Britain is making changes to the working conditions of workers in the gig economy by ensuring that “vulnerable workers,” as defined by low wages, have access to basic holiday and sick pay.

Workers in low-paid empathy jobs and workers in the gig economy are in the same predicament –low wages with few benefits. That’s where the Canadian government could help with programs like employment insurance, sick leave and universal Pharmacare.

Investments in childcare and home care for seniors would not only employ more empathy workers but improve the conditions of all low-wage workers including those in the gig economy.

Governments stepped in during the Industrial Revolution to implement labour laws. Governments must step in now to strengthen programs to ease the transition into the digital economy.

Surely the things we value, like human interaction, can pay as well dangerous works like resource extraction. Surely workers the gig economy can have both flexibility and security.