The premiers' latest sham

The premiers, by the grace of God, have met again, and though the results were even more entertaining than usual, this is probably the last such gathering we will see for a while. It has been great sport watching the premiers playing at being statesmen, awarding themselves grand titles like the Council of the Federation and whatnot, for all the world as if they were doing something useful. But in fact the whole thing has been a sham. Scratch just a little below the surface, and it becomes painfully obvious the premiers have neither shared interests nor a common agenda -- no, not even wheedling cash out of the feds. True, that was enough to hold them together for a while. The government in Quebec would periodically raise the spectre of separation if its latest "historic" demand was not satisfied. Sometimes it was an actual separatist government that made these threats; more often they were invoked as a warning of what would happen if, God forbid, the separatists were ever elected. Then the rest of the premiers would light up the night skies with the consequences if Quebec's demands were to be met without the same consideration for their own. And in this way the provinces were able to present something resembling a common front. But sooner or later somebody was bound to do the math. The cheques the premiers were pleased to write on the feds' account weren't coming from Ottawa -- not really. They were coming from taxpayers, notably the 10% of taxpayers who pay most of the taxes. And while everyone likes soaking the rich in the abstract, this is Canada: Eventually someone figured out that disproportionate numbers of the rich live in two provinces, Alberta and Ontario. So while it seemed like the general provincial campaign against "the fiscal imbalance" -- the latest in a long line of provincial attempts to pretend their grubby demands for cash were rooted in some sort of high principle -- ran more or less in parallel with Ontario's recent discovery of a "$23-billion gap" in its own dealings with Ottawa, in fact they were diametrically opposed. If Ontario is to get more, it can only be if the other provinces get less. If the other provinces are to be satisfied, it can only be at Ontario's expense. (Well, Alberta's and Ontario's, but Alberta isn't playing, either. In fact, it's lost interest in the whole game. $60 oil will do that.) Everyone's having fun until somebody loses $1-billion. You can only agree on "more money" as long as no one asks "from whom." Now that this has dawned on the Premier of Ontario, I do not think we will be hearing much more from the premiers, or their risible "Council." It is not a trivial disagreement when the largest province in Confederation storms out of a meeting halfway through. It's a debacle. What's particularly remarkable is that Ontario's tantrum should have been occasioned by a report, by a specially-commissioned Advisory Panel on Fiscal Imbalance, that was supposed to smoothe over differences between the premiers. The report attempts to do so in the time-tested way: by giving more to everybody. So whereas the premiers, left to themselves, could not agree on a new equalization formula if their lives depended on it, the report solves that in a jiffy, by means of a massive expansion of the equalization program in general: $5.7-billion a year, or almost half the existing cost of the program. So no ugly fights between Quebec and the Atlantic provinces. And then to cover off Ontario's concerns, it also proposes a $4.9-billion annual increase in other federal-provincial transfers. Now, you might think this a bit rich, in view of the extraordinary increase in federal transfers that has already taken place in recent years: from $20.5-billion in fiscal 1998 to $42-billion in 2005. Ah, but the panel has an answer to that: While transfers "for health" may have expanded at a quite alarming rate, transfers "for post-secondary education and welfare" have actually fallen. This is -- what is the word the French use? -- bollocks. There are no little labels attached to federal dollars marked "health" or "education," and if there were you still couldn't be sure the provinces were devoting it to the purposes prescribed. It all goes into general revenues, to be spent as the provinces please. And, as recent provincial budgets illustrate, it pleases them to spend a lot these days. They're rolling in it. But I digress. The significance of this latest exercise in provincial pretensions is not that the "fiscal imbalance" has once again proved a convenient fiction. It's that the premiers were handed a report calling on the feds to give them $10-billion more a year, no strings attached. And they couldn't even agree on that.