Would the real ‘fiscal imbalance’ please stand up?

I forced myself to watch the debate last night – all but about 20 minutes of it – because I am always hopeful that someone will disaggregate their comments about how great Canada’s economy is doing and talk about the fact that in the last 10-12 years, a number of regions in Canada have been hit very hard by economic challenges. I am talking, of course, about most of Atlantic Canada, northern Ontario, most of Quebec, Saskatchewan and Manitoba.

Yes, it’s true that the growth in places like Toronto and Calgary has more than offset these troubled areas, but I still think it is bad policy and should be bad politics to sit back and watch this country ‘break down into tribes’ to extrapolate the great Bruce Cockburn.

But the only reference I heard – remember I missed 20 minutes – was Jack Layton lamenting the fact that young Nova Scotians are forced to leave their province to find work.

But I digress.

The interesting thing about last night’s debate from my perspective was the short discussion on the ‘fiscal imbalance’. Paul Martin, who looked more uncomfortable than the others, made the most interesting comment of all when he said “the fiscal imbalance means different things to different people”.

He is bang on. And this has the potential to be a real crisis in Canada over the next decade.

To some, the fiscal imbalance means that the Feds keep running surpluses while the provinces struggle and we need to find a more ‘balanced’ model. I believe, based on what I hear, that this is Stephen Harper’s version of the issue.

To others, like Daulton McGuinty, Lorne Calvert and host of pundits and think tanks ranging from Ibbitson to the Ontario Centre for Competitiveness and Prosperity the fiscal imbalance means that the rich provinces put too much into Confederation and get too little out. While McGuinty hasn’t said it (that I have read about), the others have stated boldly that Equalization is the problem and it is a drain on Ontario’s productivity and long term economic growth (and I am all but quoting here).

To others, like the champion Bernard Lord and Gilles Duceppe, the fiscal imbalance means that places like Ontario and Alberta get richer while places like New Brunswick are getting poorer (in relative terms). These gents want Ottawa to dole out more Equalization. This is our constitutional right (in the words of Lord).

How this plays out is anyone’s guess. But politically, the cards are stacked againts the proponents of more Equalization. The majority of the population of Canada lives in ‘have’ regions. Many of the newspapers in these areas are tuning public opinion to the Ibbitson view of things. This is conveniently couched as a way to save Atlantic Canada as Equalization itself has become the cause of our demise.

It’s interesting stuff. The subsidies that save us are killing us. Hmm. That’s a bit over my head for 7:30 am and no coffee yet.

Suffice it to say that Duceppe’s idea of getting Alberta thrown in to the Equalization formula is a massive non-starter. That would means hundreds of millions more for New Brunswick and I don’t see ON, AB, SK and BC allowing it.

For me, and it is hardly mentioned at all in this election and generally, the real ‘imbalance’ is in economic development.

When you park all this silly talk about ‘prosperity’ in New Brunswick (somebody should pass legislation to strike that word from our lexicon at least until we actually see some), we have some serious economic challenges. The real imbalance is that for the last 20-30 years and more, the vast majority of global investment, immigration and ideas has gone into Ontario, Alberta and BC and to a lesser extent Greater Montreal.

And, as has been pointed out by experts far more eloquent than me, much of this growth has been supported – heavily- by the federal government.

So to Daulton, Lorne, Ralph, Ibbitson, and all the other folks that are griping about Equalization, I say why don’t you turn you guns on helping Atl. Canada? Why don’t you support a large scale, long term economic development plan that would see the Federal government invest billions into economic development? Right now all that money is going into auto plants in southern Ontario and aerospace in Montreal.

If we could rectify the ‘economic imbalance’ we wouldn’t have to worry as much about the ‘fiscal imbalance’.

But that’s just me.

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