Federal Transfers per Capita in Alberta, 2010-2019 Analysis
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Federal Transfers, Alberta, Canadian Health Transfer, Canadian Social Programs Transfer, Fiscal Federalism, Equalization System
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Abstract
This document provides an in-depth analysis of federal transfers per capita in the province of Alberta between 2010 and 2019. The study examines the impact of the Canadian Health Transfer and the Canadian Social Programs Transfer on Alberta's revenue and expenditure. The findings reveal a significant increase in federal transfers, particularly in the health sector, and shed light on the province's unique position within the Canadian fiscal federalism system.
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[...] It is the amount of federal support to Alberta between 2010 and 2020. As has been the practice since the signing of the Decennial Plan to consolidate health care in 2004, federal support is here broken down into three main components: - The Canadian Health Transfer (CHT). According to the Finance Ministry website, this transfer 'provides predictable long-term funding for health care and supports the principles of the Canadian Health Act, the universality, comprehensiveness, transferability, accessibility and public administration2. - The Canadian Social Programs Transfer (CSPT). [...]
[...] Figure 2 Federal Transfers per Capita, Province of Alberta, 2010-2019 Source : Ministry of Finance, Federal Transfers to Provinces and Territories, https://www.fin.gc.ca/fedprov/mtp-fra.asp (accessed November 10, 2019) At the end of this analysis, two conclusions are possible. First, it is true that the province of Alberta receives no funds from the federal equalization system, even though it finances it via federal taxes paid. From this point of view, it appears as a 'loser' compared to this system. This is why, equalization is regularly criticized within the province. [...]
[...] The last reform of the federal equalization formula dates back to 2007, but this has not changed the situation for Alberta. From this point of view, one could say that it is a loser compared to the federation: it finances it more than it receives. Another approach to these federal transfers is to express them not in terms of level as in Figure but in relation to the population. Figure 2 thus presents federal transfers per capita for the province of Alberta between 2010-2019. [...]
[...] Between 2013 and 2017, Canadian health transfers increased by nearly 84.5%, from $2,337 million to $4,213 million. A significant increase in these transfers took place particularly during the 2014-2015 fiscal year with the entry into force of the new calculation formula. The transfers on this occasion were multiplied by 1.5. Alberta emerges as the big winner from this change: the new formula, which replaces the one introduced in 2004, no longer takes into account income or the aging population, but only the number of inhabitants.3. [...]
