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Spare the rod...

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    Spare the rod...

    Spare the rod...

    Monday, 16 May 2005
    Ric Dolphin


    A psychologist I know complains about all the youngish patients coming to him for therapy who can't handle life in the real world. The profile is familiar: twenty-somethings who've been allowed to stay at home, paying no rent and having few domestic responsibilities, even though they're full-grown and have jobs. Thus unencumbered, they can afford new cars, smart clothes and active night lives, whilst retaining a domicile in a comfortable middle-class neighbourhood. At some point--for reasons of marriage, whim, or a vestigial sense that a 28-year-old "man" or "woman" should not still be at home with mother-- they find themselves out of the nest and unable to cope with the responsibilities they were shielded from for so long. A few commit suicide; some get prescriptions for Zoloft or Celexa from my friend; some even suck it up and learn to cope with the horrors of second-hand cars and apartments without high-definition big screens. Others say to hell with it and go back to living with mommy and daddy.

    It's a bit reminiscent of Canada's equalization scheme. Like the coddled millennial man-child, a province is allowed to fail for as long as its little heart desires, always knowing that mother Ottawa will be there with a fistful of cash to bail it out of whatever fiscal bind it may get its sweet self into. Call it a welfare trap, call it a cycle of dependency, call it misguided parenting; it's the way this country has been run since Confederation. Guess what? All those have-not provinces that equalization was supposed to bring up to the level of self-reliance are still steadfastly attached to the federal teat. And--ironically enough--none is so attached as that distinctive mademoiselle who calls herself Québec.

    I say it's ironic because, in the Canadian politic, this province has been so long coddled, humoured and deferred to, that one sometimes forgets it's hugely rich in mineral, hydroelectric and agricultural resources, peopled by proud, educated and able citizens who should have no difficulty competing in the real world--who should, indeed, want to. How, after all, can one be master of one's own house while clinging to the fiscal apron strings?

    La belle province has become the quintessence of Canadian dependency. By dint of its population, Quebec receives the largest amount of transfer payments--close to $16 billion in 2004-05. That's roughly $2,000 net for every soul in the province--provided via Revenue Canada by the only two children of Confederation making it on their own, Ontario and Alberta. (Saskatchewan and B.C. are, thanks to oil and better management respectively, about to join the select group whose taxes help keep Quebec living in the style to which she feels entitled.)

    Through the perversity of equalization--the "glue that binds Canada" (in much the same way, I guess, as mac and cheese binds up my intestinally challenged old mum)--the more Quebec fails, the more she gets from the feds (i.e., Alberta and Ontario). I don't want to take you too deeply into the rabbit warren of the federal equalization formula, for that way madness lies, but, rudimentarily, it's based on bringing the revenue of a have-not province up to a five-province average. The average is calculated using 33 tax categories. Thus, when a province like Quebec suffers reduced taxes because of unemployment, businesses fleeing for Alberta, strikes, et cetera, equalization payments are increased to compensate.

    A few years ago, before the standing Senate committee on national finance, Université du Québec economics professor Michel Boucher was a lonely voice speaking out against "this perverse effect" and how it not only preserves unsound economies, "it also leads provincial governments to resist changes in their policy . . . by preventing provinces from having to deal with the costly consequences of their own policy. Equalization means that the cost of an ineffective provincial measure is passed along not only to its consumers and producers, but also to the residents of other regions."

    Equalization also removes much of the nasty and hurtful incentives for self-reliance--a theme that, from the Canada Health Act, to the Indian Act or the welfare state, runs deep in the marrow of this country's soft bones.

    The result is a province of 7.5 million (and declining), which remains the most taxed jurisdiction in the country, has an unemployment rate of nine per cent, a debt of $115 billion, and a deficit this year of $3 billion. And yet, like the Gen-Nexter who has maxed out his Visa, it clamours for yet more cash from mom and dad. Which is what Premier Jean Charest's government's caterwauling about "fiscal imbalance" is all about.

    During the 2003 election campaign, and in the year afterwards, Charest showed some promising inclinations towards fixing Quebec's fiscal mess. He spoke of "re-engineering" the place--cutting back the monstrous civil service, curbing the powerful public service unions, eliminating the deficit, reducing taxes and making the province attractive to North American industries more mature than the coddled likes of Bombardier.

    Polls suggested a majority of Quebecers were behind the curly pudge from Sherbrooke. His Liberal government won 76 of 125 seats in the national assembly. But the moment Charest attempted to prosecute what in Ontario, Alberta or B.C. might be considered an eminently necessary program, armies of unions and students hit the streets of Montreal and Quebec City and, with the usual Gallic éclat, started burning things. Liberal MNAs resigned. The mostly leftist French-language media stepped up its attacks. Raising the price of subsidized day care from $5 to $7 a day--quelle horreur! Subcontracting out a few government services--sacre bleu! Raising Quebec's awesomely low university tuition fees (9.2 per cent of the actual cost, compared to the Canadian average of 19 per cent)--gardez les barricades!

    Charest's approval rating soon slid below 30 per cent and continues to slip further. It's no secret that Quebec is the most left-wing jurisdiction in North America. And left wing in Quebec doesn't just mean celebrating gay marriage and setting records for abortion and divorce; it means an almost pathological distrust of the free market and individual initiative. Charest may have received 45 per cent of the popular vote, but only 42 per cent of voters had bothered voting. That means less than a quarter of the electorate supported him at the polling booth--a plurality apparent in the negative polls and histrionics afterwards.

    Faced with this reality, Charest followed the lead of his political mentor, the late Robert Bourassa, and crumpled. He stopped talking about "reengineering," abandoned his ambitious plans, for trimming government bloat, reducing taxes and cutting the deficit. Instead he reverted to Plan B--sucking more money out of Ottawa under that fine-sounding imperative of correcting that "fiscal imbalance." (It sounds better than "bummin' off the parents.") This plan had always been on Charest's back burner. His erstwhile finance minister, Montreal lawyer Yves Séguin, had earlier produced a paper for the PQ government on the subject.

    Charest, meanwhile, clothing himself in the noble vestments of greater provincial rights, had spearheaded the creation of the premiers' Council of the Federation, ostensibly to provide a common front in negotiations with Ottawa. And certainly during last September's health care talks it served that purpose (everyone came away with a tidy per capita allotment that was promptly peed away on raises to nurses and docs). But, as has since become all too clear to other provinces, the federation's primary raison d'être was to remedy the old fiscal whatsit--a remedy that would primarily benefit Quebec.

    In a nutshell, Quebec wants the equalization formula changed so that not just five, but all 10 provinces are used to calculate the national average tax rates. This means Alberta would be brought into the mix, instantly bringing up Quebec's entitlement by a couple of billion dollars a year. Although a smattering of the other basket-case provinces (New Brunswick, Manitoba and P.E.I.) support Quebec's plaint, the others do not--notably Ontario. Struggling with a deficit approaching $6 billion, the most populated province is already unhappy at contributing 23 per cent more in federal taxes than it gets back, wants that amount reduced, and is not about to countenance any increase for the spoiled baby of Confederation.

    This is the point at which the Council of the Federation becomes dysfunctional. It might also mean the beginning of the end of the whole Ponzi scheme called equalization. One lives in hope.

    However, like the pouting daughter who stamps her feet and threatens to break off all communication with the family, Quebec holds the perennial trump card of secession.

    The way things look at the moment, the separatist Parti Québécois will win the next provincial election and, thanks to Sponsorgate, their cousins in the Bloc will all but eliminate Quebec Liberals from the federal government. Bloc leader Gilles Duceppe, having taken things as far as he can federally, may well return triumphant to replace Bernard Landry as head of the PQ, then premier, then president of the proud sovereign republic.

    This would be fine with me and, I suspect, a growing number of Canadians--even Ontarians--who are finally getting tired of the tantrums (and the cost) of our prodigal province. Even politicians--long petrified by the stigma of "breaking up Canada"--could soon start changing their minds when Quebec stops delivering votes to all but the (separatist) Bloc. Clarity may suddenly overtake us and we'll realize it's finally time to nudge the little chick out of the nest.

    Only we should make sure she takes her Visa bills with her.

    #2
    For years I have wondered why we spend so much and try so hard to keep Quebec in Canada . If they really want to leave, then by all means they should go and become whatever they invision that they want to be.
    Told my sons that if they ever decided to run away from home mad, they would be welcome back but they STILL would abide by the rules of our home.

    I think that the biggest problem with Canada, other than the Liberals, is that most of the Provinces don't see themselves as part of a larger family....so the best thing for the Federal Government to do is give more autonomy to the provinces.

    Comment


      #3
      Sorry, but your analogy regarding equalization is total BULLSHIT.

      You as a farmer should know what BULLSHIT is.

      Equalization was nothing more than a scheme (well meaning, I am sure), to garner VOTES and has been used by successive governments (Liberal and PConservative) as leverage in the all-consuming Canadian struggle for attaining and maintenance of POWER.

      The "have-nots" willingly sign on to the scheme and prostrate themselves at the feet of federal dominance in order to receive 'something' for 'nothing'.

      The 'haves' (like Alberta) grit their pointy little teeth and while protesting a bit, still manage to brag about how they have done so well and 'don't mind' sharing the wealth.

      Any comments???

      Comment


        #4
        Actually wilagro, this little "have" from Alberta definitely resents sharing the wealth! As you as a very soon to be "have" will soon get your chance to send money east?
        Lets see, Alberta sends $12 billion east? So Ottawa can spend it on all those necessities in Quebec...like a canoe museum, or millions to French ad firms, or little Canadian flags for Quebec seperatists! Oh and lets not forget the wonderful gun registry?
        Yep, I definitely don't want to give up my money for those nifty liberal ideas!
        But have no fear, by next year Saskathchewan will be sending money east and you can feel quite happy knowing that you paid to keep Quebec roads in tip top shape while you rattle through the potholes in Saskatchewan! You will have the joy of knowing that your oil and gas are going to keep the fat cats in the east living the life they have become accustomed to.

        Comment


          #5
          Cowman...I too don't like the way Ottawa pisses our equalization money away. The whole scheme is badly flawed. I would scrap the whole program and start over.

          Quebec is definitely screwing us over under the present formulae and I believe that the Feds intended it to be so.

          I am an Albertan BTW, and while I believe that Alberta should contribute to Canada as a whole, I don't believe that other provinces should base their expectations AND budgets on our success.

          Comment


            #6
            Well wilagro, I apologize for thinking you were from Saskatchewan...Sometimes it is hard to remember where everyone lives here...now I'm not saying there is anything wrong with living in Saskatchewan...salt of the earth sort of people without a doubt!
            I suspect you are a solid Canadian citizen who is somewhat dismayed by all the garbage that has been happening? The thing I would hope you realize is this: Something is really, really wrong in this country and we can't change it? No matter what we do within confederation....we can't change it?
            This country has adopted policies that just aren't sustainable? We can't sacrifice all the people for one province(Quebec)?
            This is really what this is all about. The scandals seem to always involve Quebec and the politicians from Quebec?
            I believe it is time for our brothers in Ontario and the Atlantic provinces to realize that it is time...time to let Quebec go! Time to realize that other people have some problems with the way this country is structured and ran?
            I believe the people of the west have a fairly common vision of what they want, despite some differences? Actually I suspect a whole lot of Ontario might share those ideas as well as the Maritimes? Unfortunately it just ain't working?

            Comment

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