Ontario is stepping up pressure on Ottawa to review the way it calculates provincial transfer payments with a national commission to address what the province says is a fiscal gap.
Such a commission would be the first since 1937 to look at the fiscal arrangements between the provinces and the federal government. Ontario Premier Dalton McGuinty presses for the analysis in an op-ed piece scheduled to be published Friday in CanWest newspapers across the country.
"I believe passionately in Canada. I believe in federalism. But I am equally convinced that the fiscal arrangements designed to support it are terribly outmoded and in need of significant reform," McGuinty says in the article.
Amen to that. At the moment, one of the great problems with the current Liberal provincial-relations strategy has been its complete failure to compare priorities. The equalization side deals may be justifiable in principle, but there's been no principled reason for the way money has been tossed around except for the relative political bargaining power held by a given province. Needless to say, that's a problematic recipe for responsible spending - and while it appears that nobody's losing out in the short term, the long-term effect is a much weaker federal system.
That said, McGuinty seems to miss a very important point. While Ontario will surely claim it's facing an unfair fiscal gap, it's far too early to prejudge just what such a commission would decide. There's thus some risk for McGuinty in proposing the commission, as his province could "lose" as easily as it could "win" in the final analysis
For the country as a whole, on the other hand, a commission should have some hugely positive effects.
First, it should shut down the side-deal structure as long as the commission is in progress. From a provincial standpoint, there'll be little incentive to put resources toward demanding a temporary fix rather than putting forward the best possible case on a permanent program. Meanwhile, the federal government will get temporary political cover from any immediate demands that provinces do make.
Second, during the course of the commission it should provoke a sorely-needed public debate on the question of the purpose of equalization. I've mentioned before my position that the ultimate goal should be meaningful equality of opportunity from province to province, without guaranteed equal results. But the submissions should run the gamut from virtually no equalization to nearly total equalization, and that debate would be the most meaningful policy discussion this country has seen in recent memory, bringing back to the table questions of both the services which we expect from government in general, and the relative control that each level of government should hold over those services.
Finally, after all is said and done, there's the benefit of the end result - presumably a system that most Canadians are happier with, and that the rest can at least see was the production of a transparent process with the good of the country in mind. And if that means less of the current sniping, both between provinces and between levels of government, then maybe it'll be another 68 years before we need to go through the process again.
My main fear is that the commission would be too good an idea to be put into effect - that it would have the effect of moving issues above partisan lines which the Liberals see as holding the potential for partisan gain. But now that McGuinty is on board, it'll be awfully tough for Martin to outright dismiss the prospect. Kudos to McGuinty, and hopefully this worthwhile idea will soon become reality.
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