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Something useful for the premiers to talk about: The right's perpetual myth making about equalization

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Edmonton's Macdonald Hotel

Since it's meeting in Alberta this week, something the "Council of the Federation" could profitably use its national pulpit to tackle is the constant myth-making and outright lying by cynical right-wing politicians and their echo chambers in media and thinktankery about Canada's equalization programs.

After all, unchallenged, some of this nonsense constitutes an actual threat to the long-term wellbeing of the federation, so this would thus be useful work for the premiers and their staffs who make up the body formerly known as the annual summertime premiers' clambake and beanfest.

Won't happen, of course, if only because at least one of the worst offenders for this kind of thing is a member of the Council, and as is the way of such things, Saskatchewan Premier Brad Wall will inevitably have to be treated with consideration he doesn't deserve. Goes with the office, don't you know?

The premiers might while away their hours in Edmonton's stately old Macdonald Hotel talking about pipelines -- which would probably suit both Alberta premier Rachel Notley and the officially unrepresented federal government of Prime Minister Justin Trudeau -- but not much useful is likely to be said about that topic since B.C.'s new NDP premier, John Horgan, diplomatically won't be there.

By accident or design, Horgan isn’t being sworn in until tomorrow, and will thus be conveniently tied up picking a cabinet for a few days, so no-one from pipeline-skeptical British Columbia is likely to be along, thanks very much.

Instead, we'll get the usual anodyne platitudes associated with these efforts as the premiers talk, as Notley recently promised, about Canada’s economic relationship with our unbalanced next-door neighbour while every one crosses their fingers U.S. President Donald Trump won’t be inspired to send out a midnight Tweet on the topic. Sad!

Which leaves us with the right's persistent fairy tales about equalization -- a topic that should be of obvious interest to Canada's premiers in congress -- which have been in the news again lately thanks to the Fraser Institute, the prolific Vancouver-based producer of press releases purporting to show, despite vast evidence to the contrary, that market fundamentalism is the best way to organize society.

As always with the Fraser Fables the organization (funded in part by far-right U.S. billionaires like the notorious Koch Brothers) sends out, the group's latest effort, which makes the claim that Alberta gets back less in transfer payments than it contributes to Ottawa, has been generating lots of ink and its virtual equivalent here in Alberta.

"Canada loves Alberta’s money," shouts a typical headline in one of Postmedia's foundering newspapers. "Study shows without our province's transfer payments, the federal deficit would have been double."

Actually, that isn't quite what the Fraser Institute "study" says . But it is, arguably, the impression its authors intended to convey.

Typically, Fraser Institute reports quote reliable statistics accurately enough, but cherry pick which facts and time-frames to use, and then, if all else fails, reach conclusions unsupported by the facts in press releases they send out by reams to credulous and lazy journalists.

So an educated reader who understands at least the general outline of how Canada's equalization program works, reading the Postmedia headline, might ask, "How can this be? Ontario and Quebec both contribute more to equalization than Alberta."

This is because the federal government pays for constitutionally enshrined equalization and other transfers out of tax revenues contributed by all Canadians, and those two provinces are more populous. Alberta doesn't write a cheque to other provinces. Nothing goes to equalization from revenues collected by Alberta. Never has. You can read a simple explanation here by the Parkland Institute's Ricardo Acuna of how this works.

In this case, if you parse the Fraser's factoids carefully, you can see what they're up to: "… Between 2007 and 2015, Albertans contributed $221.4 billion more revenue to federal coffers than they received in federal transfer payments and services," the report says.

So while the Fraserites have (presumably intentionally) given the impression they are comparing equalization transfer payments from Albertans to equalization transfer payments to Albertans in the short period from 2007 to 2015 (presumably the best time frame to get the conclusions they wanted), they in reality seem to be comparing all federal transfers in with such transfers as contributions to the Canada Pension Plan, taxes on jobs with average higher pay than in some regions, GDP growth, job creation, and capital formation by business. They’re also not, presumably, calculating more general federal "services," such as the value to all of us of national defence.

Taken far enough, this would be a little like concluding British Columbia and Prince Edward Island contribute more to Confederation than Alberta because they have nicer ocean views.  

In other words, the Fraser Institute appears not just to be comparing apples and oranges, but apples and pomegranates, bananas, gooseberries, nectarines, breadfruit, saskatoons and, for all most of us can tell, frozen Martian dustberries, all of them cherry picked from eight years plucked from the ether.

I say "appears" because I’m not going to waste my time making a serious effort to crunch their numbers. We're all suffering from Fraser Fatigue with the stream of intentionally misleading drivel this group produces. I'll leave that work, which can be a time-consuming process, to the real economists. As usual with Fraser Facts, though, if you just gently tug the string, the whole sweater immediately starts to unravel.

What the Fraser Institute appears to be up to in this case is making a case to build pipelines from Alberta through other parts of Canada -- in particular B.C.

"Having shown how important it is for Canada to have a strong Alberta, we itemize a number of actions that governments across the country can take to help improve Alberta’s prospects for a strong recovery," the Fraser Factotums write. "These actions include: refusing to obstruct the construction of needed energy infrastructure …" Yadda-yadda. (Emphasis added.)

So chances are good, in this particular case, Notley's NDP government didn't even mind this line of argument -- although I would suggest from the NDP to accept the help of the Fraser Institute is a bit like taking a lift from a friendly alligator across a flooded creek.

So if the Councillors of the Federation (viz., the premiers) want to do something truly useful this week, they could think about funding a non-partisan Fraser Fact Check body to publicly verify the claims made by the plethora of so-called think tanks that exist to misdirect and confuse political discourse.

Don't hold your breath waiting for this to happen.

The premiers meet from today until Wednesday. The hotel is named for the prime minister of the same name.

This post also appears on David Climenhaga's blog, AlbertaPolitics.ca.

Image: Wikiemedia Commons

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