Harper snubs McGuinty

[maxweber]

no, no, after you..

And the other parties are hermeticaly sealed off from their American counterparts maybe ? Clinton and Chretien didn't have a mutual admiration society/support group/circle jerk going between them ?

Good point. But the mordent proof that this relationship amounted to little more than golf and gee-whiz was the failure to solve any larger issues, especially softwood lumber. Chretien may have had quite a little jones for slick willy, but he wasn't about to roll over for U.S. interests. Canadian paleo-conservatives have a virtually pathological envy of the U.S., and enter dealings with it on the premise that their own country is in the wrong. Again, Harper's obscenely supine softwood lumber deal, consummated in lunatic haste, speaks to this bizarre and ugly sentiment.

In terms of Canadian national interest, having Harper (and Mulroney before him) as Canadian P.M. is like having Joe Lieberman as U.S. President.

MW

 

[Truncador]

In terms of Canadian national interest, having Harper (and Mulroney before him) as Canadian P.M. is like having Joe Lieberman as U.S. President.

The problem goes far beyond parties, to wit, for historical reasons Canadians and their leaders do not understand the concept of "national interest" and what a State must do to secure that interest to begin with, and even if they did the cultural Brahmans would veto the idea as uncouth and immoral (hence the recent defense shield fiasco, in which the Liberals casually sacrificed the national interest for sake of keeping up appearances before the paleo-Leftists).

 

[slowpoke]

McGuinty complains about new funding formula

This is an interesting look at the equalization debate. Ontario will be expected to pay more while some of the have not provinces have lower tuition and taxes. In the province of Quebec, the provincial gov't is charging less than half as much for tuition as Ontario charges and BC has lower taxes.

http://www.canada.com/topics/news/p...=4771186f-e4b4-4d03-93ef-01039c0669d3&k=73472

TORONTO -- Already at odds with Prime Minister Stephen Harper over money matters, Ontario Premier Dalton McGuinty lashed out at his provincial counterparts Wednesday, insisting the national equalization program shouldn't be enriched to help poorer provinces that chose to keep tuition low and slash taxes.

"How come our tuition happens to be so much higher than it is in some equalization-receiving provinces?" McGuinty asked on his way into a cabinet meeting.

"At this time here in Ontario, we have the lowest levels of funding on a per-capita basis for our colleges and universities. We have the second-lowest level of funding for our hospitals. We have the lowest overall program spending in the country on a per-capita basis. We're now subsidizing lower levels of taxation in some equalization-receiving provinces than we have here in the province of Ontario.

"To increase equalization more at this time would be unfair to Ontarians."

McGuinty's salvo dismissed later in the day as "nitpicking" by a Manitoba official comes when the majority of poorer provinces have embraced a report commissioned by all premiers that suggests increasing the amount of money set aside by the federal government for less-well-off jurisdictions to $5 billion.

Equalization payments, which come out of federal tax revenues, are used to subsidize less affluent provinces so Canadians nationwide have access to reasonably comparable levels of public services at reasonably comparable levels of taxation. Ontario argues if the federal government pours more money into equalization, it will have fewer resources available to help finance health, education and other needs in Canada's most populous province.

McGuinty on Wednesday also suggested the have-not provinces could pay for more of their own needs if they were willing to accept higher taxes or tuition rates.

The average tuition fee for a bachelor of arts program in 2004-2005, for instance, was $4,100 in Ontario universities and $1,668 in Quebec, according to data compiled by the Council of Ontario Universities.

Quebec this year will receive $5.5 billion in equalization payments. That would rise to $7.7 billion under the proposed new formula.

On the taxation issue, McGuinty refused to single out any one province for specific criticism. Ontario officials later cited British Columbia as a jurisdiction that has lower taxes than Ontario, even as it collects $459 million in equalization payments this year.

B.C. Premier Gordon Campbell spokesman Mike Morton said this year's aid payment is a leftover from when the province's economy was in trouble.

"What we'll get this year is because of our situation a couple of years ago when we were a have-not province," he said. "B.C. is no longer a have-not province.".....

 

[someone]

Slowpoke, thanks for getting the thread back on topic. Besides the equalization program itself, there is a hell of a lot in transfers from have to have not provinces through other programs. Take EI as an example. By having generous rules for seasonal workers, those in communities with no hope of ever getting full time employment have little incentive to move to areas of the country where they are needed. Not only are such programs a cost to those in Ontario who end up paying the extra premiums to finance the system, but it really does create that Harper once called a culture of dependency in this part of the country. I admit that it is sad to see a way of life ending, but elsewhere it is a process that has gone on for centuries. My point is that when it comes to intergovernmental transfers and interregional transfers, it is not enough to just look at the formal equalization program. As I mentioned in another post, whether equalization is made mre or less generous is irrelevant unless you take into account what is going on in other programs. I would prefer to see many of the transfers in the form of equalization where they are transparent rather than the current system where many of the transfers are both not transparent and often lead to more inefficient economic outcomes.

 

[slowpoke]

Slowpoke, thanks for getting the thread back on topic. Besides the equalization program itself, there is a hell of a lot in transfers from have to have not provinces through other programs. Take EI as an example. By having generous rules for seasonal workers, those in communities with no hope of ever getting full time employment have little incentive to move to areas of the country where they are needed. Not only are such programs a cost to those in Ontario who end up paying the extra premiums to finance the system, but it really does create that Harper once called a culture of dependency in this part of the country. I admit that it is sad to see a way of life ending, but elsewhere it is a process that has gone on for centuries. My point is that when it comes to intergovernmental transfers and interregional transfers, it is not enough to just look at the formal equalization program. As I mentioned in another post, whether equalization is made mre or less generous is irrelevant unless you take into account what is going on in other programs. I would prefer to see many of the transfers in the form of equalization where they are transparent rather than the current system where many of the transfers are both not transparent and often lead to more inefficient economic outcomes.

All federal tax money comes from you and me. So I'd love to see exactly where it all goes, incuding hidden transfers like seasonal EI. Looks like equaliztion payments are only a small part of the story but at least it is visible. Is it safe to assume the hidden transfers are staying about the same? Shouldn't we expect the fed to spend federal tax dollars on these hidden transfers without requiring extra contributions from the few "have" provinces. I agree with you that it would be ideal to have an overall financial picture but these issues come at us one at a time so we see them in isolation or not at all.

 

[maxweber]

The problem goes far beyond parties, to wit, for historical reasons Canadians and their leaders do not understand the concept of "national interest" and what a State must do to secure that interest to begin with, and even if they did the cultural Brahmans would veto the idea as uncouth and immoral (hence the recent defense shield fiasco, in which the Liberals casually sacrificed the national interest for sake of keeping up appearances before the paleo-Leftists).

That's a bitter assessment, and of course I disagree with the (slightly paranoid) second half of the sentence. But, as a long-time American resident (and now citizen) of Canada, the first part is spot on. I'd put it roughly this way: the left/Liberals have a still-rudimentary notion of nation [self-]interest, the right/Conservatives have virtually none.

MW

 

[someone]

All federal tax money comes from you and me. So I'd love to see exactly where it all goes, incuding hidden transfers like seasonal EI. Looks like equaliztion payments are only a small part of the story but at least it is visible. Is it safe to assume the hidden transfers are staying about the same?

I really don’t think it is safe to assume that when they are supposed to be renegotiating education transfers and the like. I would prefer to see them negotiate these things at the same time as they are all interrelated (although I admit the negotiations would be very complex). Indeed, I would like to see things like health and education returns to the original system of per capita transfers so that most equalization would take place within the equalization program. It seems to me that in many ways have not provinces are being equalized twice when both transfers for health and equalization contain elements of equalization.

 

[slowpoke]

I really don’t think it is safe to assume that when they are supposed to be renegotiating education transfers and the like. I would prefer to see them negotiate these things at the same time as they are all interrelated (although I admit the negotiations would be very complex). Indeed, I would like to see things like health and education returns to the original system of per capita transfers so that most equalization would take place within the equalization program. It seems to me that in many ways have not provinces are being equalized twice when both transfers for health and equalization contain elements of equalization.

Here's a little tidbit about Flaherty resheduling payments to Ontario pending a review of the fiscal imbalance. Ontario had a May 2005 signed agreement with Ottawa for $6.9 billion in funding over 6 years but the timing of the payments has now been changed. Flaherty has resheduled $384 million of the $589 million that was due Mar 31/06. He claims he's just holding it back until after some kind of consensus is reached with the other provinces. Harper is giving McGuinty and Ontario plenty of reasons not to trust him:

http://www.theglobeandmail.com/servlet/story/RTGAM.20060511.wxontario11/BNStory/National/home

Federal Finance Minister Jim Flaherty says his budget includes funding for every penny of a $6.9-billion accord the previous government inked with Ontario. But he says Ontario will not get a portion of the money until he fixes the so-called fiscal imbalance between the federal government and all the provinces -- a move that is causing anxiety around Queen's Park.

"We set aside the money. It's in the fiscal plan for the Government of Canada and the agreement will be fully honoured," Mr. Flaherty said in an interview yesterday.

Under the accord between former prime minister Paul Martin and Ontario Premier Dalton McGuinty, the province was to receive about $5.7-billion over five years for a variety of programs, including labour-market training, postsecondary education and public transit. The agreement was later extended by one year and the funding was increased to $6.9-billion.

For the fiscal year that ended March 31, Ontario was to receive $589-million, according to a memorandum of agreement signed by the federal and provincial governments in May, 2005.

But Mr. Flaherty has revised the schedule for paying funds totalling $384-million for a number of programs, including postsecondary education and labour-market training. These funds were initially to have been dispersed before March 31. In the federal budget tabled last week, the government says the timing of the funding will be part of discussions among all the provinces on the fiscal imbalance.

"This is a six-year agreement," Mr. Flaherty said. "We're not holding anything back."

Nevertheless, the federal budget has left Ontario Finance Minister Dwight Duncan with plenty to worry about and his staff seeking clarification over whether Ottawa has reneged on the deal.

"My main concern is that the money that was there in the agreement with Martin as cash is no longer there," Mr. Duncan told reporters yesterday. "My other concern is that we're getting mixed messages from Ottawa."

Mr. Duncan singled out the funding in the accord for climate change as an area of concern. According to a letter he received from Mr. Flaherty, Ontario is still getting all the money it was promised for climate control, but the province will no longer be able to devote the lion's share of the $538-million to closing its coal-fired generating plants. That's because $208-million of the climate-change money will be lumped in with funding for public transit and will have to be spent on measures to reduce the number of cars and trucks on city streets.

Mr. Flaherty defended the change. "Cars, trucks and buses are the No. 1 polluters in Canada," he said. "The more we can reduce motor vehicles, the greater effect it will have on greenhouse gas emissions and pollution."

One observer of Prime Minister Stephen Harper said the changes could be aimed at trying to silence Mr. McGuinty's campaign for a fairer financial deal from Ottawa.

Yesterday, Mr. McGuinty appealed directly to Ontarians. He said a typical family of four will contribute $1,555 this year to support programs in other provinces that receive equalization payments, the national system for sharing cash with poorer regions.

"I just think it's important for Ontarians to understand what's at stake here," he told reporters....

 

[someone]

When the Atlantic Accords were signed, I suspected that it may not have been in the long term interests of provinces like Newfoundland. Fiscal Federalism has never really been in the self interest of Ontario. The only reason it exists is that Ontarians are likely the only Canadians that truly see themselves as Canadians first (I admit that some may think I’m exaggerating a bit but I don’t think it is that much of an exaggeration). That is partly because as the old saying goes, “what Ontario wants, Canada gets”. However, the fact remains that fiscal federalism only survives because unlike Newfoundlanders, Ontarians think of themselves as Canadians first. Thus, they traditionally have not really looked at it as money going from Ontarians to nonOntarians but rather as money going from some Canadians to other Canadians. Once Ontarians stop thinking like that and an Ontario premier decides to gain political support by playing the same, “circle the wagons, it’s us against the rest of the country” game the regions often play, the system falls part. It seems that McGuinty is now playing that game. He may be justified in playing that game but in my travels I’ve found that every province thinks it is justified and will cite you many examples of how they have been screwed over by the rest of the country (Today I was in a coffee shop and overheard a ridiculous conversation on how Newfoundland had its arm twisted to enter confederation under adverse terms. It all started because a tourist asked someone about the newspaper called The Independent which he was reading.). At some point, I think that Canada is really going to have to start over, decide that bygones are bygones and get a comprehensive agreement for the future. Such an agreement will likely not leave anyone happy. However, it is through such compromises that Canada as remained united since confederation.

 

[slowpoke]

When the Atlantic Accords were signed, I suspected that it may not have been in the long term interests of provinces like Newfoundland. Fiscal Federalism has never really been in the self interest of Ontario. The only reason it exists is that Ontarians are likely the only Canadians that truly see themselves as Canadians first (I admit that some may think I’m exaggerating a bit but I don’t think it is that much of an exaggeration). That is partly because as the old saying goes, “what Ontario wants, Canada gets”. However, the fact remains that fiscal federalism only survives because unlike Newfoundlanders, Ontarians think of themselves as Canadians first. Thus, they traditionally have not really looked at it as money going from Ontarians to nonOntarians but rather as money going from some Canadians to other Canadians. Once Ontarians stop thinking like that and an Ontario premier decides to gain political support by playing the same, “circle the wagons, it’s us against the rest of the country” game the regions often play, the system falls part. It seems that McGuinty is now playing that game. He may be justified in playing that game but in my travels I’ve found that every province thinks it is justified and will cite you many examples of how they have been screwed over by the rest of the country (Today I was in a coffee shop and overheard a ridiculous conversation on how Newfoundland had its arm twisted to enter confederation under adverse terms. It all started because a tourist asked someone about the newspaper called The Independent which he was reading.). At some point, I think that Canada is really going to have to start over, decide that bygones are bygones and get a comprehensive agreement for the future. Such an agreement will likely not leave anyone happy. However, it is through such compromises that Canada as remained united since confederation.

You're right about Ontarians thinking about Canada first. That's one of the reasons we've elected so many Liberal PMs from Quebec. We wanted to make sure our PM was acceptable to Quebecers so they wouldn't separate and screw up the whole country.

But now we've got a PM who seems to want a smaller role for the central government and greater autonomy for the provinces. With only a minority mandate, Harper wants to reinvent Canada and, coincidentally, he wants Ontario to pay even more in equalization. A handful of former have-not provinces now have considerable resource revenue streams but, conincidentally, Harper wants to exclude resource income from his assessment of provincial wealth. So it is OK for Ontario's manufacturers to contend with the strong dollar but Alberta can pretend it has no energy income. This will not fly.

Harper also wants to "reshedule" about 2/3 of a promised federal transfer that was due a month and a half ago and wait to see if it survives the next round of provincial equalization squabbling. He's behaving more like king rat than a national leader. Ontario obviously can't afford to keep thinking about Canada first. We've become everyone's meal ticket. The reason Ontario kept putting Canada first was because we were always treated fairly by Liberal and Conservative governments alike and we believed in Canada. We were also the only "have" province for many years so we paid more than we got back but nobody seemed to mind. Canada came first. But Harper is about to cross the line and upset that delicate balance. He's already given McGuinty enough material for a civil war - never mind a provincial election. John Tory is also misreading this with his Mr Toady criticism of McGuinty for being too vocal in his defence of Ontario. Tory should be keeping his head down right about now because Harper is not going to be able to defend this if McGuinty wants to hang his hat on it.

 

[someone]

I didn’t mean to imply so much that Ontario thought of Canada first so much as they see themselves and Canada as being the same thing. When they supported the National Energy Program they were definitely not thinking of Canada first. I think such programs had as much to do with their electing PMs from Quebec as the reasons you mention. Moreover, now that the economic and political power of the country is slowly slighting west, they are having a hard time mentally adjusting. Although still very powerful, I can’t see them ever being able to force another NEP on the country. I would say that a smaller role for the central government and greater autonomy for the provinces is a good thing. However, as I’ve posted before, I do think equalization has created a culture of dependency in much of the country. Thus, I’m not against a reduction in overall equalization (although, when I say this, I more concern with overall equalization then just the equalization program). I’ve also said that I think removing resource revenues from the formula would be the mistake (however, my reasons have more to do with economic efficiency) but Alberta will still be a have province, so I don’t see the point of your example (Newfoundland and Sask would be better examples to use). It will not affect Alberta. It just means that if the government went from the current 5 pronvince standard to a 10 province standard, they would not have to equalize up to Alberta's level of resource revenues (currently, Alberta is not one of the five provinces have nots are compared against). I think that the rescheduling of the transfer you speak of is a minor issue so I’m not going to argue about it. Every province can come up with examples of how Ottawa is out to get them and I get tired of it. I can’t comment about the Tory-McGunity politics you mentioned as I have not been following it (I’ll likely catch up a bit later this summer as I’m planning to spend a few weeks in Toronto)

 

[slowpoke]

I didn’t mean to imply so much that Ontario thought of Canada first so much as they see themselves and Canada as being the same thing. When they supported the National Energy Program they were definitely not thinking of Canada first. I think such programs had as much to do with their electing PMs from Quebec as the reasons you mention. Moreover, now that the economic and political power of the country is slowly slighting west, they are having a hard time mentally adjusting. Although still very powerful, I can’t see them ever being able to force another NEP on the country. I would say that a smaller role for the central government and greater autonomy for the provinces is a good thing. However, as I’ve posted before, I do think equalization has created a culture of dependency in much of the country. Thus, I’m not against a reduction in overall equalization (although, when I say this, I more concern with overall equalization then just the equalization program). I’ve also said that I think removing resource revenues from the formula would be the mistake (however, my reasons have more to do with economic efficiency) but Alberta will still be a have province, so I don’t see the point of your example (Newfoundland and Sask would be better examples to use). It will not affect Alberta. I think that the rescheduling of the transfer you speak of is a minor issue so I’m not going to argue about it. Every province can come up with examples of how Ottawa is out to get them. I can’t comment about the Tory-McGunity politics you mentioned as I have not been following it (I’ll likely catch up a bit later this summer as I’m planning to spend a few weeks in Toronto)

Isn't there a measure of degree or magnitude in our assessment of who is a have province? For example, if you deducted their resource revenue, Alberta may still be a have province but it wouldn't be as much of a have as it would be when you included their resource revenue. So they'd pay less in equalization if they could shield their resource income wouldn't they? Ontario doesn't have that option.

Ontarians generally thought it was a competitive advantage for the whole country to have a nationally fixed price for oil. The oil industry was perceived as predominantly US owned back then so it was easy to buy into this notion that the oil belonged to Canadians anyway so why should we pay through the nose for our own resources? The price seemed high enough that the oil companies would make plenty of money and that was that. In retrospect, it was all a socialist boondoggle but, like free trade, the average Canadian didn't really know much about it. They trusted their leadership. And it wasn't just Ontario. You probably equate Ottawa with Ontario but I'd be surprised if all the provinces except Alberta weren't happy to have reduced prices for oil & gas. When you say Ontario supported NEP, was there something special about our support? I wan't paying that much attention but it felt like a much more general thing.

 

[someone]

Isn't there a measure of degree or magnitude in our assessment of who is a have province? For example, if you deducted their resource revenue, Alberta may still be a have province but it wouldn't be as much of a have as it would be when you included their resource revenue. So they'd pay less in equalization if they could shield their resource income wouldn't they? Ontario doesn't have that option.

It is individual taxpayers that finance equalization, not provincial governments. Technically even taxpayers in half not provinces finance the federal tax revenues that get spent on equalization. However, as taxpayers in have provinces have higher incomes and given that they don’t get money back in the form of equalization payments to their provincial governments, they end up being net payers into the program and those in have not provinces are net receives. Removing resource revenues will not change the income of Albertans and hence will not affect the taxes they pay. As I mentioned when I edit my last post (I think you started your response before you saw my edit) what it would do is allow the feds to meet the pressure of moving from a five province standard back to a ten province standard. One reason they went to a five province standard was that with Alberta’s oil revenues in the formula, even Ontario would have been entitled to equalization. Clearly, the system would break down if only Alberta was a net payer into the program. It may be the richest province per capita but in terms over absolute size, Ontario is needed. By removing Alberta from the reference group (and the four Atlantic provinces) they were able to keep resource revenues in the formula (as I think should be the case).

Ontarians generally thought it was a competitive advantage for the whole country to have a nationally fixed price for oil. The oil industry was perceived as predominantly US owned back then so it was easy to buy into this notion that the oil belonged to Canadians anyway so why should we pay through the nose for our own resources? The price seemed high enough that the oil companies would make plenty of money and that was that. In retrospect, it was all a socialist boondoggle but, like free trade, the average Canadian didn't really know much about it. They trusted their leadership. And it wasn't just Ontario. You probably equate Ottawa with Ontario but I'd be surprised if all the provinces except Alberta weren't happy to have reduced prices for oil & gas. When you say Ontario supported NEP, was there something special about our support? I wan't paying that much attention but it felt like a much more general thing.

Sask was also hurt by the NEP. I don’t disagree that many people in Ontario used the arguments you describe. I lived in Ontario most of that time and I recall some of them. However, as I’m sure you know the reality was that Canada became a net importer of oil and ended up subsidizing imported oil from the middle east instead of having the money flow to a Canadian province. In my mind the key point is your statement “Ontarians generally thought it was a competitive advantage for the whole country”. They have traditionally seen their interests and Canada’s as being the same. Sometimes they are right and sometimes, as with the NEP, they are not right.

 

[slowpoke]

I guess insofar as Ontario felt that we simply were Canada and that everyone else must feel pretty much the same as we, it follows that we wanted what was best for Canada because that was us. So there was probably less of an us vs. them sentiment here than anywhere else in the country. Ontario may have been unwittingly paternalistic and virtually oblivious to regional sensitivites but it wasn't intentional or calculated. We just blithely got on with the business of being at the centre of Canada. Now the differences that separate the various regions are more pronounced than before and there are more players with the means to become net contributors. So Ontario will inevitably adopt a more comparative stance over who gets what from whom. When we were the only ones with the means to pay extra, it didn't seem worth thinking about. But now we'll be measuring and demanding with the best of them. Harper may win approval in other parts of Canada for settling old scores against Ontario but all he'll really do is fan the flames of discontent and create divisions where there used to be none. Not a good way to win more seats or to help his buddy John Tory get elected.

 

[someone]

I guess insofar as Ontario felt that we simply were Canada and that everyone else must feel pretty much the same as we, it follows that we wanted what was best for Canada because that was us. So there was probably less of an us vs. them sentiment here than anywhere else in the country. Ontario may have been unwittingly paternalistic and virtually oblivious to regional sensitivites but it wasn't intentional or calculated. We just blithely got on with the business of being at the centre of Canada. Now the differences that separate the various regions are more pronounced than before and there are more players with the means to become net contributors. So Ontario will inevitably adopt a more comparative stance over who gets what from whom. When we were the only ones with the means to pay extra, it didn't seem worth thinking about. But now we'll be measuring and demanding with the best of them.

I don't debate any of this. I think your analysis is well stated.

Harper may win approval in other parts of Canada for settling old scores against Ontario but all he'll really do is fan the flames of discontent and create divisions where there used to be none. Not a good way to win more seats or to help his buddy John Tory get elected.

I’m not sure that this is intentional on Harper’s part but I can see how it might be seen like this from Ontario’s prospective.

 

[someone]

Rejig equalization to help poorer provinces: report

BTW, agree or disagree, the report was commissioned by the Liberals, not the Tories.

http://www.theglobeandmail.com/servlet/story/RTGAM.20060517.wxequaliz17/BNStory/National/home

 

[someone]

It looks like Ontario and Alberta have a common cause:
http://www.theglobeandmail.com/servlet/story/RTGAM.20060524.wequalization0524/BNStory/National/home

 

[slowpoke]

It looks like Ontario and Alberta have a common cause:
http://www.theglobeandmail.com/servlet/story/RTGAM.20060524.wequalization0524/BNStory/National/home

Since Alberta and Ontario don't want to pay more, they have a common goal. But your article mentions "a political showdown with Quebec and Ontario" so this will inevitably include some elements of traditional east-west animosity. The media will fan the flames as well. Watch out for a return of those NEP-era "Let those Eastern bastards freeze to death in the dark" bumper stickers before this is over.

I think Alberta is sending out pre-emptive signals to the eastern provinces that resource revenue is off limits as far as equalization is concerned. Harper apparently promised that resource revenue wouldn't be included in the calculations so Alberta is holding him to his word. Meanwhile Ontario is pre-emptively protesting that it is ridiculous for Alberta to be allowed to shield all that resource revenue. Quebec thinks it is unfair as well - especially since they'd benefit if they used all 10 provinces and included resources. I know Harper promised to address the fiscal imbalance with the provinces but he only has a minority so where is his mandate for all this tinkering? This goes to the heart of Canada's federation so a minority just doesn't cut it IMHO.

 

[someone]

Since Alberta and Ontario don't want to pay more, they have a common goal. But your article mentions "a political showdown with Quebec and Ontario" so this will inevitably include some elements of traditional east-west animosity. The media will fan the flames as well. Watch out for a return of those NEP-era "Let those Eastern bastards freeze to death in the dark" bumper stickers before this is over.

True

I think Alberta is sending out pre-emptive signals to the eastern provinces that resource revenue is off limits as far as equalization is concerned. Harper apparently promised that resource revenue wouldn't be included in the calculations so Alberta is holding him to his word. Meanwhile Ontario is pre-emptively protesting that it is ridiculous for Alberta to be allowed to shield all that resource revenue. Quebec thinks it is unfair as well - especially since they'd benefit if they used all 10 provinces and included resources. I know Harper promised to address the fiscal imbalance with the provinces but he only has a minority so where is his mandate for all this tinkering? This goes to the heart of Canada's federation so a minority just doesn't cut it IMHO.

As I said in the other thread, if Alberta's resource revenues are included, Ontario taxpayers will pay more in equalization. Thus, they should have a common cause with Alberta in keeping resource revenues out. I'm getting the impression that many posters may have the mistaken impression that it is provincial governments in have provinces that make equalization payments to half not provinces. As I stated in other posts, this is not the case, it comes out of general federal tax revenues. See either my post 53 in this thread or my post in the other thread.

 

[slowpoke]

True


As I said in the other thread, if Alberta's resource revenues are included, Ontario taxpayers will pay more in equalization. Thus, they should have a common cause with Alberta in keeping resource revenues out. I'm getting the impression that many posters may have the mistaken impression that it is provincial governments in have provinces that make equalization payments to half not provinces. As I stated in other posts, this is not the case, it comes out of general federal tax revenues. See either my post 53 in this thread or my post in the other thread.

I can see how it isn't in Ontario's interests to have Alberta's resources inflating the average of the 10 provinces and raising the benchmark etc. So I'm wondering why the Globe article talked about a showdown between Alberta and the eastern provinces. Maybe they were thinking about a showdown between Alberta and Quebec.