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How Jean Conned Ralph


The recipe used by Prime Minister Jean Chretien to con even conservative premiers into signing onto the social union agreement.

Previously published in The Edmonton Journal, February 5th, 1999


Lorne Gunter

 Author Notes

Regular columnist with The Edmonton Journal, and frequent contributor to the National Post, National Report, and other publications.

 Essay - 2/4/1999

Take two parts Calgary Declaration, and whip until soft peaks form. (This should not take long since the Declaration was mostly fluff to begin with.) Gently fold in a cup of Meech until well blended. Combine 100 grams of Charlottetown, a pinch of Social Charter, one teaspoon Spicer Commission, a quarter cup of Mulroney-brand Shaping Canada's Future Together rhetoric, and a dash of Courchene’s rebalancing solution. Mix thoroughly. Then place all ingredients, along with the lyrics from Bobby Gimby’s “Ca-na-da,” into a large blender fitted with a metal blade and puree.

No, no, that’s not a recipe for disaster, or, at least, it wasn’t intended as such. It’s the formula to improve Canada’s elaborate and expensive system of transfers and equalization payments, concocted yesterday in Ottawa by Chief Cook Jean Chretien and nine of the 10 provincial bottle-washers.

Officially titled "A Framework to Improve the Social Union for Canadians," the formula is a hodge-podge of past efforts to reform Confederation. Perhaps that’s why Quebec refused to sign on. Too much scent of a score of old free lunches gone bad.

Mostly the agreement looks pretty harmless. There’s a surfeit of the "We’re a kinder, gentler nation" self-delusion that is requisite in all such documents. The framework promises to "respect the equality, rights and dignity of all Canadian women and men, and their diverse needs," which was presumably stolen from the folks over at www.allthingstoallpeople.com.

It commits Ottawa and the provinces - except Quebec - to "ensure adequate, affordable, stable and sustainable funding for social programs," without saying whose definition will be used for adequate, affordable, or sustainable.

This is crucial. The debate over social spending in Canada is essentially a debate over definitions. What the Fraser Institute thinks is affordable usually falls short of what the National Council of Welfare believes is the minimum adequate level of spending on welfare, child care or housing.

The key is who controls the definitions. And for conservatives, there’s nothing but bad news in this regard. The federal bureaucrats who will determine if a province’s welfare programs are in compliance and, thus, qualify for federal transfer payments, all favour big-government definitions for these term; even more so, the nation’s judges.

Worse yet, Thursday’s framework comes closer to chiselling the federal spending power into granite than any previous non-constitutional deal.

Since the Second World War, and especially since the early 1960s, Ottawa has used its nearly unlimited power to levy taxes and borrow money to build up huge pots of cash with which it then bribed its way into areas of exclusively provincial jurisdiction.

Even though the constitution gives the federal government no authority over health, education and welfare, Ottawa has weaseled its way into these fields by offering provinces money in return for the right to dictate national standard to them.

By formally recognizing the federal spending power, the framework, in effect, adds to Ottawa’s power within Confederation. And because it does not concurrently give the provinces the authority to veto such intrusions, the framework diminishes provincial power.

All this is okay, though, because the premiers were able to extract more health care money from Ottawa, right? Well, that depends on which premier we’re discussing. Federal transfers to province are not distributed evenly by population. They are prorated to give more to the have-not provinces.

For each new health care dollar Newfoundland’s Brian Tobin wins from Ottawa, Newfoundlanders send 50 cents to Revenue Canada. In Quebec, the cost is 68 cents for each additional federal dollar. In Manitoba and Saskatchewan, 75 cents.

The three “have” provinces, though, receive a smaller share of federal transfers than their populations suggest, and their residents pay a disproportionately large share of total federal taxes. Alberta, for instance, receives just 7.5 per cent of federal transfer dollars, while Albertans pay nearly 11 per cent of all federal taxes collected.

Thus while Premier Ralph Klein yesterday in Ottawa may have "won" upwards of $188 million in new federal health dollars, William Robson, senior analyst with the C.D. Howe Institute, calculates this victory will cost Albertans $257 million in federal taxes.

Not only is this bad economics, it comes with the loss of provincial sovereignty and an increase in federal power. Had Klein decided instead to raise this extra money at home, it would have cost Albertans less, and he would not have had to share the glory with the Chretien.

Nice going, Ralph. The Liberals in Ottawa are no doubt grateful for your help with their reelection bid.

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