Alberta Premier Danielle Smith discussed equalization reform at Tuesday’s Red Deer town hall, kicking off the “Alberta Next” tour.

“Québec has billions of dollars under their feet in undeveloped resources. Why are we giving them anything?” one participant asked. Smith replied: “Every single time I meet the Quebec premier, I remind him he has about a 200-year supply of natural gas under their feet.”

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Québec's power exports, despite narrowing provincial divides, are excluded from fiscal gap calculations. Meanwhile, a 2022 ban on new fossil fuel development exacerbated western grievances.

Danielle Smith calls on the Liberal government to provide Alberta with "the same per capita federal transfers and equalization as is received by the three other largest provinces: Quebec, Ontario and British Columbia."

The premier adds that the unfair treatment "needs to end." pic.twitter.com/bGelYx6oxj

— Rebel News (@RebelNewsOnline) May 6, 2025

During the Council of the Federation meetings in Halifax last summer, Premier François Legault justified the program to ensure "have-not" provinces receive equivalent services. He earlier vowed to wean off payments by creating wealth. 

Legault reneged on his promise, stating, "It is a complex formula to apply... There are 34 criteria that are used."

On May 5, Premier Smith announced the "Alberta Next" panel to consult residents on next steps if Ottawa doesn’t reset its relationship with her province. Smith stated, "The federal government must provide to Alberta the same per capita federal transfers and equalization as is received by … Québec.”

Smith contends that larger economies should not be beneficiaries of the program, taking aim at Québec and Ontario. "That was never the intent of equalization," she clarified, "and it needs to end."

Frustration swept through parts of Canada upon the discovery that Quebec will once again scoop up the lion's share of equalization funds—$13.6 billion out of $26.2 billion—while the Western provinces are left out in the cold.https://t.co/jVGdh3WaZm

— Rebel News Canada (@RebelNews_CA) January 9, 2025

In FY 2025/26, the equalization program will distribute a record $26.2 billion to "have-not" provinces. Québec ($13.6 billion), Atlantic Canada ($7.3 billion), Manitoba ($4.7 billion), and Ontario ($546 million) are the primary recipients.

Ontario qualified for equalization payments after the 2008 financial crisis, when former finance minister Jason Kenney stated these payments would grow annually at the national economic growth rate.

Federal equalization payments also depend on provincial revenue-raising ability.

Québec possesses an estimated 22 trillion cubic feet of marketable natural gas, reported EnergyNow Media. It also plans to phase out natural gas in residential, commercial, and institutional settings by 2040.

Alberta Premier Danielle Smith has joined the frenzy of provinces calling for Ottawa to overhaul the unpopular equalization program. The current system is broken and holds Alberta back, she contends.

READ MORE: https://t.co/485uqchYkP pic.twitter.com/RYQABE98EL

— Rebel News (@RebelNewsOnline) August 17, 2024

Last summer, Premier Smith proposed redistributing excess GDP to all provinces per capita, criticizing overcompensation for provinces that "under-report certain sources of revenue."

“‘Yeah, you can keep it in the ground, but then we’re going to assign a value as you developed it, and then we will deduct what you are owed,’” she added on Tuesday.

Economics professor Trevor Tombe, a panellist, acknowledged equalization transfer concerns but states the scale of redistribution can deceive; Maritime provinces (excluding Newfoundland and Labrador) will get higher per-capita equalization than Quebec.

Smith adds the same approach could be applied to hydroelectricity. “They sell it to their people at a subsidy,” she told participants in Red Deer. “If you choose to subsidize, that’s on you, but you can’t get that from the rest of the country.” 

Western premiers OUTRAGED as equalization payments hit record $26.2 billion

Western Canada won't see a single penny from record-setting equalization payments that have angered the region.

MORE by @WestCdnFirst: https://t.co/WRXkjC70gT

— Rebel News (@RebelNewsOnline) January 3, 2025

The Alberta government recently warned of consequences if Prime Minister Mark Carney didn't reset Ottawa's relationship with Alberta.

An omnibus parliamentary motion in 2023 quietly amended the equalization formula until 2029, drawing criticism from Western premiers over no consultations.

Smith forewarned a citizen-led referendum petition on equalization will be added to the 2026 provincial ballot if it gathers sufficient signatures, respecting the democratic process.

Premiers Smith and Scott Moe supported legal action against the program, which excludes their provinces. 61.7% of Albertans want to remove equalization from the constitution, costing them $67 billion since 1957.