Mr. Speaker, in June, I had the honour of asking the last question before Parliament adjourned for the summer. I asked how the government would ensure that provinces retained the revenues from carbon pricing given that if carbon pricing were included in the renewal of equalization, it would count against each province's equalization entitlement and thereby be clawed back.
The Prime Minister did not really answer this question on that day, but the next day the government clarified that it intended to renew the existing equalization program, which of course does not include carbon pricing. So it will not be clawed back, at least for the next several years. However, I must report that many of my constituents are not thrilled with the renewal of the existing equalization program. In both Saskatchewan and Alberta, there is a widespread view that the program is taking money from taxpayers in our province while we struggle to recover from the downturn in commodity prices and transfers it to provinces currently enjoying better economic times.
There have been some proposals to modify the equalization formula. One of them is to change the way in which hydroelectricity is traded. That might be a good proposal. It would certainly change the distribution of equalization transfers between recipient provinces that have hydroelectricity and those that do not. However, it actually would not make any difference to Saskatchewan and Alberta because neither province qualifies for equalization at all given that our provinces still enjoy relatively strong per capita incomes despite the downturn in commodity prices.
Another proposal we have heard on equalization is from Saskatchewan Premier Scott Moe. It is essentially a proposal to cut equalization in half and then use the other half of the money to increase equal per capita transfers to all provinces. I certainly support increasing equal per capita transfers to all provinces. I have advocated for improvements to the Canada health and social transfers ever since I was elected, but I do not believe Premier Moe's plan can really be presented as a reform to equalization itself. As well, I do not actually believe the underlying issue is that Alberta or Saskatchewan need equalization or should qualify for the program. The real issue is that our provinces would benefit from fiscal stabilization in the face of extremely volatile commodity prices.
The Government of Canada has had a fiscal stabilization program since 1967. However, it has never paid anything to Saskatchewan. In 2016, Alberta was able to qualify for $250 million under this program, but that was really a drop in the bucket compared with billions of dollars in lost resource royalties.
What I would like to submit to the House is that rather than arguing so much about equalization, what we might look at doing is improving and enriching the existing fiscal stabilization program so that it would provide much more robust support to those provinces vulnerable to volatile commodity prices. I hope this is something the government will look at as it formulates the 2019 federal budget.