What was that wager again?
It is increasingly clear the Harper government is not talking about fiscal imbalance at all —- or not in the sense the provinces attach to it. It is talking about disentanglement: about reducing overlap between the two levels of government, restricting use of the federal spending power in provincial jurisdictions... But there will be no wholesale withdrawal of the federal government from national life, nor does it intend to simply cut a bunch of fat cheques to the provinces. Rather, issues of fiscal federalism will be rolled into a larger discussion about improving the federation, specifically the economic union —- a negotiation ... in which the feds will bring their own set of demands. These are listed, prominently and repeatedly, throughout the budget: a common national securities regulator; harmonization of provincial sales taxes with the GST; and a general reduction of provincial barriers to trade and labour mobility. The message is unmistakable. You want the quid? Come up with the quo.
N. Spector, May 6 ("The column I'm glad I didn't write"):
The National Post’s Andrew Coyne is onto fiscal imbalance, and I’ll wager he has it wrong.
Globe and Mail, June 26:
Provincial finance ministers seeking bigger slices of Ottawa's wealth are gathering at federal counterpart Jim Flaherty's invitation this week, but the Conservative government's senior economic steward is looking for something from his guests, too. Mr. Flaherty hopes to sell them on a series of economic reforms that he believes should go hand in hand with negotiations aimed at a better equalization deal and richer per-capita transfers. For instance, he wants provinces to agree, at long last, to form a common securities regulator. This would replace 13 different regimes across Canada that frustrate attempts to raise capital. He also wants action on lowering interprovincial trade barriers and co-operation on integrating skilled immigrants into the work force, among other things. The Niagara-on-the-Lake, Ont., meeting of finance and securities ministers ... is Mr. Flaherty's attempt to broaden the fiscal imbalance debate beyond how big a cheque the Conservative government might cut to share the wealth.
Canadian Press, June 25:
Finance Minister Jim Flaherty has a blunt message for Canada's premiers: Fixing the country's fiscal imbalance will not include giving the provinces billions in extra cash... Flaherty's recipe for reducing fiscal disparities among the provinces, and between them and the federal government, is much more modest. It includes some additional cash for post-secondary education and a new formula for calculating equalization, although not necessarily putting any more money into the wealth-sharing program... Flaherty is also serving notice that there's something he wants from the provinces in return for fixing the imbalance: a stronger economic union. That means knocking down interprovincial barriers to trade and labour mobility and agreeing to a common, national securities regulator. "There's no formal quid-pro-quo, but I think we should all engage in all of these issues and not just some of them," he said. "Any successful negotiation is a two-way street."
UPDATE: Then there's this piece of "reporting" in the Toronto Star:
Harper and company appear determined to turn back the clock by abandoning the central role Ottawa has played in national social and economic programs as the country evolved over the past century into a modern, urban state. The Conservatives' under-the-radar thrust is starting to raise questions about the country's ability to mount effective, national social programs and, in the worst-case scenario, ensure the continued unity of Canada.
Funny, I could have sworn that CP story said the exact opposite:
While he's promising that the federal government won't intrude on provincial jurisdiction, Flaherty said there are three primary areas where both levels of government have what he called mutual obligations-health care, post-secondary education and infrastructure... He maintained, as he has done before that there's no need for more federal health-care funding beyond the $42-billion, 10-year agreement negotiated by former Liberal prime minister Paul Martin in 2004. And he said there's already "substantial funding available" for infrastructure, with his first budget committing $16 billion over four years, although the details must still be worked out. That leaves post-secondary education, "the area in which there's the most to be done." The federal government has promised to carve out a separate education transfer from the current Canada Social Transfer and is prepared to pump more money into it. While he wouldn't give a precise amount, Flaherty said he's looking at long-term funding commitments for 10 or 20 years to ensure "proper funding of research and development and innovation through our colleges and universities and skills training."
Doesn't sound like the end of Canada as we know it. But then, what does CP know? They only interviewed Flaherty. Whereas the Star interviewed Roy Romanow...
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