Canada

Klein threatens to abandon equalization

Alberta would pull out of the federal equalization program rather than see the other provinces benefit from its oil and natural gas resources, Premier Ralph Klein said

Alberta would pull out of the federal equalization program rather than see the other provinces benefit from its oil and natural gas resources, Premier Ralph Klein said.

Klein said on Wednesday he's ready to fight with the eastern provinces to keep Alberta's resource revenues out of the equalization program, which sends federal money to poorer provinces so they can provide services such as health care.

At a meeting next month, other premiers are expected to suggest that Alberta's oil revenues can be included in the calculations that determine how much cash each province gets from Ottawa.

"This is political showdown," Klein said. "This is also a constitutional issue. Alberta has control and authorization and authority over its resources."

And he said he's willing to walk away from the program altogether.

But University of Alberta political scientist Steve Patten suggests Klein can't really do that, and his bluster won't go far among the premiers, even if it works to whip up long-standing anti-eastern sentiment among Albertans.

Equalization payments come from federal government revenues, such as federal income tax, not from Alberta's bank accounts, Patten said. Pulling out, he said, would have no effect on the program.

"When we in Alberta talk as if Alberta — perhaps the premier — sitting down and writing a cheque a couple of times a year to the poorer provinces, we're really misrepresenting what the formula is all about. That's not the way it works," he said.

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