In the wake of the First Ministers’ meeting last week, we’re still seeing a lot of narratives in the media about how the prime minister hasn’t yet taken any steps to help the province in the short term – a take that is ignorant because it fails to comprehend what the situation about the price differential is. At its core, it’s a supply and demand problem, with too much supply and not enough demand, which drives prices down. Nothing the federal government can do will fix that in the short term. Buying rail cars is medium-term at best, but may simply being throwing money away given that once the Line 3 pipeline is up and running, it’ll outstrip the capacity of those trains right away – and I can’t stress enough that we are again in the midst of a global supply glut, so putting more product into a full market isn’t going to help matters.

And while this happens, we see more nonsense like this column from former Alberta MLA Donna Kennedy-Glans, which incoherently rambles about Trudeau not respecting the nation and inciting Western alienation. Which is ridiculous, because there is not a single fact in the piece, nor is there any suggestion of anything Trudeau could do about Alberta’s situation. It’s just angry flailing. Part of the problem that people – and Albertans especially – keep ignoring is that what’s happening with their prices right now is the result of decades of structuring their oil export market on the assumption that the Americans would be perpetual customers, which didn’t see the shale oil revolution that upended those assumptions, and they haven’t managed to pivot to overseas markets on a dime because obviously pipelines take a long time to build, and people don’t necessarily want them going through their backyards. It’s hard to blame Trudeau for that – any prime minister (or premier for that matter) would have a hard time dealing effectively with this state of affairs, and no, carbon taxes have nothing to do with this situation, nor does the desire to change environmental assessment legislation, because the current system isn’t working either. But Albertans – and I speak as one – both tend to be allergic to self-reflection (recall how they recoiled at Jim Prentice suggesting they take a look in the mirror, and elected Rachel Notley as a result), and a they like to blame Ottawa for their problems – especially if there’s someone named Trudeau in charge. We should be better than this.

https://twitter.com/aradwanski/status/1071506885877133312

Meanwhile, the Globe posted a nonsense story about equalisation – again – in that Quebec still gets it while Alberta is in a deficit, and I can’t even. You would think that a national newspaper could get the basics of equalisation right, but apparently not. To remind the rest of us: Equalisation is about fiscal capacity, not your province’s budget balance. Provinces don’t sign cheques over to have-not provinces, but rather, this is all money that comes from income taxes. The reason Alberta pays more is because they have the highest incomes in the country. Grievance politics, along with lazy reporting that confirms narratives rather than challenges them is largely what keeps this myth alive, and it should be stamped down.

This is *extremely* unhelpful for public understanding. Quebec receives equalization payments because it has relatively low incomes. "Quebec to receive $1.4-billion equalization boost while oil-producing provinces face deficits" https://t.co/ftK1vE0Kyh

— Stephen Gordon (@stephenfgordon) December 10, 2018

Equalization isn't about budget deficits or surpluses. It's based on fiscal capacity. Suggesting the former link encourages misunderstanding. https://t.co/hr0FY3Udor

— Andrew Leach (@andrew_leach) December 10, 2018

BECAUSE WE'RE POOR.

Jeebus. People really don't understand what equalization is about, because the media's take is invariably to throw up its hands and say "math is hard" instead of taking the time to explain it. https://t.co/CsTWNygSx5

— Stephen Gordon (@stephenfgordon) December 10, 2018

Sadly, despite our best efforts, we have been unable to find 800 billion barrels of oil. https://t.co/ihfO18qyKt

— Stephen Gordon (@stephenfgordon) December 10, 2018

If oil-producing provinces took their pubic finances seriously, and didn't say "to hell with budget constraints, let's just take $$ from the resource money tree", then they wouldn't have deficits, either.

— Stephen Gordon (@stephenfgordon) December 10, 2018

Imma just leave this here for all the lovers out there who don’t think Quebeckers pay their tab. pic.twitter.com/2UwUDD0OSq

— Les Perreaux (@perreaux) December 10, 2018

Good reads:

• Justin Trudeau had a wide-ranging interview with Rosemary Barton (transcript here), including what he’s doing to lift those steel and aluminium tariffs.
• Bill Morneau is meeting with his provincial counterparts to talk trade and competitiveness.
• Dominic LeBlanc is throwing some shade at the premiers challenging the federal carbon tax, saying that it’s not a climate plan.
• Despite the tinfoil hattery of Andrew Scheer and Maxime Bernier, Canada will sign onto the UN compact on global migration today.
• Trade officials from BC have cancelled their trip to China following the arrest of Huawei’s CFO.
• Elon Musk has mused about buying soon-to-be closed GM plants to assemble Teslas in, but who knows if that’s serious or not.
• The Peace Tower elevator has been breaking down with increasing frequency, sometimes trapping tourists inside.

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