Ottawa grants Kenney’s wish by ramping up fiscal stabilization program
Ottawa will index its fiscal stabilization program to national GDP growth and nearly triple its per capita payout rate.
The federal government’s fiscal update, released Monday, contains a section on “modernizing” the fiscal stabilization program, which provides aid to provinces if their economy declines.
The per capita funding rate of $60 will jump to $170, which the feds say brings it in line with GDP growth since its last update in 1987. Needy provinces can claim that rate starting with the 2019-20 fiscal year.
Premier Jason Kenney has long called for reforms to the fiscal stabilization program, which was utilized by Alberta to the tune of $503 billion after the oil price crash of 2015. He has asked Ottawa for $2.4 billion in retroactive payments and for the per person cap to be scrapped.
The economic update also makes changes to allow “tax points” from federal transfers to be accounted for in provincial revenues that are eligible for stabilization. That means, beginning in 2021-22, more of the province’s money pot can be backstopped by the program.
Kenney campaigned on pushing Ottawa to make that change (although the Fair Deal panel later recommended against it, stating it would lower federal transfers and make Alberta more reliant on its volatile tax base).