Equalization Payments in Canada

July 31, 2017 § Leave a comment

Over the weekend on Twitter, I was caught up in a discussion with an Albertan who didn’t believe that the province, along with British Columbia, is forecast to lead Canada in economic growth.

She argued that the province is still hurting, that big American gas companies had pulled out, and that people were leaving Alberta.  Indeed, in June, Alberta’s unemployment rate was 7.4%, but even then, that was an improvement of 0.4% from May.  But, economic growth does not mean that one can necessarily see the signs of a booming economy.  Alberta’s economy, however, shows signs of recovery, and this 2.9% economic growth, as well as a decline in unemployment rates, shows that.

She also expressed a pretty common bitterness from Albertans about Equalization payments in Canada.  These payments might be the most mis-understood aspect of Canadian federalism.  The common belief in Alberta, which is usually a ‘have’ province (meaning it doesn’t receive equalization payments), is that its money, from oil and gas and everything else, is taken from it and given to the ‘have-not’ provinces (those who receive equalization payments).  This is made all the more galling to Albertans because Quebec is the greatest recipient of equalization payments.

This argument, though, is based on a fundamental mis-understanding of how equalization payments work in Canada.  Equalization payments date back to Canadian Confederation in 1867, as most taxation powers accrued to the federal government.  The formal system of equalization payments dates from 1957, largely to help the Atlantic provinces.  At that time, the two wealthiest provinces, Ontario and British Columbia, were the only two ‘have’ provinces.  And this formal system was enshrined in the Constitution in 1982. Section 36, subsection (2) of the Constitution Act reads:

Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

The general idea behind equalization payments is, of course, that there are economic disparities across the nation.  There is any number of reasons for these disparities, which are calculated on a provincial level.  These can include the geographic size of a province, population, the physical geography, or economic activity.

Quebec is a traditional ‘have not’, which seems incongruous with the size and economy of the province.  Montreal, after a generation-long economic decline from the late 1960s to the mid 1990s, has more or less recovered.  If Quebec were a nation of its own (as separatists desire), it would be the 44th largest economy in the world, just behind Norway. It contributes 19.65% of Canada’s GDP.  But Quebec’s economy is marked by massive inequalities.  This is true in terms of Montreal versus much of the rest of the province.  But it is also true within Montreal itself.  Montreal is home to both the richest neighbourhood in the nation, as well as two of the poorest.  Westmount has a median family income of $220,578.  But Downtown Montreal ($32,841) and Parc Ex ($34,211) are the fourth and fifth poorest, respectively, in Canada.

The formula by which equalization payments are made is based on averages across the country.  Here, we’re talking about taxation rates and revenue-generation, based on the national averages of Canada.  Provinces that fall below these averages are ‘have not’ provinces.  Those who fall above it are ‘have’ provinces.  The three wealthiest provinces are usually Ontario, British Columbia, and Alberta.  But all three of these provinces have fallen into ‘have not’ status at various points. In 2017-18, in order of amounts received, the have-nots are: Quebec, Manitoba, Nova Scotia, New Brunswick, Ontario, and Prince Edward Island.  Quebec, it should be noted, will receive more than the other ‘have-nots’ combined.  The ‘have’ provinces this year are Alberta, British Columbia, Newfoundland & Labrador, and Saskatchewan.

The equalization payments, though, are not a case of taking money from Alberta to pay for Quebec’s social programs.  The funds are not based on how much one province pays for its health care system, or for a universal child care system, or cheap tuition at the province’s universities (Quebec has both universal child care and cheap tuition for in-province students).  Rather, the funds come out of the same general revenue stream that Ottawa has to fund ALL of its programmes and services.  And, each and every Canadian contributes to this revenue stream.  Thus, the fine people of Westmount contribute more to equalization payments (and general revenue) than the middle-class residents of suburban Calgary, or a person in a lower income bracket in Saskatchewan.  And, because there are more Quebecers than there are Albertans, Quebec actually contributes more to the equalization payment scheme.

It is not just angry Albertans who believe they are getting hosed by the federal government.  Many Quebecers will rail against their province’s funding priorities and point to the province’s status as a ‘have not’ as to why it should not have these programmes.  Both positions are factually wrong, and based on a fundamental misunderstanding of Canada’s equalization payments.


Land & The Indigenous Population

June 21, 2017 § 3 Comments

Today is National Aboriginal Day in Canada.  The point of this day is to recognize the contribution of the indigenous population to Canada, as well as to reflect on the cost of imperialism and Canada’s systemic attempts to remove the indigenous population from the national landscape.  In Canada, it wasn’t as straight-forward as in the United States, where the government of President U.S. Grant and his successors used the US Army to clear the indigenous population off the Great Plains (and, of course, there’s Andrew Jackson’s Trail of Tears in the Southeast in the 1830s).  In Canada, outright violence was relatively rare, though it did occur.  Germs and disease did a lot of the work, to be fair.  As did European expansion across the continent, which affected migration patterns, and populations, of the wild life the indigenous population depended upon.  And then there were assimilative techniques, designed to make the indigenous population into good (white) Canadians.  The basic legislation covering the government’s interaction with the indigenes, the Indian Act, is the base line here.  But then there were things like the residential schools, a horror in and of their own right.

In short, Canada has historically abused and committed violence upon the indigenous population.  And it’s not like it’s got any better in recent times.

Prime Minister Justin Trudeau came into office in 2015 on the promise of fixing all the ills of Canada’s toxic relationship with the First Nations.  This was in the wake of the Idle No More movement that began in 2012.  But Trudeau hasn’t really delivered (yet, I remain optimistic), other than an inquiry into the Murdered and Missing Indigenous Women. But even that seems in danger.  More recently, Tragically Hip frontman, Gordon Downie, has become an ally of this movement.  So, for better or worse, the issue of indigenous history and indigenous rights is, at the least, on the national radar.

But twice in the past week, I have been told on social media that the indigenous population didn’t hold land in the way we conceive of land-holding and therefore, their claims to any land in Canada is null and void.  In short, as one interlocutor on Twitter said, ‘The Indians got conquered, they’re done.’ Another says that Canada was not founded by the indigenous population.

This reflects a story I read in the New York Times over the weekend about an élitist fishing lodge in Northern Quebec that is on unceded Innu territory.  There, a group of Innu delivered a proclamation to the manager of the fishing lodge that, amongst other things, demanded the land be handed back.  The Innu are essentially calling for Quebec to re-acquire this land along the Moisie River and give it back to them.  They will then grant usage to the owners of this fishing lodge, wealthy Americans all of them.  The president of the lodge, though, Donald C. Christ, a former partner at a prestigious New York law firm, however, states that, “‘I don’t think it will bring about any changes,’ he said. ‘There are many places in Canada where people are trying to undo history.'”

And this, I think, gets to the crux of the problem.  Canada as the nation we know it now is based primarily on British common law and European notions of property ownership.  Essentially, de Champlain, Cartier, et al. planted the French flag on the territory that became Canada and said this land now belonged to the King of France.  Other territories were claimed via the British in a similar manner. And, of course, the French ceded their interest in the land after the Conquest in 1760.  But, essentially, this argument states that history begins with the claiming of this land for European kings in the 16th-17th centuries.  Prior to that, there was no history of the land, legally speaking.

In essence, then, the land that comprises Canada now was obtained via sleight-of-hand and imperialism, as a foreign system of land ownership was instantly enforced, one that was incomprehensible to the indigenous population.  Not because of language barriers, though those existed, but due to cultural frameworks.

But the problem with this argument is that it’s wrong.  In 1763, following the conquest of the French territories of New France, Great Britain suddenly controlled the Eastern seaboard and the interior of North America as far west as the Mississippi.  And there were ongoing tensions in the Thirteen Colonies concerning land in the western expanses of the colonies.  Thus, King George III issued the Royal Proclamation of 1763.  Amongst other things, the Proclamation declares that the Crown must negotiate and arrange the sale of indigenous lands, through treaties, before it could be settled by Europeans.

In other words, George III recognized the sovereignty of the indigenous population of his territories in North America vis-à-vis the land.  And, essentially, this extended to the point of contact between the indigenes and the British, at that moment, the land was recognized to be in the possession of the indigenous population.

Thus, in some parts of what is now Canada, treaties were struck between the Crown and the indigenous nations.  Most famous of these are the so-called Numbered Treaties, that cover most of the land between Ontario and northeastern British Columbia.  To call these fair trades, however, is a misnomer.  The terms of treaty were usually imposed by the Crown (in right of Britain or the UK prior to 1867, and Canada after 1867).  The First Nations had only so much room to negotiate better terms for themselves.  And even after the treaties, Canada continued to whittle down indigenous land via land surrenders, some of them obtained through nefarious means.

In other parts of Canada, most notably the bulk of British Columbia, there are no treaties.   The Royal Proclamation was, in essence, ignored.  Thus, the Crown in Right of Canada, and the Crown in Right of British Columbia have, since the early 1990s, been engaged in a glacial-paced set of treaty negotiations with the First Nations of that province to settle land claim issues there.

At any rate, the claim that the advent of Canada negated the indigenous claim to the lands that now comprise the nation is fallacious.  And unlike what Christ, the American lawyer seems to think, this is not the undoing of history.  It is facing up to history and Canada’s imperialist past.

Alienation and Belonging

March 28, 2014 § 2 Comments

An old friend visited us this weekend, and as he and I drove up the Massachusetts coast to hunt down the best pizza in the Commonwealth (Riverview in Ipswich, if you’re wondering), we got to talking about New England.  Despite having lived in New England, he always feels like he could never penetrate the insularity of New England culture, and he always feels alienated here.  I found that interesting, given I don’t feel that way at all, despite obviously being a transplant.

This might be the advantage of being an Anglo from Montréal. Anglo Montrealers are always at least slightly alienated from the city and dominant culture.  We are a (small) minority, and we speak a minority language.  That isn’t necessarily a bad thing, mind you.

I’ve always felt alienated from my surroundings. I grew up in British Columbia, very aware of the fact I didn’t belong, which came out in everything from my distaste of the wet, soggy climate to continuing to cheer for the Montréal Canadiens, Expos, and, when they existed, the Concorde or Alouettes of the CFL, as opposed to my friends who cheered for the Vancouver Canucks, the BC Lions and either the Toronto Blue Jays or Seattle Mariners.  I felt similarly alienated in Ottawa.  It was only when I moved back to Montréal I finally felt comfortable in my surroundings.  But I still felt alienated from the larger culture, mostly due to language, even as my French language skills improved.

But, as with all things Montréal, it was never this simple.  My Anglo friends and family dismissed any suggestion I might be a Montrealer, by continually reminding me I grew up out west.  On the other hand, my francophone and allophone friends made no such distinction, and this is also true of my separatist friends.  Go figure.  Anglo mythology would have it the other way round.  One of the most amazing moments of my life in Montréal came during the 2000 federal election campaign when I answered a knock on my door and found Gilles Duceppe, the leader of the Bloc québécois, with Amir Khadir, who was the BQ’s candidate in my riding (Khadir has since gone on to be the co-leader of the sovereigntist provincial party, Québec solidaire, and is currently the MNA for the Montréal riding of Mercier).  Duceppe, Khadir, and I spent a good 15-20 minutes talking about place, identity, and belonging in Québec.  Largely in English.  Even the leader of a separatist party and the candidate for my riding didn’t dispute my bona fides as a Montrealer and a Quebecer (maybe, in part, because I assured them the BQ had my vote).

Since 2006, I have spent a lot of time in New England, before moving here in 2012, on account of my wife being American.  She lived in Western Massachusetts when we met, so we did our best to split our time between Montréal and Western Mass.  After all those years spending time out there, I came to feel like it was Home.  Sure, I was never going to fully fit in, be a part of the scenery, but that was ok by me.  And, even now, living at the other end of the Commonwealth, in the massive urban sprawl that is Boston, I feel similarly at home.  The ways I feel alienated here are mostly due being Canadian.  But I don’t find myself feeling excluded by New Englanders, or, really, Americans as a whole. In other words, I can deal with my alienation, it has kind of become my default way of being.

No doubt this is due to being an Anglo Montrealer and experiencing some degree of discomfort and alienation my entire life in my hometown and anywhere else I lived in Canada, tainted as I was, so to speak, by being from Montréal.

Phoenix, British Columbia: Ghost Town Reclaimed by Nature

February 5, 2012 § 14 Comments

Continuing in the vein of the Hawley Town Commons in Western Massachusetts and the changing rural landscape of Saint-Sylvestre, Québec, I present now to you the ghost town of Phoenix, British Columbia.  Phoenix is located in the Kootenay Mountains of eastern BC, not far north of the American border.

Phoenix, BC, 1912

About a century ago, Phoenix was a thriving copper mining town. It boasted modern amenities such as electricity and phone lines, there was a ballroom and an opera house. it had a stop on the stage lines that ran through the Boundary Region of the Kootenays, there was a post office and around 1900, both the Canadian Pacific Railway and the Great Northern Railway arrived in Phoenix.  In short, the town had made it. It was thriving.  But as was often the case in the mining regions of the North American west, the boom years were short.  At the end of the First World War, the price of copper dropped dramatically and the Phoenix Mine was shut down.  And the town of Phoenix died.


Phoenix Cenotaph, 1937

Phoenix First World War Cenotaph, 1937

In the 1920s, the homes and buildings were torn down or buried and there was nothing left of Phoenix, except for its First World War cenotaph, which is still there today.  Otherwise, nature has reclaimed the old town site of Phoenix, despite the operation of an open-pit mine in the 1950s, 60s, and 70s.  When I visited Phoenix about 15 years ago, I was floored by the site.  I had seen other ghost towns in BC, most notably Barkerville, a tourist site.  But many other sites I had seen were maintained to at least some degree.  Phoenix was a smallish clearing in the dense forest, and the forest was rapidly moving back in, re-claiming its territory.  The grave yard was the most fascinating location on the old Phoenix townsite.  Most of the head stones were long gone.  Many of the graves no doubt never had a proper head stone in the first place, graves marked by wooden crosses, wooden heads, or whatever was handy.  One grave, otherwise unmarked, had a furniture cabinet as a marker.

But otherwise, the grave yard had 80 year old pine trees reclaiming their territory, encouraged by the heavy fertiliser in the soil in the form of decomposing human bodies.  (Since my visit, residents of nearby towns have sought to restore the graveyard some, restoring the headstones that do exist).  What struck me the most about standing in the Phoenix cemetery, though, was not so much the dilapidated headstones, the cenotaph in the distance, or the trees.  It was the black bear about 500 metres away, happily munching away on some berries.  It was also the bear that convinced us to get back in the car, slowly and quietly, and get the hell out of there.


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