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Colby Cosh: Alberta will be getting more money from Ottawa. But it’s not happy about it

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EDMONTON — Prof. Trevor Tombe’s name comes up in my column from time to time. And with good reason. The University of Calgary economist has become a pivotal figure here in Alberta for his ability to leap, catlike, on emerging policy issues at a moment’s notice. On Tuesday he published a short discussion of the federal government’s new changes to its fiscal stabilization program, a form of insurance for provinces that experience a sudden decline in revenue.

For the current fiscal year, because of the pandemic, that will be most everybody. The four largest provinces, along with Saskatchewan and Newfoundland, are all expected to qualify for extra stabilization transfers. Generous Ottawa! Bountiful Ottawa, sweet mother of the federation!

But please make sure you are seated before you read these shocking words: Alberta isn’t happy. The history of the program, as Tombe outlines it, rather goes to demonstrate why Alberta has a slightly cranky relationship with the dominion. Stabilization was introduced in 1967 as part of the mid-century project of systematizing fiscal transfers to the provinces, which had always been handled informally and in an ad-hoc way. It’s like a younger brother to equalization payments. The original deal was that if any province’s overall tax revenues fell by more than five per cent in a year, Ottawa would cover the losses above that five per cent.

The “deductible” was lifted in the orgiastic spending environment of 1972; this seems like plain madness now, but economic growth rates were higher then, and an actual decline in a province’s revenues was an even rarer phenomenon than it is now. Changes in the program since that time have had the effect of disadvantaging Alberta, whose oil- and gas-dependent public revenue is relatively volatile.

Natural resource revenues were handled differently beginning in 1977; the “deductible” was reimposed on those, but at 50 per cent instead of five. Then, in 1987, the available amount was capped at $60 per citizen in any recipient province — with no inflation indexing. (The five per cent deductible on non-resource revenues was then reimposed in 1995.)

The reason for this $60 cap is sort of a historical mystery; the amount was chosen more or less at random. But the effect, over time, was to allow fiscal stabilization to dwindle into insignificance. There was a round of payments flowing in almost all directions between 1990-91 and 1993-94, but almost none reached the level at which the cap would apply. The program lay inert until 2015-16, when oil prices crashed and the greasy provinces became eligible. Alberta got roughly $500,000 over two years, but did not receive more … because it ran into the cap. Which, since 1987, had more than halved in real dollars.

The changes now being introduced will reset the $60-per-capita limit to about where it “ought” to have been with inflation — $170 per person. And for the future, the cap will continue to be inflation-indexed. But Alberta’s premier and its opposition leader both scorned the change. These leaders, along with the other provinces, don’t think there ought to be a cap at all.

The provinces are already covering revenue declines up to the amount of the “deductible”; they are simply asking for Ottawa to act as insurer in the very rare event of an even steeper revenue drop. Tombe, in fact, believes there are only three provincial revenue shocks in the last 40 years that would have led any province to hit 2020’s new corrected cap. These shocks happened to Alberta in the 1986 oil-price crash, to Alberta in the 2007-08 financial crisis and to Alberta in 2015.

Very well: Alberta is the ice-road trucker of Confederation. It creates more wealth than the other provinces, and accepts a risk of revenue shocks in return. The same proportional revenue shock ought to be less serious for affluent Alberta’s ability to provide good government. But this is the reason Alberta never collects equalization payments. If one views fiscal stabilization as an adjunct to equalization, or part of an overall moral framework, it is surely rather inexplicable that the cap on payments was introduced in the first place.

After all, equalization isn’t capped. You can let your tax base decline and fall to any of Dante’s levels of hell, and it will be brought up unconditionally to the common standard. When it comes to equalization, concern about glaringly obvious moral hazards remains mere talk; when it comes to stabilization, subtle incentives become paramount.

Would equalization ever be allowed to fall into relative desuetude in the way that fiscal stabilization was? And would a Liberal federal government be riding to the rescue of the stabilization program if it was only Alberta that was suffering now? Alberta’s political leaders asked for the cap to be waived after the 2015 crash; those pleas fell on deaf ears.

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2 years after Westboro bus tragedy, city has settled $5M in claims

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Two years after a double-decker OC Transpo bus slammed into Westboro station, killing three passengers and injuring scores more, the City of Ottawa says it has paid out more than $5 million to the victims and families who filed lawsuits in the wake of the tragedy.

Judy Booth, Bruce Thomlinson and Anja van Beek died in the crash on Jan. 11, 2019. Other passengers suffered life-altering injuries.

The City of Ottawa has been served with 18 statements of claim including one class-action lawsuit. The courts have not yet issued a decision on whether that class action should be certified, according to city solicitor David White. Another dozen notices filed could eventually bring the total number of lawsuits against the city to 30.

White said claims involving two of the three deceased passengers have now been settled, and he expects more claims to be settled this year. The city and its insurers have advanced partial payments to some victims who needed the financial assistance, he said.

A year ago, the city formally stated it was civilly responsible for the crash. The focus then shifted to figuring out how much claimants should receive, rather than deliberating over legal responsibility.

“The City and its insurers continue to work diligently to resolve the claims that have been advanced, though there is work yet to be done in this regard,” White wrote in an email ahead of the second anniversary of the tragedy.

“The objective is to ensure that the victims and their families are adequately and appropriately compensated.”

As for criminal proceedings, the trial of bus driver Aissatou Diallo remains scheduled for eight weeks beginning March 22. Diallo faces more than three dozen charges including three counts of dangerous driving causing death.

When they announced those charges back in August 2019, police said the City of Ottawa and OC Transpo had been cleared of criminal wrongdoing in the crash.

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Ottawa adds 127 new COVID-19 cases on Monday for more than 1,000 in past week

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Ottawa Public Health says 127 more people in Ottawa have tested positive for COVID-19, another triple-digit case count for the city.

One new death related to COVID-19 was also reported in Ottawa today.

In the past week, the city has added more than 1,000 new COVID-19 cases to its pandemic total. There have been only two days in January to date where OPH has reported fewer than 100 new cases of COVID-19. Daily reports from Jan. 5 to Jan 11 inclusive add up to 1,033 new cases of COVID-19 in total. 

This comes as Ontario reports more than 3,300 new cases provincewide and 29 new deaths, pushing the provincewide death toll from the pandemic to more than 5,000. The province reported 159 new cases of COVID-19 in Ottawa. 

Figures from OPH have differed from the province’s, sometimes significantly, in recent days, which OPH says is due to differences in when data is pulled for each respective daily update. On Saturday, OPH said its team adjusted its data pulling time locally to help cut down on the discrepancies with the provincial reports.

According to Ottawa Public Health’s COVID-19 dashboard, there have been 11,505 total lab-confirmed cases of COVID-19 in the city since the pandemic began last March. OPH says 398 residents of Ottawa have died of COVID-19.

The number of active cases in the city continues its record-breaking rise, but the increase slowed significantly on Monday, driven by a large number of resolved cases. The testing positivity rate has also decreased slightly.

However, the city’s rate of new cases per capita is still going up.

OTTAWA’S COVID-19 KEY STATISTICS

A province-wide lockdown went into effect on Dec. 26, 2020. Ottawa Public Health moved Ottawa into its red zone last week.

Ottawa Public Health data:

  1. COVID-19 cases per 100,000 (previous seven days): 95.8 cases
  2. Positivity rate in Ottawa: 4.6 per cent (Jan. 4 – Jan. 10)
  3. Reproduction number: 1.12 (seven day average) 

ACTIVE CASES OF COVID-19 IN OTTAWA

The number of people with active infections of COVID-19 has increased by five to 1,207, as it continues its trend of reaching record-breaking heights.

However, this is much lower rate of increase compared to the weekend, when more than 200 new active infections were recorded.

OPH says 121 more people have had their cases of COVID-19 resolve, bringing the city’s number of resolved cases to 9,900.

The number of active cases is the number of total laboratory-confirmed cases of COVID-19 minus the numbers of resolved cases and deaths. A case is considered resolved 14 days after known symptom onset or positive test result.

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COVID-19: About half of 184 new Ottawa cases in those 29 and under; Ontario reports record high 3,945 cases

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Ottawa Public Health reported another 184 new laboratory-confirmed cases of COVID-19 on Sunday as the province reported another single-day record with 3,945 new infections over the past 24 hours.

Ontario reported 61 more deaths linked to the virus in the previous 24-hour period. Two of those deaths were in Ottawa.

Ninety new cases, or about half of Sunday’s new cases in Ottawa, were reported among those aged 29 and under, with 18 new cases in children nine and under, 28 new cases in those aged 10 to 19 and 44 cases in those aged 20 to 29.

Of those in hospital in Ottawa, one patient is under 19, two are in their 20s, three in their 50s and four in their 60s. There are nine patients in their 70s, five in their 80s and two in their 90s.

Four new institutional outbreaks were declared Sunday in long-term care settings, with new outbreaks at the Duke of Devonshire retirement home, Colonel By retirement home, Grace Manor and at a group home.

“Ottawa we were doing so well,” Nepean MPP Lisa MacLeod, the minister of heritage, sport, tourism and culture, said via Twitter on Sunday afternoon. “We had just 19 cases Dec. 23. Had we kept it up we were heading to Yellow (“protect” zone). Today, however, even with new restrictions, Dr. ⁦Vera Etches is telling us we are moving to Grey (“lockdown”) … Our rate of infection after the province wide shutdown is going the wrong way and fast.”

Health Minister Christine Elliott says there are 1,160 new cases of coronavirus in Toronto, 641 in Peel Region and 357 in York Region. There are 223 more cases in Windsor-Essex County and 220 in Waterloo.

A total of 4,983 people have died from COVID-19 in Ontario and 215,782 have tested positive for the virus over the course of the pandemic.

Hospitalizations are increasing at a rate that is alarming public health experts.

There were 26 new admissions in Ontario hospitals since the last reporting period. There are now 1,483 COVID-19 patients requiring hospital treatment, with 388 people in intensive care units across the province and 266 on ventilators.

More than 62,300 tests have been completed since the last provincial update on Saturday.

A total of 397 people have now died from the virus in Ottawa as the city’s active case count continues to spike.

There are now 1,202 active cases in the city. According to OPH data, 9,779 of those are resolved.

There are 26 patients in Ottawa hospitals, with nine in intensive care.

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