Sunday, November 3, 2019

What Kind of New Deal Does Canada Need?

I.                   Dissatisfaction of Western Canada
1.      Saskatchewan
Saskatchewan Premier Scott Moe wrote an open letter to Ottawa demanding the cancellation of carbon tax, the federal government’s commitment to negotiate a new equalization formula as well as commitment to promote oil exports for SK and AB.

2.      Alberta
Though 70% of Albertans love to be and are proud of being Canadians, 71% think Alberta is not treated with the respect it is deserved, and more than 30% think they will be better off as a country. Former northeastern British Columbia Conservative MP Jay Hill said the present federal government was an illegitimate government elected by Ontario, and Jason Kenny the premier would like to fight for fairness (see below the tables of election results) in Canadian Constitution and make Alberta great within Canada with a better deal and bigger changes[i]. On Facebook, the “Wexit Alberta” page reached 28,000 likes and “Vote Wexit” page 250,000 likes by Friday.[ii].

Table 1: Conservative Seats in Western Canada

Total MP Seats
Conservative Seats

Table 2: Liberal Seats in Eastern Canada

Total MP Seats
Lberal Seats

II.                Reasons for Dissatisfaction
1.      Political Inequality
The way the Confederation is set up favors Eastern Canada with most seats of MP given to ON and QB. As shown above, the total seats of Western Canada are still fewer than Ontario.

2.      Economic Inequality
Every Alberta man, woman and child contributed $5,147 to the rest of Canada. Ontarians each contributed $1,179; British Columbians, $1,162; and the good folk from Saskatchewan each gave $323, with Quebec the overall largest provincial recipient of equalization. It is asserted that every year $20-25 billion more are pumped net into other provinces in the form of health care transfers, social transfers, and equalization transfers, with nearly 50% given to Quebec[iii].

3.      Other Issues
1)      Administrative Monopoly
There are many areas that government controls but tend to lose efficiency and charge a consistently and increasing high price. These areas include but are not limited to: electricity, natural gas, water and public transportation (such as aviation).

2)      Special Interest Groups
(1)   Milk Capitalists
Milk capitalists have acquired consistently a high price and a high profit by controlling the market and deterring the US milk suppliers from entering the market. It is noticed that one major reason Maxime Bernier lost his MP seat is due to that his platform has angered the milk capitalists in addition to the fact that a marketing company was paid to destroy the image of the People’s Party.

(2)   Labor Unions
Due to its legitimacy, political correctness and its strong organization structure, this mass organization is said to have kidnapped the society and the government, and high wages and high benefits have scared away investors and caused the shortage of workers in buses and hospitals.

(3)   People on Welfare Deliberately
While refugees can take high subsidies living in hotels, while drug takers can get drugs free in stations built for them and take cheques regularly, new immigrants and small business owners can hardly make ends meet. CBSA said that since April 2017, only 398 of the 32,173 illegal immigrants have been deported since April 2017[iv].

3)      Subpar Productivity
It is note that the gap in productivity between an average Canadian and an average American has jumped from 17% 20 years ago to 100% now. “The Canadian sector is struggling with subpar productivity, with ramifications that promise slower growth and a declining standard of living for Canadians in the absence of renewal.” What the country needs, is a focus on the four Cs: capital availability, competition, connectivity and technological complexity[v].

4)      Debt
In Canada's case, household debt is around 170 per cent of disposable income. In other words, the average Canadian owes about $1.70 for every dollar of income he or she earns per year, after taxes[vi]. Government Debt in Canada increased to an all time high of 671.25 CAD Billion in 2018 from 651.54 CAD Billion in 2017[vii].

III.             Possibility of Independence for Alberta
First, Alberta would need a political movement pushing a political party, presumably the ruling party, to hold a referendum vote on separation. But before that referendum was put to the people, the House of Commons would have 30 days to determine whether the question on the referendum ballot was “clear.” According to the Clarity Act of 2000, members of Parliament would also consider “whether the question would result in a clear expression of the will of the population” regarding separation.

Then the province could hold the referendum.

Once the vote was in, the House of Commons would look at the referendum results to determine whether there is “a clear majority of the population of that province.” This would not only take into account the vote for and against, but also the voter turnout.

After all that was completed, negotiations to amend the Constitution allowing Alberta to separate would begin[viii].

According to Emmett MacFarlane of Waterloo University, secession on economic grounds wouldn’t likely get international acceptance.

IV.             How the Federal Government Could Treat the West
While it is difficult for the west to be independent, the western provinces have the political force to unite together, and if Aboriginal people can also be united, an economic separation could be very likely.

As AB has oil projects affecting everywhere in Canada to end the awkward price situation that we lose on both ends of oil products, as AB is the largest contributor to the national economy, Ottawa needs to listen to AB.

V.                Changes Needed
As international capital is deterring Western Canada from setting up oil processing facilities, Western Canada needs to get united. It needs to carry out free trade first with a free flow of materials, labor, capital, entrepreneurship and technical know-how.

Secondly, all administrative monopolies need to be removed so as to encourage competition, which may bring forth both a reduction in cost and a comparative advantage for businesses with expertise.

Thirdly, capital and technology need to be introduced from other countries both to break the economic deadlock and to raise the industry benchmark.

Fourthly, a fair and even distribution is necessary so as to reward the diligent, the innovative, the efficient and the effective. The interests of those special groups should be restrained if they harm the whole society.

VI.             Conclusion
There are reasons why Western Canada is dissatisfied, Ottawa needs to listen to their voice and find ways to correct the problems.

[i] Carolyn Kury De Castillo: New Alberta separation group meets in Calgary: “It’s time to take control”, Global News, 10 Aug 2019.
[ii] Adam Toy: This way to ‘Wexit’: Navigating Alberta’s theoretical secession, 25 Oct 2019,
[iii] Licia Corbella: Quebec gets $1.4B more of our money; in return, Alberta gets kicked. Calgary Herald, 18 Dec 2018, please also take time to view the article by clicking the link; Interview with Mount Royal University Professor David Taras, 10 January 2019.
[iv] The Dead Canadian Economic and Social System (in Chinese), Teacher Zhang Living Overseas, 28 Oct 2019.
[v] Andrew Willis: Canada faces a serious productivity problem, 1 July 2018.
[vi] Stephen S. Poloz: Canada’s Economy and Household Debt: How Big Is the Problem? Bank of Canada, 1 May 2018, please also take time to view the article by clicking the link
[viii] Adam Toy: This way to ‘Wexit’: Navigating Alberta’s theoretical secession, 25 Oct 2019,

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