Cut spending, MP warns province

April 19, 2009

By Renata D'aliesio And Sarah McGinnis, Calgary Herald

As Premier Ed Stelmach continues lobbying for$700 million more in federal transfer payments, Calgary West MP Rob Anders warns all governments--including Alberta -- need to keep their own spending in check during the economic downturn.

Stelmach said the province is making progress as it argues its case for more health transfer dollars from Ottawa.

Finance Minister Iris Evans has spoken with her federal counterpart, Jim Flaherty, about the 10-year Canada Health Transfer agreement signed in 2004.However, the premier conceded, "We may have a difference of opinion in how we read the text of it."

Alberta is seeking an additional $700 million a year in health transfer money. Under the federal-provincial agreement, Alberta receives about $200 less per resident than most other provinces because of its strong tax revenues.

"We can't carry the country," Stelmach said recently in Edmonton. "All we're asking for is respect and saying an unemployed family is equally unemployed in Alberta as they are in the Maritimes and they should be treated equal when it comes to health."

Alberta isn't alone in having to make tough calls to bring its budget in line with the new fiscal reality, Anders said Saturday.

When asked about Stelmach's efforts to increase Alberta's health transfer payments from Ottawa, Anders would not comment on whether the federal government would provide more funding for the province.

He acknowledged the transfer payment formula is skewed to what provinces collect in corporate tax revenue. This allows some provinces to lower their corporate taxes and appear more in need, Anders said.

But noting Alberta's$2-billion deal to resolve the Alberta Teachers'Association pension liability, Anders said all levels of government should be wary of their own spending habits.

"You need to be careful and make sure you are not making program and spending commitments that will put any government in some form of jeopardy when it comes to staying within its basic budget," Anders said.

Alberta officials assert the quest for higher health transfer payments is about equity, and not addressing its $4.7-billion deficit.

In its 2007 budget, the Harper government pledged to draft a more equal health transfer formula by 2014-15.Alberta, though, has been aggressively pressing for swifter changes since the 2009 federal budget, delivered in January.

That budget raised Ontario's transfer payments to $745 per person because of the province's weakened economy and diminished tax revenues. Alberta receives $542 per capita.

"Ontario has been treated the way it has because Ontario has become a have-not province," said Bart Johnson, spokesman with Alberta Finance.

"Our issue is we should be treated fairly--have or have-not."

Evans will raise the topic with Flaherty when finance ministers gather for a meeting next month. Johnson said

Calgary Centre MP Lee Richardson said Saturday he wasn't surprised to learn Alberta's premier was lobbying for additional federal dollars.

"It's a tough economic time for everybody right now," Richardson said. "I'm sure the dialogue(between federal and provincial governments) will continue."