I never really understood the federal-provincial government relationship. Lately I’ve been thinking about this more and more. I’ve talked with folks who are worried the Senate will be abolished and New Brunswick will lose any sense of balance (although I have never quite figured out how the Senate balances things). I have also been looking at the federal transfer payments and, as I reported here, found that if NB had the same percentage share of transfers in 2013 as it did in 2006, it would add upwards of $600 million to our budget – presto no more deficit. And there are the cuts to EI – made in order to make things better I guess – but it still represents a cut in money flowing in. And then you have to add the federal job cuts – which hurt more deeply here I would argue than just about any other province.
When the national economy is in a funk, the feds increase their spending – ‘stimulus’ spending it is called to get the economy moving. When a provincial economy is in a funk (i.e. NB right now) the feds cut their spending – hard. In an alternate universe you might see the Feds increasing their ‘stimulus’ spending in a province when that province is hurting and cutting back when thing are good (just like the national economy).
In an alternate universe, the feds might work with the province to set growth and employment and fiscal targets – just like the at the national level. The two levels of government would sit down evaluate the current economic environment and make a made in New Brunswick plan with federal support – to get the province back on track again. That, again, would be an alternate universe.
And this isn’t just about ‘cash’. The feds control many levers that influence economic development. They control immigration (the recent clamp down will hurt NB more than most). They control trade policy (the recent CETA has clear advantages for SK, ONT, QC, NL, AB but not so clear for NB). They have trade and investment officers worldwide (that barely ever interact with NB economic developers). The feds spend a huge amount on R&D (lowest amount per capita in NB however).
I continue to believe that in an alternate universe, the fed-prov relationship would be more intelligent. If the feds think we spend too much per capita on public services – fine let’s put that on the table. But slowly choking New Brunswick to death doesn’t seem like a particularly smart way to do things.
The feds have all kinds of unique provincial focus areas from the wheat board to the Keystone pipeline. It’s only natural in a large and diverse country that the fed-prov relationship should be different depending on the province and what the needs of that province are at any given time.
Former PM Chretien is proud of his expansion of the EI program because it helped those in need (as he says) but there is no hint that maybe it had some negative effects as well.
I don’t think this will ever change. As continuously pointed out NB has the population base of greater Hamilton. But it is a ‘province’ unlike Hamilton and it should have a different kind of relationship with the federal government.