Equalization Ad Nauseum

I know I have blogged on this for weeks but the hits keep coming. I continued to be baffled by Premier Lord’s position on this. I know he is piggybacking Jean Charest. I know, at least it seems, that he passionately feels that New Brunswick needs a lucrative and unlimited Equalization blanket to cushion the province’s ongoing economic decline. In fact, I have never seen him champion any issue like Equalization – nothing else gets him this passionate.

But a basic actuarial analysis of the trends would reveal that even if he is successful he will only be delaying the inevitable.

Consider this. Even with significant increases in other Federal transfers since 1999, New Brunswick needs $700 million more Equalization today than seven years ago. Further, consider the fact that the population is declining. Combine those to factors and build in the escalating health care costs and eventually – in the not to distant future – New Brunswick could need billions more Equalization and end up with by far the highest per capita government spending in Canada.

Now, this round notwithstanding, how long are Ontario, Alberta and eventually BC going to allow that to happen – at their expense. If Daulton thinks the ‘fiscal imbalance’ is bad now – wait 10 years.

We need new thinking on this. Now. Lord should go to the Premiers’ meeting next week and shock ’em all. He should propose freezing Equalization at it current level in return for hundreds million more for economic development.

He should state (and Jean should listen) that this is the only viable future for Confederation. Ever increasing Equalization, even increasing economic polarization, ever increasing population decline in huge chunks of Canada is unsustainable.

What’s needed is a Irish model for Atlantic Canada. Quebec needs to break its entrenched paradigm (I think Bouchard’s pour un Quebec lucide sums it up). Manitoba needs to get back on track.

Ontario has 10 foreign offices promoting trade and investment and New Brunswick has none. Who needs it more?

Ontario spends billions to prop up and grow its auto sector. New Brunswick spends pennies to prop up and grow its…….

The vast majority of R&D spending, of government grants, etc. goes to the richest areas in Canada. Vast majority.

Lord should have Klein and Daulton put their money where their mouths are. If they want to reduce Equalization, then they should fully support a best in class economic development programme for Atlantic Canada. Daulton should be the first one to congratulate Premier Lord as he announces the new KIA plant in Saint John.

But he won’t because the dirty underbelly of all this is that Ontario has no particular interest in Atlantic Canada’s economic growth. If we grew, they would lose a steady supply of thousands of trained and acclimated workers. If we grew, some of those auto plants and aerospace plants and IT shops just might start looking down here (remember RIM?). If we grew, we might start competing with Ontario for R&D and other investments.

No, in the words of The Rainmakers They’ll turn us all into beggars ’cause they’re easier to please.

Remember the words of Ontario’s Intergovernmental Affairs Minister – “We’re not going to stand by and watch Ontario become a have not province.”

Premier Lord should state next week: “We’re not going to stand by and become even more of a have-not province. We are going to change things. And that change starts right now.”

You wanna see Daulton and Ralph uncomfortable?