It's The Economy, Stupid

Paul Wells is probably my favourite political journalist.  I have been reading Inkless Wells and his columns for years but I think he made a tiny error in his otherwise important analysis of the new federal/provincial relationship that is emerging under PM Harper.

He says:

But he [Harper] will spend ever more money on jets and jails, while taxing less as a fraction of GDP than any federal government has since the 1960s, and sending a constantly-increasing share of money to the provinces, which can spend those dollars as they like. You can hear the air going out of the federal government’s —any federal government’s — ability to “encroach upon legitimate provincial jurisdiction.” From day to day this prime minister zig-zags in ways that would break a snake’s back. From 2001 to 2011 the line is as straight as a ruler.

 

I guess depending on how you interpret the statement “sending a constantly-increasing share of money to the provinces”.  I read that to mean ‘more money’ to the provinces but I guess if the top line revenue is decreasing then the share could also decrease.

But the bottom line is that in the New Brunswick government budget of 2001-2002, the province received over 40 percent of its budgeted revenue from the federal government and by 2011-2013 that share was down to 37.6 percent.  And it looks like that share will decline again next year and in subsequent years.  So, for at least New Brunswick, the ‘flat tire’ federalism that Wells speaks about isn’t about more money to the provinces it’s about less.

At a time, I might add, when the needs are increasing.    New Brunswick is facing a tidal wave of boomers hitting the prime health care years and we are down to 37 percent and decreasing?

I come back to my previous analysis.  The massive explosion of non-renewable natural resources revenue – to provincial and federal governments – is changing the landscape in fundamental ways and the flat time vision is not likely to work.