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Harper's lust for votes!!?

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    Harper's lust for votes!!?

    Harper's costly lust for Quebec votes



    MARK MILKE

    Financial Post



    Tuesday, January 23, 2007



    The federal Conservatives are about to provide an example of how rational political behaviour can lead to irrational economic results. As it happens, the guinea pigs in this demonstration will be taxpayers in Ontario, British Columbia, Alberta and, to a lesser degree, those in Saskatchewan. Taxpayers in those provinces -- the "have" provinces, according to the federal equalization program -- will soon transfer even more cash to other provinces, the so-called "have-nots," especially Quebec, and this thanks to the Tories' desire for more votes in la belle province.

    This will happen, if a French CBC report is to be believed, because the Conservatives will soon include half of natural resource revenues in calculations of equalization payments. Quebec Premier Jean Charest is hoping for at least an extra $1.5-billion.

    For readers new to equalization, the program takes money from wealthier provinces and distributes it to poorer ones. The formula includes a five-province average of revenue-raising capacity. The general justification for equalization is that it allows have-not provinces to provide roughly equal government services to their citizens.

    It's a weak argument. In fact, equalization encourages less-wealthy provinces to pay above-market wages to provincial civil servants and others, even though the cost of living is substantially less in, say, St. John's, Quebec City or Charlottetown, compared with Toronto, Calgary and Vancouver. It also encourages have-not provinces in their complacency on smarter economic policy and allows them to retard sensible development. (The Newfoundland government's continual Hugo Chavez-like demands regarding offshore-oil development is a case in point.)

    Also, far from equalization providing provincial governments with "roughly equal" services, some provinces use the cash to provide programs unavailable in the very provinces where equalization money originates. As an example, think of Quebec's heavily subsidized daycare program.

    Quite apart from the indefensible subsidies in Quebec's daycare program itself -- the day care of a two-income family is subsidized to the same extent as that of a single mother -- the reality is that taxpayers in Ontario, Saskatchewan, Alberta and B.C. subsidize universal day care in Quebec, while no similar universality exists in their provinces.

    Defenders of equalization argue that, because it is a federal program built with federal tax dollars, no province loses money. I.e., it's not as if provincial governments cut the cheques. That's technically true, but irrelevant.

    There's only one taxpayer. When Ottawa spends more federal tax money on have-nots, it does so courtesy of taxpayers in B.C., Alberta, Saskatchewan and Ontario. Also, more federal money spent on equalization means less available for tax relief or some other purpose. Expressed another way, pretend there were no governments, but equalization yet existed. Families in the four have provinces would directly write the cheques to families in the six have-not provinces (and three territories).

    And such cheque writing is expensive, especially when all federal transfers are lumped together and net federal fiscal contributions are calculated per family. Then, the severe imbalance for Canadian families in different provinces becomes even more apparent

    As shown in a four-decade overview calculated in 2005 by the University of Calgary's Institute for Sustainable Energy, Environment and the Economy, the average Ontario family of four paid $3,032 annually to other provinces between 1961 and 2002, while a B.C. family gave $1,712 each year. An Alberta family shelled out more than $10,000 every year. (Saskatchewan is an anomaly in this calculation. That province is a "have" according to equalization calculations, but is a net recipient of federal transfers when other programs are included.)

    Now the Tories want to increase equalization. That will make those imbalances more severe in most cases and do so by punishing B.C., Alberta and Saskatchewan by including half of all resource revenues in equalization calculations. Saskatchewan

    Finance Minister Andrew Thomson properly called it when he said the Conservatives are trying to "buy Quebec votes with Western oil."

    Saskatchewan is not expensive to live in, but the on-the-ground reality of increased equalization payments is that taxpayers in the other have provinces -- the high-cost provinces -- will see more of their tax dollars funnelled to those who live in low-cost regions.

    There will always be some net federal transfers between provinces. That's unavoidable. If one province has low unemployment, federal Employment Insurance premiums will subsidize those with high unemployment. Also, equalization is a constitutionally protected transfer program. But that doesn't mean equalization has to be absurdly generous, or that it has to be increased.





    - Mark Milke is the author of A Nation of Serfs?

    © National Post 2007

    #2
    Mr. Harper is walking a tightrope and I doubt he will be able to pull it off!
    He's chasing Quebec votes at the expense of the west, thinking they will support him? In Alberta they probably will...but I doubt they will in Saskatchewan?
    And they shouldn't! Talk about a kick in the teeth...you finally get to the point where you can see a bit of light at the end of the tunnel...and your own "boy" slams the door shut so he can buy some French votes!
    This is the party that was going to do politics differently? This is the party that was going to rule for "All of Canada"?
    As a seperatist I have no problem with the defeat of Harper and company! Bring in Dion, he's upfront about his views on stealing, instead of enduring this backstabbing garbage that Harper is trying! When Dion grabs the whole bag...maybe some people will start to wake up?

    Comment


      #3
      Saskatchewan people this time will either vote liberal or conservitive but the NDP is Done like dinner.
      The equalization that Calvert is pushing is only on the radar of true NDPs every one else has other major wories and its what the NDP is doing to Saskatchewan. Calvert is trying in typical NDP fasion when your on a sinking ship blame ottawa for everything. Well Saskatchewan is Booming try to hire any one (yes all the good workers are in Alberta) but our oil patch is going strong, Ag is up and running again (No thanks to stupid Liberal Programs CASIP) Minning is booming (Diamonds Uranium Potash) Manufacturing is also up their. But our typical NDP is blaming ottawa GIVE ME A BREAK!!!!!!!!!!!!!

      Comment


        #4
        I won't defend your provincial NDP government! I have always believed they are the problem not the solution! Saskatchewans new prosperity happened DESPITE that government!
        But consider this: If the Saskatchewan Party forms the next provincial government...do you think they will happily accept this equalization scheme? I don't think so.
        800 million isn't chicken feed? And make no mistake, whatever provincial government you elect, that is what you are giving up? To be sent to Quebec! That is the bottom line.

        Comment


          #5
          Rumor has it Calvert will call an election on monday!!

          I have no excitment about the Sask Party. After watching Harper...I again, will not be given to high expectations.

          From what I hear liberals are fermly in control of the party just like they were in control of the Devine bunch.

          But I will take pleasure in watching the NDP bite the dust. Like babies governments should be changed often...so often they never qualify for their special pensions.

          Comment


            #6
            Yes poor Quebec is a have not province go figure that one!
            But Mr Calvert is a typical preacher give you heck on Sunday sermon then take your money after he is done talking.
            This is a tired NDP government that needs to be put to sleep, Rural Sask has such strong hate for them and its finally getting to the city people to.
            Now on equalization the 800 million will be nothing as long as were a have province its when we fall below that that it comes into the picture.
            think of it this way You have a job that's paying great wage but still collecting welfare. That's MR Calvert's Idea. To bad when he is done we still have to pay him because he was premier.

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