Equalization for Uncertain Times
Metro News
Deborah Coyne – February 18, 2009

There is urgent need to bring coherence, consistency and accountability to the jumble of federal contributions to provinces, especially with Ontario qualifying for equalization.

How many times must Premier Danny Williams verbally explode about “equalization” before the Harper government abandons its hyper-partisan approach to serious matters of national interest? Equalization is a very serious matter which, together with other federal-provincial transfers for health, education and social services, plays a critical role in promoting equality of opportunity and comparable levels of services across Canada. This commitment defines a great nation.

Regrettably we can no longer measure how well the myriad of federal contributions to the provinces, including equalization, helps to ensure comparable public services across Canada. No amount of tinkering with the arcane equalization formula will fix this fundamental problem, especially since too many other federal programs incorporate confusing equalizing elements that exacerbate inequities among Canadians. The best example is Employment Insurance which is structured to benefit the unemployed who live in weaker areas of the country.

There is urgent need to bring coherence, consistency and accountability to the jumble of federal contributions to provinces, especially with Ontario qualifying for equalization. Unfortunately the Harper government has no interest in promoting comparable public services – the recent manifestation of this being the elimination of all federal funds for childcare. Harper’s real agenda is to downsize the national government, download responsibilities and fiscal room, permanently eliminating Ottawa’s ability to pursue national standards and objectives in most public services and programs. With every month in power, Harper draws closer to achieving his goal.

Harper’s signature step – the GST cuts – reducing national revenue by $60 billion over 5 years, was a bad step in the best of times, universally condemned by economists, and now cripples the national government’s ability to respond in this, the worst of times. Yet Harper refuses to reconsider. Ottawa’s already small share of national income, by far the lowest of any central government in the developed world, will continue to shrink to historic lows.

Opposition parties must directly challenge this agenda. Explain to Canadians why we must stop weakening the fiscal position of the federal government – taking care not to turn national politics into a complex and excruciatingly boring accounting problem. Propose the establishment of a permanent non-partisan advisory commission (similar to Australia) to make the system of federal contributions to provinces more transparent and subject to public scrutiny. And ensure that, through the commission, decisions relating to federal-provincial fiscal relations are based on intelligent debate and reflect longer-term national objectives to build stronger ties among Canadians rather than attenuate them.