CANADIAN FISCAL IMBALANCE
The (Im)Balancing act
KRIS SAHAY
Ever since Stephen Harper and his Conservatives discovered that the key to forming the federal government lies in the hands of the Quebec voters, the prime minister has taken a fancy to dance to the tune called out by Quebec political leaders.
Since the beginning of the 20th century, Quebec has been trying to get the best possible deal from the various federal governments, be they Conservative or Liberal. Tax dollars are generated from the entire nation, coast to coast, and go into the federal coffers for all to benefit “equally,” regardless of the population of each province and irrespective of the concentration of the industries and other commercial activities in certain parts of the country. To be equitable and totally fair to every citizen, the national wealth must be dispersed on a per capita basis. That would be the dictates of common intelligence. But no! The distribution of the national wealth is decided purely on the basis of favouritism leading to the seriously flawed, and perpetually inconsistent formula spelled out by the political might mustered and displayed arrogantly by various provincial premiers.
The fiscal imbalance has been deliberately practised by all the federal governments from the dawn of Canadian political history. Every time the federal leaders try to cure the perennial plague of fiscal imbalance, they are threatened by the fiercely independent Quebec politicians, duly backed by the Quebec voters. They simply cannot stomach the idea of being treated at par with the rest of the country; instead they demand (and do get) a privileged status, merely because they always own the trump card in this monetary national game.
No Canadian prime minister wants to walk the fiscal tightrope for fear of falling off the precariously delicate monetary heights. To appease both the Quebec politicians and the voters, Harper gave Quebec an official role in Canada’s delegation to the United Nations Educational, Scientific and Cultural Organization(UNESCO). The Quebec government spends over $350 million on its various overseas consulate offices and missions, employing more than 275 civil servants abroad, at the expense of the national treasury. This financial burden is borne by all Canadian taxpayers. The Quebec government consistently demands more cash from Ottawa to feed its extravagant habit of expanding its sovereign influence — building ties with organizations such as the International Monetary Fund (IMF) at the expense of the rest of the country.
In order to fund their pet projects to specifically benefit the residents of Quebec, the provincial government wants the cash to come out of the equalization fund and therefore they want more cash in the disguise of the “fiscal imbalance correction” factor!
The fiscal imbalance, and the equalization formula as it exists today, has been causing some seriously unpleasant problems for Alberta and its current premier, Ralph Klein. The Alberta premier has told Harper to keep his hands off the tax revenues of the oil-rich province. Little does he know that the equalization monster is strictly a baby of the federal government and it has nothing to do with the revenues generated by the various provinces.
Nonetheless, both the equalization headache and the hornet’s nest of the fiscal imbalance have the makings of the devil’s potion, which must be swallowed very gently in small doses by Stephen Harper and his Conservative government. Records show that the current prime minister is only too happy to openly and candidly court the Quebec premier Jean Charest at the expense of Dalton McGuinty, the premier of the most populous province of Canada, accusing him of being an obstacle in achieving the so-called fiscal equity!
While the “two amigos,” Harper and Charest enjoy the well documented love-in, the “third amigo,” Ontario premier Dalton McGuinty, has steam coming out of both his ears. This kind of underhand, politically charged manoeuvering has been dangerously driving a poisonous wedge between the two most populous provinces of Canada. It does not take a rocket scientist to figure out to why Harper is afraid of McGuinty — it’s the “fiscal imbalance” and the “equalization program,” stupid!
By making Quebec the largest beneficiary of equalization, Harper and his Conservatives gain the most to the electoral perils of the Liberals. This kind of lowly political scheming and obsession with self-glorifying monetary games is doomed for self-destruction. History may judge Steven Harper very harshly, if this brand of polarized politicking leads to even deeper and darker “fiscal imbalance.”
Kris Sahay is a former student of the University of Manitoba.
