07 April 2008

"I can't wait to see the day when we don't get a dollar."

One of the latest documents to emerge from the Halifax-based Atlantic Institute for Market Studies challenges many of the assumptions about Equalization and about the relative positions of the provinces across the country.

For example, consider the provision of basic services like healthcare and education:

    • Ontario had 2.8 hospital beds per thousand and Alberta 3.30. Manitoba had 3.82 and Newfoundland and Labrador had 4.35;
    • Newfoundland and Manitoba had 10.7 and 9.6 nurses per thousand respectively. Alberta had 8 and Ontario 7.1.
    • The student-teacher ratio in elementary and secondary schools are 13.6 for Newfoundland and 14.5 in Manitoba. For Ontario and Alberta, the figures are 16.6 and 16.9.
    • Ontario has only half the number of judges, in relation to population, as Newfoundland and has by far the fewest of all provinces;
    • Total public sector employment per 1000 population in Ontario is 81, Alberta, 83. Quebec, 92, Newfoundland is 105, and Manitoba, 117.

Not exactly what you are used to hearing.

On the issue of provincial leadership, David MacKinnon's speech to the Empire Club of Toronto in February might sound a bit more familiar, but it is worth taking this commentary more seriously than some might at first blush:

Demands from other provinces are also made in wildly inappropriate ways that are little more than political blackmail – a game more easily played in the last few years of federal minority governments. A few years ago Premier Williams came to this club and noted that Newfoundland came into Confederation with a government surplus and now faces major deficits, with the clear implication that the relationship with Canada was the problem.

Conveniently, he did not mention that when Newfoundland entered Confederation it was under the supervision of the British Government due to disarray in its finances and that the only reason it had surpluses is because Canada, then a foreign country, and the U.S. had spent the war years building large military bases on the Island. The omission of those two facts was simply disingenuous.

For the past five years or more, provincial governments in this province - irrespective of political stripe - have emphasised the supposed poverty, backwardness and generally hard-done-by nature of Newfoundland and Labrador.

Simply put, the stories aren't true, especially when measured by standards across the country. The Government of Newfoundland and Labrador outspends ever provincial government in the country on a per capita basis save one:  Alberta. One of the things that the Premier's $10 billion settlement claim misses is that sort of fact.

Successive provincial governments in this province have looked forward to the day when Newfoundland and Labrador no longer qualified for Equalization.  Even in raising the issue of Equalization offsets with the federal government in 1990, then Premier Clyde Wells told the Sunday Express:

By doing this, and by having equalization cut this way, we are coming closer to looking after our own needs and we are coming closer to recovering some of the dignity and self-respect you lose when you depend on the federal government for 47 percent of the revenue [in the provincial budget].

I can't wait to see the day when we don't get a dollar.

The Auditor General recently noted that the provincial government's dramatic increase in public sector spending is built on the volatile foundation of commodity prices that have risen to almost unprecedented heights in recent years.  By the same token as they have risen, they will drop, likely sooner rather than later.

The need for responsible government fiscal policy has been an enduring theme in the three years of Bond Papers and in this anniversary year of the democratic vote to restore responsible government in Newfoundland and Labrador, the need for a fundamental shift in public thinking about public money could not be more appropriate.

Dignity and self-respect are lost when a provincial government depends on substantive amounts of cash from another government to pay its bills. It is beyond irony - if such a thing is even possible - for a government that talks about self-reliance to have, as the centrepiece of its federal policy,  a demand for further billions in Equalization and Equalization-type transfers at the same time that the long dreamt of day of going off the federal dole is around the corner.

It's worth noting in that context that the current provincial administration began its plea for federal cash, in 2003, with a demand that the federal government transfer a sum equal to annual oil and gas revenues for as long as oil and gas revenues flowed.  Even if the provincial coffers would be stuffed to overflowing, the initial demand was for ever more federal hand-outs like Equalization.

While it ultimately settled for a simple cash payment of $2.0 billion, the government's subsequent drive for $10 billion is little more than an effort to keep the federal dependence alive. The tortured logic of the so-called claw backs was never more plain than in premier Danny Williams' October 2004 interview with CBC television. It is no better with the  demand Stephen Harper honour a promise which Premier Williams himself rejected in 2004 and which was the polar opposite of the policy he himself proposed as provincial government policy in the 2005/06 letters to federal party leaders.

The $10 billion demand and its associated Anybody But Conservative campaign is really little more than a political distraction, though.  That point is surely not lost on anyone not living in Newfoundland and Labrador and it is likely being realized by more and more people within the province.

An objective assessment will confirm that Newfoundland and Labrador is on the verge of a truly remarkable change in its economic status.  That change, however, has been built in largest measure on factors beyond the control of any government in the province.

To ensure that status of being a "have" province endures, well, that depends on factors very much under the control of the people who live in Newfoundland and Labrador.  It requires a shift to responsible government and responsible politics and away from the democratic poverty we've borne for too long.

It remains to be seen if the descendents of the people who voted in the 1948 referenda can fulfill their ancestors' dreams.