Buckle up folks, the ‘fiscal imbalance’ will be rectified

This ‘fiscal imbalance’ thing is not going away. Ontario’s Premier and senior Ministers are flogging it all around Canada. While nobody states it, rectifying this imbalance to Ontario’s satisfaction must – by definition – hit Atlantic Canada.

You see, most of the $23 billion fiscal imbalance (the amount of money Ontario each year that is generated by Ontario taxes but spent elsewhere) goes to prop up Atlantic Canada, signficant parts of Quebec, the North, etc.

A recent article in the Edmonton Sun had an interesting angle on this. It advised Ontario to ‘buck up’ as Alberta has done in this area. The article has this quote from the report on fiscal imbalance:

“Perhaps the most troubling aspect of the whole transfer payment issue,” the report continued, “is the province’s generosity has generated no goodwill in other provinces.”

The Edmonton Sun writer responds this way:

Those ungrateful Maritimes premiers apparently haven’t even bothered to send Dalton a thank-you card.

But I come back to a common theme in this blog. It’s pretty hard to find a grateful person on welfare. The whole Equalization system has allowed NB, NS, PEI, et. al. to continue to pay for health care, education, etc. but everyone living in the ‘have not’ provinces realizes that things are heading downward and that is a huge concern.

So if the Equalization system was geared towards raising up the economies of the have not provinces (and not subsidizing government services during the decline), then maybe people would be more ‘grateful’. Maybe if those Equalization dollars translated into hope for the future of our provinces, we would be more ‘grateful’.

But providing dollars to ease the economic fall – that’s no solution. Keeping New Brunswick on life support is no solution.

Make no mistake. Some federal government party is going to realize one day real soon that this issue of fiscal imbalance will be an election issue. Some party, Libs or Tories, will campaign on it. And some party will start the redess it. And that will, over time, be at the expense of places like New Brunswick.

We made our bed, metaphorically speaking by eagerly asking for and taking more Equalization and EI over the years, and now we have to sleep in it. Premier Lord’s biggest achievement, from an pure financial perspective, was renegotiating the Equalization formula that brought more dollars to New Brunswick. But it’s that attitude that is fuelling Ontario’s anger and Alberta’s ambivalence (as long as we don’t ask for more).

Some government in New Brunswick, some day, is going to talk again about self sufficiency. It will talk about reducing the massive dependance on tax dollars generated in Ontario. It will talk about the large scale economic development required to make this happen.

It just won’t be today.