Welcome to Distinct Society West. When the government of California proposed to deny essential social services to illegal immigrants from foreign lands, it was rightly and roundly condemned across the United States. B.C. now proposes to treat Canadians from other provinces as so many wetbacks, the difference being that in this case it's the government that's acting illegally.

If you need confirmation of this, look no further than B.C. Social Services Minister Joy McPhail's tortured attempts to argue that it isn't. The Canada Assistance Plan plainly forbids any such residency requirements, on penalty of a reduction in the federal transfers that help finance it. The minister's answer? The residency requirement started this month; the province used up its share of federal funds, under the "cap on CAP" that limits the richest provinces to a 5-per- cent annual increase, in November.

So, technically, the $47-million federal Human Resources Minister Lloyd Axworthy is withholding is earmarked for the period up to the end of last month, when the province was still in compliance with federal law. In which case, she has nothing to worry about. Technically, the money's already been sent.

What's going on here? What's going on is that the government of British Columbia is holding a gun to the heads of its newest citizens, in order to extort more money from the government of Canada. If the rewards from this bit of profitable federalism, Pacific-style, are won at the cost of some fairly basic principles of justice, not to say the unity of the country, well, the province seems to shrug, so be it.

Unable to run its own welfare program in a sensible fashion, the B.C. government falls back on that old standby, blame the feds. The residency requirement was imposed in deliberate defiance of the law, at a moment calculated to find the federal government at its weakest, in anticipation of a provincial election in which it hopes to use Ottawa-bashing in place of a platform. The spectacle is too tawdry: B.C., pulsating with economic might, parading around in victim drag. Don't blame us, Ms. McPhail pleads. It's only because we've been "shortchanged" by the federal government.

Whatever linkage the province may try to make, this has nothing to do with the cap on CAP. It should be noted that the government of Ontario, although it is also subject to the cap, has not even suggested a residency requirement. Indeed, unlike its NDP predecessor, it hardly whines about the cap at all. Maybe that's because the cap never was the problem. The only reason federal transfers fell as a percentage of Ontario's welfare bill - where in most other provinces, Ottawa pays 50 per cent, in Ontario the federal share is now down to less than 30 per cent - was that Ontario raised its welfare rates so much faster and farther than anyone else. As late as 1991, per capita transfers to Ontario for social assistance were the second highest in the country.

The premise behind the cap on CAP should be familiar to a social democrat: It's called ability to pay. Per capita GDP in Ontario, Alberta and British Columbia averaged just under $28,000 in 1994, about 27 per cent higher than in the other seven provinces, where the average was just above $22,000. Federal transfers are financed, on average, by the average taxpayer, across all 10 provinces. To say that the three "have" provinces should receive the same per capita federal transfers as the seven have- nots is to say that the average Canadian taxpayer should transfer income to people who are, on average, richer than he is.

Anyway, it's a bit late to be rehashing the cap-on-CAP fight now. The CAP is, after all, history as of next year, to be replaced by the new Canada Health and Social Transfer. But the formula for apportioning money under the CHST is still, as they say, "to be announced" - which is to say it will be decided by one of those colourful interprovincial beard-pulling contests that make Canada such an interesting place to live. The arithmetic is inescapable: If Ontario and B.C. are to be restored to parity with their poorer cousins, while the total amount of the transfer is declining, that means somebody else has to take proportionately less. For somebody else, read Quebec.

You can bet that Quebec will be working the separation lever for all it's worth to ensure it continues to get its accustomed share of those humiliating federal transfers. Now B.C. seems gearing up to do the same.