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432-00533 (Economy and finance)

Paper petition

Original language of petition: English

Petition to the House of Commons

We, the undersigned citizens and residents of Canada, draw the attention of the House to the following:

Whereas, all of Canada's Premiers have called on the Government of Canada to remove the per capita cap on fiscal stabilization payments.

Whereas, in the 2020 Fall Economic Statement, the Liberals increased the per capita limit on fiscal stabilization payments to $170 from $60. This cap had not been changed since 1987.

Whereas, all provinces have received stabilization payments at one time or another. Since 1987, there have been 18 stabilization payments totaling nearly $2.6 billion. In 4 instances payments were capped by the $60 per capita limit.

Whereas, the Government of Alberta was requesting an additional $2.4 billion for fiscal years 2015-16 and 2016-17 when its revenue fell by $8.8 billion, or $2,114 per capita. This reflects the $2.9 billion that would have been paid without the cap, less the $500 million Alberta received with the $60 per capita cap.

Whereas, for fiscal year 2020-21, based on current revenue projections, Alberta would have qualified for an estimated $3 billion if there was no stabilization cap, but will now only receive about $750 million with the new $170 cap. This is a difference of $2.25 billion.

Whereas, without the cap, Alberta should be eligible for $5.9 billion in fiscal stabilization payments over the last five years, but will only receive $1.25 billion, a difference of $4.6 billion.

Whereas, the new Liberal fiscal stabilization cap of $170 per capita is a half-measure that does not go far enough to address the unfairness of fiscal stabilization payments.

We, the undersigned citizens of Canada, call upon the Government of Canada to remove the $170 per capita cap on the fiscal stabilization fund, pay the Province of Alberta the $4.6 billion it would have received without the cap, and establish fairness in federal fiscal stabilization payments.

Response by the Deputy Prime Minister and Minister of Finance

Signed by (Minister or Parliamentary Secretary): The Honourable Chrystia Freeland

The Fiscal Stabilization program was created to provide financial assistance to provinces that are facing significant declines in their revenues resulting from extraordinary economic downturns.  The program provides financial help to any province faced with a year-over-year decrease of more than 5 per cent in its non-resource revenues or of more than 50 per cent in its resource revenues, with adjustments for interactions between the revenue sources.  Payments are currently capped at $60 per person for a given fiscal year. 

The Fiscal Stabilization program was last reviewed in 1995 and, following calls from provincial and territorial governments and academics for the program to be modernized, the federal government is proposing reforms as announced in the Fall Economic Statement 2020.

Specifically, the federal government is proposing to index the maximum payment of $60 per capita, which was set in 1987, to Canadian economic growth per person since that time.  This means that the cap would nearly triple to about $170 per person in 2019-20 and 2020-21, and would grow thereafter in line with Canadian economic growth per person.  In years when the economy declines, the cap would remain at its preceding year’s level.  The Minister of Finance would retain the discretion to extend interest-free loans for eligible revenue declines above the cap, if requested by a province.  In addition, the federal government is proposing technical changes to modernize and simplify the program.    

The higher cap would apply to 2019-20 Stabilization claims and onward and could provide billions in additional support to provinces for revenue declines experienced in 2020-21.  For Alberta in particular, the maximum payment for 2020-21 is projected to rise from $265 million to $752 million as a result of this change.  These changes would make the Fiscal Stabilization program more generous when provinces need help the most.

The Government recognizes that energy-producing regions are facing the compounding challenges of COVID-19 and the shock to oil prices.  The federal government has announced significant funding to assist oil-producing provinces, including:

  • $1 billion to Alberta;
  • $400 million to Saskatchewan;
  • $320 million to Newfoundland and Labrador; and
  • A fully-repayable loan of $200 million to the Alberta Orphan Well Association, to clean up orphan and inactive oil and gas wells. 

In addition, the federal government is providing support to conventional and offshore oil and gas companies through the Emissions Reduction Fund.

Presented to the House of Commons
Tom Kmiec (Calgary Shepard)
February 23, 2021 (Petition No. 432-00533)
Government response tabled
April 12, 2021
Photo - Tom Kmiec
Calgary Shepard
Conservative Caucus
Alberta

Only validated signatures are counted towards the total number of signatures.

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