Smith slams Ottawa for siphoning $25B from Alberta annually

Smith tore into Ottawa at a town hall, targeting the federal government for draining up to $25 billion annually from the province through tax transfers to prop up Liberal strongholds like Quebec.

Alberta Premier Danielle Smith tore into Ottawa at a town hall in Fort McMurray on Tuesday, targeting the federal government for draining up to $25 billion annually from the province through tax transfers to prop up Liberal strongholds like Quebec at Alberta’s expense.

Each section of the night was dedicated to answering a specific question. While one participant tried to take things off track during the equalization section, arguing that there are too many students in each class, Smith explained the real issue — Ottawa overtaxing Alberta.

“Our program costs are 70 per cent of all tax dollars. We only collect 40 per cent. Ottawa collects 60 per cent. And then they use political means to transfer it,” said Smith. “Alberta, year after year, has $20 to $25 billion that is siphoned out of our system to go to Ottawa so that it can be spent mostly in Quebec, but also in other places that vote Liberal.”

Economist Trevor Tombe, one of the evening’s panelists, noted that even small changes in how equalization is calculated could have major impacts. He explained that if Quebec’s hydro rates were just two cents higher per kilowatt, its equalization payments would fall by $4.2 billion in a single year.

Smith added that over the last 40 or 50 years, Alberta has had $600 billion taken out of the province.

“You don’t think we might be able to do a little bit more on social spending if those $20 to $25 billion stayed here? You don’t think we’d be able to cut taxes a bit if those $20 to $25 billion stayed here? It is $5,000 per Albertan that every single year gets transferred out of this province for political reasons, so that the Liberals can continue to spend it in places that vote Liberal,” said Smith.

Each section began with a video explaining the topic at hand. In the equalization portion, the video explained that Alberta has paid $67 billion into the federal equalization program since 1957, without receiving a dime back since 1965.

It also explained that Albertans voted in a referendum to remove equalization from the Constitution in 2021, but that Ottawa ignored the province.

Quebec has already proposed letting provinces keep GST revenue generated within their jurisdictions to end federal health transfers. The video narrator suggested the same logic could apply to all federal transfers.

“Less money collected and wasted in Ottawa. Less federal transfers with only a modest amount of equalization for the smallest provinces and territories that actually need it, and more funds for provincial health, education and other programs without strings attached by Ottawa’s politicians and bureaucrats,” said the video’s speaker.

Smith and the other panelists offered various suggestions for equalization reform throughout the night.

Questerre Energy president Michael Binnion added that the current formula discourages provinces like Quebec from developing their resources, citing a past premier who admitted that pursuing oil and gas projects would reduce equalization payments.

Smith said that the tables have turned nationwide.

“The conversation that the premiers are having today around the table is a 180 from where we were 12 months ago,” she said. “12 months ago, what we were talking about is how do we stop the federal government from continuing to beat us down with terrible law after terrible law? And now we have the other premiers saying, ‘Stop picking on Alberta and start addressing some of the issues.’”

One of the catalysts was Bill C-69, which Smith explained the premiers have realized shuts down resource development nationwide.

She added that U.S. President Donald Trump’s election and subsequent tariff war caused premiers to recalibrate, realizing the U.S. trade relationship is not guaranteed.

The section’s question eventually polled to attendees was “Should Alberta take a lead role in working with other provinces to reform federal transfers and equalization?”

The majority of attendees voted yes.

The Alberta Next Panels continue tonight in Lloydminster, with five more to follow in September, eventually concluding in Calgary on September 29.