Conservatives pitch fiscal reform to end 'mistreatment of Western Canadians'

Conservative Leader Erin O'Toole says his party would revamp the country's fiscal stabilization program in what he calls a "first step to end the mistreatment of Western Canadians."

The announcement in Calgary comes one day after the Prime Minister was in town announcing final approval of a massive transit project in the city and taking shots at rivals. It's a sure sign the parties are in election mode.

"Even as Alberta's economy suffered with massive reductions in resource revenues, Albertans continued to pay more than their fair share to support the rest of the country," O'Toole said in a release on Thursday.

"That's why a Conservative government will fix the Fiscal Stabilization Program as a first step to ensuring that Western Canadians are treated equally in our confederation."

The fiscal stabilization program is intended to shore up provincial finances when there is a sudden drop in revenue. 

The Conservative plan includes:

• Removing the per person payout cap, which was recently raised from $60 to $170. 
• Lowering the threshold for payouts from a five per cent decline in revenue to a three per cent decline. 
• Lowering the threshold for a payout from a drop in resource revenue from the current 50 per cent to 40 per cent. 
• Making all the changes retroactive to 2015.

The proposal would give Alberta $4 billion in rebates, according to the Conservatives, leaving $1 billion for the rest of the country.

The point of the program

The issue of fiscal stabilization has been a persistent source of complaint for the current Alberta government, which has argued the formula needs to be revisited. It says the province has lost out on billions of dollars of revenue as the price of oil plummeted and the government's bottom line went with it. 

Recent changes introduced by the governing Liberals failed to satisfy the province.

Fiscal stabilization is one of the factors that led to the creation of Alberta's "fair deal" panel, which made recommendations on everything from the province establishing its own police force and pension fund, to holding a referendum on equalization payments within the federation.  

"Today our country is facing a national unity crisis," O'Toole said at an afternoon news conference. "A crisis fuelled by Justin Trudeau and his government's disregard for Western Canadians here in Alberta.

Equalization vs. stabilization 

What O'Toole mostly avoided was any talk of equalization payments, arguably a more central sticking point for Alberta's conservatives. He only said a Conservative government would make the process more transparent and more fair. 

Duane Bratt, a political scientist at Calgary's Mount Royal University, said that's likely on purpose. 

"It doesn't address equalization, so it's a way of talking about equalization without talking about the referendum, because he doesn't want to touch that with a 10-foot pole," he said, of the referendum proposal from Alberta's provincial government. 

Bratt points out that the stabilization program is just that, a program, but equalization is written into the constitution. 

Support for energy industry

It wasn't just the fiscal stabilization program the opposition leader was pitching on Thursday. 

O'Toole said the Conservatives will be putting more energy into supporting the oil and gas industry, lifting the tanker ban on the B.C. coast, making changes to environmental impact assessments and establishing a national LNG export strategy. 

"As Albertans, I don't need to tell you that the parties on the left want to phase out the energy sector and the hundreds of thousands of Canadian working families who depend on it," he said.

"Conservatives will treat the energy sector as a key driver of Canada's economy and leverage our global environmental and social governance leadership as a competitive advantage to secure our future."

Conservatives have consistently won a majority of seats in Alberta and the province is considered the heartland for the conservative movement in Canada. 

Lately, however, some cracks have started to show in that dominance. United Conservative Party Premier Jason Kenney has been languishing in polls alongside the federal leader. 

"I'm very proud of our team here, and I think we will not only hold our seats whenever an election comes, we're going to go after the last one," O'Toole said when asked about his chances in Alberta. Currently, the Conservatives hold 33 federal seats in Alberta and the NDP holds one. 

When asked why he believes the Conservatives will gain more support in Alberta, O'Toole said: "Because I can't see anyone living in this province that hasn't seen the attack on Alberta's prosperity, on its way of life, that has been conducted by Justin Trudeau from his first minutes in office."