Another budget shock — the Nova Scotia deficit for the past year is approaching $700 million, a revelation followed by declarations that the new Liberal government’s honeymoon is over. I don’t actually remember a honeymoon — just the usual numb anxiety while awaiting the needle — but let’s examine this continuing struggle with debt, deficits, a weak economy and young people leaving against a wider backdrop.
First, lest we forget, we are not alone. Much of the developed world in is some variation of this pickle in the wake of the 2008 economic crisis. Second, with only a few periods of respite (the first and second world wars, the 1960s and 70s) this is a newer version of what’s been going on for roughly 130 years, since the Maritime economy started its long descent in the 1880s amid post-Confederation politics.
But one thing has changed over time — now the Canadian government is quite content with this state of affairs, and is even encouraging it. Dumping costs on provinces will help it balance its budget, and favouring Alberta and its powerful oil economy at the expense of everything else is its main game. Having Maritimers in particular leave for Alberta is seen by the Harper government as a solution rather than a problem.
So along with the vital need to reform many of our political/economic habits as outlined by last winter’s Ivany report, there’s an equal need to engage Ottawa and the delinquent federal role. The Ivany commission made that point, too, emphatically, but among commentators I seemed to be the only one who noticed. Just talking about it seems to be a problem.
Let’s try again. There’s a new book, entitled Equal as Citizens by Nova Scotia writer/researcher Richard Starr, that I recommend to the political class. In it, Starr traces the rise of equalization — the idea of providing more or less equal services to Canadians everywhere from federal revenues. He does this by picking up the story from Confederation on, then as it intensifies through innumerable commissions of inquiry and federal-provincial struggles through the searing poverty of the 1920s and ’30s until the equalization principle was enshrined in the Constitution Act of 1982.
And then he traces out how it has been attacked and undermined ever since. Ottawa started chipping away at provincial supports to balance its books, Ontario’s economy — the pillar of the equalization system — started slipping, Alberta resisted sharing its wealth, Quebec separatism aggravated the rest of the country with its contempt for the equalization payments it took as its due, and too many federal economic development schemes in the Maritimes and elsewhere had gone wrong.
And to cap it off, a sharp neo-conservative philosophy of attack against anything that smacked of equality, that divided Canada into “makers” and “takers” — to which the Harper government subscribes — gathered steam, essentially demonizing the Maritimes in particular as pogey country with its seasonal industries. Starr argues for renewed and reasoned debate of this vital principle before it is trashed completely. Reduced to neo-con simplicity, the argument now is framed as one province giving and another taking. In fact, everyone pays federal taxes and all provinces receive federal payments, some more than others, depending on their fiscal capacity. Federal taxation and spending to equalize services is a standard feature of federations everywhere, including the U.S. and Australia.
Stephen Harper had not campaigned against equalization before becoming prime minister in 2006, instead talking of righting the “fiscal imbalance” he accused the Liberals of creating in a new era of “open federalism.” Instead, his response has been unilateral measures that give more to the rich and less to the unrich, capped off by the 2011 decree on health care that gave Alberta an extra $1 billion and taking from everyone else.
In its waning days, Starr recalls, the Liberal government of Paul Martin struck a panel led by a former deputy treasurer of Alberta, Al O’Brien, to once again take the pulse on how federal money should be partitioned. It reported in 2006 that “a strong sense of being Canadian was apparent in every region, as was the desire for a national vision and national approaches.” Further, “more than anything else, participants wanted fairness and equal opportunity for everyone, regardless of where they lived in the country.”
Maritime governments in particular and the political class generally have for decades now failed to address the issue of equalization and the broader federal role (for example, we flagellate ourselves over the cost of the Yarmouth ferry while the federal government, which used to subsidize that run as an essential service, is now happily absent, and nobody says a word). This may be our real “culture of defeat.” Small provinces acting alone control only a part of their political, economic and social reality. The rest is federal. The very idea of Canada as a nation is bound up in in it.
It’s time to talk about this again, and stop taking dictatorial edicts lying down.
Ralph Surette is a freelance journalist in Yarmouth County. This column was first published in the Chronicle Herald.
Photo: pmwebphotos/flickr
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