This enlightening study by Kenneth J. Boessenkool, a senior policy analyst now based in Ottawa, outlines a win-win strategy to reduce the overall cost of equalization and put more money into the hands of the provinces in the long term.
The time has never been better for the Atlantic provinces to lessen their dependence on federal transfers and to become masters of their own fate. Energy prices are high, shortages are emerging in Canada's major U.S. markets, and the Prime Minister has responded favourably to U.S. requests to speed up the development of new energy supplies. Yet, on average, about 40% of provincial budgets in the four Atlantic provinces still come from federal transfers, most in the form of equalization. AIMS President Brian Crowley and AIMS author Ken Boessenkool outline a straightforward solution to this dilemma in this op-ed piece published in The National Post. Removing nonrenewable natural resources from the equalization formula would provide the Atlantic provinces with the incentive to rely on natural resources development as a centrepiece of their economic strategy in place of pleading for larger transfers from equalization. Gone would be the days when an Atlantic province might forfeit a nickel
Emphasis must be on building Atlantic region’s capacity to pay its own way.
This is the first report in AIMS Equalization Series. After 44 year and $180 billion, the Atlantic Provinces are not significantly ahead in their ability to be self sufficient.
The Liberal Party of Nova Scotia invited AIMS President Brian Lee Crowley to address its 2001 AGM on the question of whether or not the current federal equalisation programme is "fair" to Nova Scotia and what changes might be appropriate to improve the programme. In his talk, Crowley argued that the incentives implicit in equalisation had undermined provincial efforts to develop the local economy, frustrated efforts to make greater progress on achieving fiscal discipline, and damaged the link between taxing and spending which is at the heart of democratic accountability.
Bernard Landry is right that Quebec is getting a raw deal from Canada. But he couldn't be more wrong about why. Just the other day the new Quebec Premier was struggling manfully to explain why a fresh injection of $1.5-billion in equalization payments was yet another humiliating affront to the province's pride: Equalization merely puts a number on the extent to which federalism short-changes Quebec. Quebec's problem is neither federalism nor sovereignty, but rather the abject failure of the province's distinct economic recipe.
Dans un article publie dans Le Devoir, le president de AIMS, Brian Lee Crowley, ainsi que le directeur-executif de l'Institut economique de Montreal, Michel Kelly-Gagnon, expliquent les effets nefastes de 40 ans de paiements de transfert sur le comportement du gouvernement du Quebec ainsi que sur l'economie de la province. La conclusion des auteurs? "Le meilleur moyen d'assurer un avenir plus prospere a la Belle Province n'est pas de la rendre independante d'Ottawa mais plutot de la rendre independante de l'Etat tout court, le provincial comme le federal. Le meme message peut tres bien s'appliquer a l'ensemble du Canada."
Nova Scotia Premier John Hamm has taken his 'Campaign for Fairness' to Ottawa, where he is calling for a better deal for the province on equalisation and natural resource revenues, among other things. But according to AIMS president Brian Lee Crowley and Alberta commentator Ken Boessenkool, Premier Hamm is neglecting the potential for collaboration on these issues with other provinces, such as oil-rich Alberta. In this National Post op-ed piece, Boessenkool and Crowley lay out a strategy for dealing with natural resource revenues that would strengthen all the provinces, while helping equalisation-receiving provinces off dependence on federal transfers. Publication: NP, 9 February 2001
Shortlisted by the Donner Canadian Foundation, Retreat from Growth analyses the effects of 40 years of massive transfers and other forms of government intervention designed to close the disparity gap between Atlantic Canada and the rest of the country.
Both Brian Tobin and Stockwell Day have been wooing Atlantic Canadians with promises to end the anti-development bias of the federal equalisation programme. In an op-ed piece in the Globe and Mail, AIMS President Brian Lee Crowley argues that they're on the right track, but neither has gone nearly far enough in their plans to fix equalisation's perverse effects.