I see David MacKinnon has brought his anti-Equalization message to the pages of the Telegraph-Journal. He is one of a growing number of voices in Ontario that blames equalization for Ontario’s economic woes and throws in the usual after thought about it being bad for the Maritimes as well.
Anyone who has been reading this blog will know that I am all for a fulsome debate about equalization, transfers and economic growth but I think much of the logic used by the equalization bashers is puzzling.
I hate to break it to you but goverments are primarily in the business of transfering income from one segment of society to the other. From rich to poor, from young to old, from old to young, from those without kids to fund those with kids, from those who don’t use public transport to those who do. From healthy people to sick people.
So why stop at provincial borders? Why isn’t MacKinnon outraged at the subsidization between Toronto and rural Ontario? Or why not be outraged that Rosedale subsidizes Etobicoke? Heck, forget about national borders, why isn’t he outraged that we give billions worth of international aid each year? Isn’t that crippling Ontario too?
We live in a country that is making an effort to ensure that Canadians have access to good quality public services no matter where they live – Etobicoke, Rosedale, Moncton or Minto. That’s an admirable objective.
The real problem is the chronic underperformance of the economy in the Maritimes. We were told in the 1990s that the solution was for tens of thousands of people to pack up and leave for Ontario, Alberta, Saskatchewan and BC and the Maritimes’ economy would recalibrate down to a lower level, but a sustainble level of economic activity.
We did exactly what they asked for – shipped tens of thousands west and the economy down here in many ways is weaker than ever.
I think this debate is one that will have profound implications for New Brunswick. I remember Bernard Lord demanding his “constitutional right to equalization” the last time we were in this type of negotiation. Nowadays I am not sure that will fly. Most east of Cornwall have been told Ontario and western Canada are paying for gold-plated public services down here and it must stop.
I would like to see a new partnership – where the feds and province work on a long term plan to reduce reliance on equalization based on a mix of economic growth and public sector cost growth management. This new view out of Ottawa that tough love will solve the structural problems is a risky one. It could lead to greater social unrest and even greater economic disparity between the regions. That creates both social and political instability.
A revitalized economy in the Maritimes would be good for everyone and I don’t think we have really given that model much of a try.