Staple it together

I got several emails about the last post on equalization so let me clarify again that I am not against the concept of equalization or transfers from a federal government to provincial governments to ensure that a similar level of public services are offered in each province in Canada. And, unlike AIMS, I do not believe that equalization is the root of all our problems. We were underperforming Canada in economic performance before the 1950s and we did after as well. Equalization did allow service provision to rise to a similar level and in fact some in Ontario say service provision rose above that province.

But I do think that the focus on wringing more equalization and transfers out of the Feds rather than focusing on good economic development policy and programs has been a mistake.

The reality is that the debate has shifted away from the substantitive issues of ‘why’ places like New Brunswick need more equalization to whether or not we are getting too much equalization. I’d like to get back to the why.

A few points (reiteration):

Statistics Canada publishes a study last year that shows that Ontario – far and away more than any other province in Canada benefitted from the NAFTA. This is economic development policy.

The Auto Pact almost exclusively benefited Ontario (directly). This is economic development policy.

The St. Lawrence Seaway project almost exclusively benefitted Quebec and Ontario. This is economic development policy.

Canada’s industrial research and development policy is heavily skewed towards Ontario and to a lesser extent Quebec. This is economic development policy.

The Pacific Gateway amounted to something like $2 billion in federal funding to lead to direct economic development – particularly in places that were facing economic challenges – Prince Rupert and Prince George. This is economic development policy.

I could go on and on but the sad thing is that I can’t find any federal economic development policies that have directly benefitted New Brunswick. I guess the Atlantic Accord benefitted Nova Scotia and Newfoundland (or the Harper version). What policies were tilted towards New Brunswick?

AIMS wants a scorched earth approach. Cut everything off. Burn it to the ground and hope that Frederich Hayek comes back from the dead and builds it fresh. I don’t agree. I still think that government matters and that good policy from government matters. Not an absence of policy. Not bad policy but policies and programs that directly lead to the kinds of private sector business investment that we have seen in places like Ontario, British Columbia and to a lesser extent Quebec. I leave the oil and gas provinces out of it because they are attracting investment for a reason we can never replicate.