Walking a Mile in Someone Else's Shoes

After months listening to Ontario politicians and the national media crying a river about how Ontario has had to stoop to collecting equalization payments I believe I’ve finally figured out what all the fuss is about.

The shame they are now wearing on their sleeve hasn't come to them because Ontario’s economy is on a downswing. It is, but that can happen anywhere.

It’s not even that Ontario doesn’t want to accept handouts from Ottawa, they do it all the time in other ways.

No, the reason for Ontario’s new found state of mental depression is that the province doesn’t like to receive their handouts in such a transparent and public way.

You see doing so makes it very difficult to continue pretending that Ontario is somehow better than the rest of Canada.

How many of us remember the words of Ontario’s interim Tory leader, Bob Runciman, when he told the Globe and Mail, “I think it’s a very sad day in the history of this province that we’re now going on the dole”?

What about references made in the Ontario Legislature to the effect that Ontario is now a “have not” province while, “Newfoundland and Labrador is not. Look how low we’ve sunk”. Clearly a statement intended to use Canada’s favorite whipping boy, Newfoundland and Labrador, as a means to show just how sad it was that Ontario was about to receive equalization payments.

With equalization now a reality for Ontario the province is screaming to change the way the system works or even to scrap it completely. They wonder how the people of Ontario can possibly continue their good work of subsidizing the rest of Canada through their tax dollars if they have to pay themselves out of that pot. It's like someone forgot to tell them that people in other parts of Canada (equalization receiving or not) also pay federal taxes and fund federal transfers.

The fact of the matter is that the $347 million in equalization payments Ontario will receive this year is a drop in the bucket when it comes to that province’s overall budget, yet to read the editorials, comments and news stories you’d think Ottawa transferring those funds to the province was a slap in the face rather than a simple financial exchange.

Equalization is simply one of many federal transfers to the provinces, including Ontario. Transfers that are funded by tax revenue, everybody’s tax revenue both inside and outside the self proclaimed "Center of the Universe".

Billions in Health transfers flow to Ontario each year but it doesn't make politicians there spout off about how hard times have gotten.

Gas tax transfers don’t either, neither does funding for highways or education or infrastructure.

Oddly enough, no fuss is made even after the most blatant handouts Ontario receives on a regular basis. Handouts like the recent multi-billion dollar payoff intended to convince Ontario to harmonize its sales taxes with the fed. Something other provinces received absolutely nothing for doing just a few years back.

Does Ontario hide its head in shame when Billions in infrastructure stimulus is offered to them? Of course they don't, instead every politician at Queens Park lines up for a chance to get in on the requisite photo op that accompanies any such announcement.

What about the billions being poured into Ontario’s auto industry these days? How shameful is that when forestry workers, fishermen and others across Canada are being ignored by Ottawa?

Apparently there is no shame when those sorts of bailouts take place so why the wailing and gnashing of teeth over the so called “dole” or equalization?

Is it truly because of Ontario’s self professed pride in “helping” the rest of Canada or is it really about the desperate need to Lord their “generous” nature over what are perceived to be lesser provinces and peoples, a sort of holier than thou scenario?

I suspect it’s the latter.

Certain small minded individuals tend to make themselves feel good by ridiculing others, we've all seen that sort of thing before, but when you have to walk a mile in someone else's shoes and those shoes are stepping out in a very public way, everything changes.

Some readers may view this commentary as a serious case of Ontario bashing. It isn't intended to be. In fact I see it as something of a long overdue reality check. After all, it surely can't be easy to look down your nose at yourself.

The New "Newfie" Joke

Newfoundland and Labrador premier, Danny Williams, was quoted recently as saying, “The days of the newfie jokes are over”, in reference to his province no longer being a recipient of equalization payments. Not so fast Mr. Williams, it seems you spoke too soon.

For decades the people of Newfoundland and Labrador have been belittled, ridiculed, condescended to and laughed at without regard for feelings or facts. The province has been derided and demeaned like no other in the federation, simply because of circumstances largely beyond its control, that forced them to accept federal equalization payments to offset a weakened economy.

The days of having to accept those funds are over, unfortunately the habit of mocking and putting down the province and its people as “stupid newfies” and worse is something that has not gone away and in fact is getting more rabid every day.

For as long as the equalization program has been around and up until just a few weeks ago, very few Canadians cared much about the system or how it worked. Mind you many of them, especially those in Ontario, knew it existed and knew that Newfoundland and Labrador was a recipient, thus the verbal attacks, but beyond that equalization was something they could have cared less about. This is not the case today.

What happened? Why has equalization suddenly become so important to people standing around the water coolers of Bay Street or in the streets of Toronto?

The answer is simple. Ontario is now a recipient while Newfoundland and Labrador is not.

No longer is Newfoundland and Labrador the one talking about equalization and its potential effects (both for good and for bad). It’s now Ontario that is directly impacted by the issue.

When the people of Newfoundland and Labrador spoke out for decades about the impacts of the federal program, calling for its overhaul and for a more balanced approach to meeting the goals of the program nobody listened. They simply brushed asided any talk from, to quote Globe and Mail columnist Margaret Wente “Canada’s scenic welfare ghetto”.

Now that Ontario is on the receiving end of the calculation suddenly the program has become the single most important issue in Canadian politics and is fast becoming a disaster for the nation.

It seems that with the advent of Ontario’s new “have not” status, which is based solely on a numbers game, not reality, a new means of attacking the people of Newfoundland and Labrador has moved to the forefront.

No longer can Ontarians feel good about themselves by simply complaining about how Newfoundland and Labrador is a “drain on Canada” or how those “lazy newfies always want suckle at Ottawa’s teat”. That form of attack will no longer fly.

Instead they’ve opted for the only avenue left open to them that allows them to collect federal handouts yet still feel good about it, at the expense of Canada’s perennial door mat.

The new way of attacking Newfoundland and Labrador is by comparing it to Ontario and bemoaning any federal equalization formula that is so distasteful it would dare make it appear that Newfoundland and Labrador is no longer the lowest rung on the federation ladder.

In the words of Ontario opposition leader, Bob Runciman, “It’s hard to swallow the concept of being Newfoundland’s poor cousin. We’re used to being the bread winners in Confederation…not welfare recipients or whiners”, no doubt tarring the people of Newfoundland and Labrador as being the latter.

Open any major paper in Ontario or across Canada, whether it be the Globe and Mail, National Post, Toronto Star or a host of others and you’ll find exactly the same sort of rhetoric that has been published ever since 1949. The thing of it is, with Newfoundland and Labrador having cast off the stigma that comes with equalization the disdain has not dissipated but has instead been turned up a notch in an effort to console the poor folks in Canada’s heartland.

In the past few days alone there have been several articles and commentaries that would make the hair stand up on the neck of any Newfoundlander or Labradorian. The verbiage is outright hostile and it's clearly intended to put "those newfies back in their place”.

One article I read recently noted, “…the hare (Ontario) is scratching his head wondering how the tortoise (that would probably be Newfoundland) crossed the finish line ahead of him.”

Other articles ponder the question, “… how is it that Ontario is a “have not” province and Newfoundland and Labrador is a “have”?” It goes on to provide an even more clearly aimed slap to Canada’s newest “have” province by stating, “Just how Ontario -- once as sturdy as your grandfather's house -- got laid so low is best left for speculation.”

Indeed, the days of ridiculing and demeaning the people of Newfoundland and Labrador are far from over. The jokes may taste more bitter on the tongues of the tellers these days, but the need of many Ontarians to keep anti-Newfoundland and Labrador sentiment alive, in a pathetic attempt to inflate their own egos, is alive and well.

There is little doubt that when Danny Williams unveils his plan for a celebration of his province's new found status the anger now showing itself will only intensify.

I can hear it now, “How dare Newfoundland and Labrador celebrate at a time when the very Ontarians who paid their way for so long are suffering so greatly?”

Fortunately for the people of Newfoundland and Labrador, most have lived with the disdain and slurs of “mainlanders” for so long that it’s become little more than a dull hum in the bacground. White noise if you will.

There is no doubt the party will proceed as planned even if Dalton McGuinty himself is forced to stand in a welfare line, hat in hand, to collect a cheque.

By the way, if any of the fine folks of Ontario happen to be in Newfoundland and Labrador this summer let me be the first to invite you to what will surely be an event to remember.

It might do you good to get out of Ontario for a while and forget about your troubles.

As always, you’re more than welcome to join us.

A New Definition for "Have" and "Have Not" Provinces

I’ve been saying it for years, as have others in the Atlantic region, that when it comes to Canada there are not only financial “have” and “have not” provinces but also “have” and “have not” attitudes among the people. The two realities don’t necessarily go hand in hand.

For decades, ever since Newfoundland and Labrador entered confederation in 1949, the province has been ridiculed by many Canadians as the poor cousin or the federal equalization sink hole of Canada and its people have been labelled as lazy whiners who continue to take and take while wanting more from the federal purse.

Even in the past year or so, as the province has reached the cusp of finally becoming a financial “have” province, there are those who still feel the need to label the place as a drain on Canada and are more than happy to ridicule the people living there.

If you ask many Canadians which province benefits the most from federal equalization transfers they will automatically say Newfoundland and Labrador. Never mind that Quebec actually accepts the lion’s share of those federal tax dollars, 8 billion last year compared to just 12 million for Newfoundland and Labrador.

When it comes to EI benefits its may be true that Newfoundland and Labrador has a higher percentage of users than many other provinces but this is due primarily to the rural nature of the place and the seasonal employment that kind of environment brings with it.

High unemployment also stems from the shut down of the 500 year old cod fishery in 1992 after decades of mismanagement by Ottawa. A situation that caused the loss of 10’s of thousands of jobs and still has repercussions on the economy to this day. Some analysts have compared the event (on a per capita basis) to the entire city of Mississauga losing their jobs on the same day.

Percentages are one side of the story but if you look at the actual numbers of individuals collecting EI and the dollars spent on the program in different regions of Canada, Newfoundland and Labrador no longer sits at the top of the heap among the provinces or in the cost to Ottawa.

When it comes to Newfoundland and Labrador most Canadians have no trouble singling out the people of the province as whiners who can’t wait to pick up an EI cheque and who never get enough of suckling on the equalization teat. It seems that no matter what the reality may be nothing has changed when it comes to attitude of Canadians toward their favourite “whipping boy”.

Now that Newfoundland and Labrador’s economy is starting to turn around and the province plans to accept zero equalization next year it is Ontario and Quebec who are the ones complaining to Ottawa that their share of the pie is not big enough.

The economy in both of those provinces is slumping and it seems that Ontario may now require federal equalization assistance to remain afloat. The Ontario finance minister, Dwight Duncan, has already sent a strong message to his federal counterpart that any plan to short change Ontario on equalization assistance will not be acceptable. He has also signalled that changes to the EI program will be demanded to help the people of Ontario.

Meanwhile Quebec, also with an ailing economy, is looking for even more assistance from Ottawa than they now accept as Canada’s largest equalization recipient.

As both provinces are looking to Ottawa to assist them, which they have every right to do, why is it that nobody has seen fit to write letters to news editors or jam open line programs calling the people of either province a bunch of lazy whiners or saying they are looking for handouts rather than taking care of themselves. Not that I'm saying they should, my question is simply why it isn't happening.

Nobody has done that yet there are those who are still saying it about Newfoundland and Labrador every time the people of the province (or its premier) have anything to say on federal /provincial issues.

Yes indeed, there is definitely a hierarchy to the pecking order of provinces in Canada and a sort of “have” and “have not” status when it comes to the attitude of many regarding the larger and smaller provinces.

If this weren’t the case would the people of Ontario or Quebec, even in these tough economic times, feel as justified as they do in demanding more federal support while their unemployment rates sit at between 6.4% and 7.1%, yet still view Newfoundland and Labrador as a drain on federal coffers even as the province happily moves away from accepting any federal equalization but still suffers from the worst unemployment rate in Canada at more than 13%?

It seems now more than ever that perception is reality. With this in mind maybe we should all forget the financial side of the equation and look instead at public attitudes in creating a new definition of "have" or "have not".

A Sad Commentary on Canadian Politics

By the end of the week federal election campaigns will be moving into high gear thanks to Stephen Harper's decision to go to the people in mid October. Never mind that the Conservative government has already been running American style attack ads for weeks. I guess that's just "reaching out to the electorate", isn't it?

In fact it's the sort of approach Newfoundland and Labrador Conservative MP, Fabian Manning, has taken to like a duck to water.

It seems good old Fabian has been taking full advantage of taxpayer funded programs that allow him to send out regular mail updates to his constituents. The problem is that little Fabian hasn't been filling the pages of his newsletters by updating the public on all of his good work in Otawa, likely because he has nothing to talk about on that front. Instead he's been using the paper, ink and postage you and I pay for as a political tool to bash the other parties and promote big daddy Steve. Tsk, Tsk Fabian. That's not really nice is it?

When it comes to the Conservative party in general and Fabian in particular, it's just the sort of underhanded (even if technically legal) move that should come as no surprise to anyone. Fabian clearly sold out his principles a long time ago. As a matter of fact I believe I know exactly when it happened. It was in May of last year.

That was the day Fabian, who was sent to Ottawa to represent the people of Avalon and the Province of Newfoundland and Labrador, gave up his last shred of morality and human decency in order to curry favor with his Conservative boss by mocking his home province and his people on National television.

I wonder just how many of you out there remember the scene as Stephen Harper stood in the House of Commons to ridicule and mock Newfoundland and Labrador over the equalization debate. How many remember as well how Fabian, inexpicably sitting in Cabinet Minister Jim Flaherty's seat at the PM's right hand, smiled broadly, applauded on cue and cheered on his boss as the venom spewed from Harper's lips.

I remember.

Not to worry Fabian, more influential and well seasoned political figures than you have sold out in the past.

Let's take Loyola Hearn for example, now there's one who really knows how to spin a story while sticking the knife in and giving it a good twist.

When running in the last federal election in January of 2006, Hearn clearly stated, "Our party initiated the idea of custodial management. We had a resolution to that effect passed in Parliament. In our policy statements we commit to taking custodial management if we become government."

Fast forward a couple of years and it's a completely different story from Mr. Hearn.

These days custodial management is a dirty word in the Hearn vocabulary and one he avoids at all costs. Instead Mr. Hearn is telling everyone that his policy of having foreign patrol vessels off our shores keeping an eye out for their own countrymen is actually working so well we don't need to protect our own fish stocks. His reasoning is that arrests for infractions are way down so it must be working. Really Loyola?

It's a sad commentary on Canadian politics when a voter's main options include a party that has, and continues to, lie about issues of such importance to voters (Blue), another party that has done their own share of lying in the past and plans to introduce new taxes that will shift wealth into Ontario & Quebec from resource producing provinces (Red), a third that is a perennial afterthought (Orange) and one that has yet to prove itself anything more than a single issue party (Green).

It's also a sad commentary on the state of political activism in Newfoundland and Labrador that even when faced with such sad prospects we have yet to find it within ourselves to abandon the status quo of voting for a party with national interests (and control) and instead throw our support behind local candidates that are willing to place Newfoundland and Labrador's interests first.

For several years now the Newfoundland and Labrador First party has struggled to find the kind of support it needs to make inroads on the federal scene. This is a party that, working on a shoestring budget, is trying to make sure that Newfoundland and Labrador's concerns are not drowned out by the noise of a national party structure controlled by the large number of representatives from Ontario & Quebec.

Over the past few years the Newfoundland and Labrador First Party has grown far beyond its original platforms and is now poised to run candidates in the upcoming election. The belief is that while the province's 7 federal seats are of little value when occupied by members of a national party, if locally controlled they could be.

With so many minority governments expected in the coming years a locally managed party that can elect a handful of representatives to fill those seats could actually weild a lot of power and influence on Parliament Hill. The possiblity actually exists, especially in a close minority, that such a party could potentially hold the balance of power in Ottawa. Something Newfoundland and Labrador representatives could never hope to accomplish otherwise.

The question now is whether the people of Newfoundland and Labrador are about to prove the old adage that "insanity is doing the same thing over and over and expecting a different result", or if they are willing to take the William's campaign of "Anyone But Conservative" a step further and throw their support behind local candidates that are answerable to Newfoundlanders and Labradorians only, not to a National party.

The Truth is...

With the news that Newfoundland and Labrador will soon be moving away from equalization while Ontario will be moving toward a “have not” position, much has been said by government and the media alike on the subject.

Over the past week it seems, to this observer, as if the objective has not been to clearly discuss Ontario’s woes or even to congratulate Newfoundland and Labrador for its success. The objective of some seems instead to be an offensive against Newfoundland and Labrador by turning what should have been a good news story into some sort of blight.

During this time Newfoundland and Labrador has been called the “poor cousin” of Confederation. It’s been pounded home time and time again how Newfoundland and Labrador has “never been off of equalization since it joined Canada”. It’s been called a place that, “wants to have its cake and eat it too”. It’s been said that “Newfoundland and Labrador is the place to go if you want to see your (Ontario) tax dollars at work” and Newfoundland and Labrador’s Premier was even asked by one political reporter if he was willing to give up some oil wealth to help Ontario out of its troubles.

None of this was done with tongue firmly planted in cheek. In fact, for the most part, the tone was far darker than anything publicly said about Newfoundland and Labrador in recent memory.

Unfortunately, through it all, the true story of Newfoundland and Labrador’s existence and its first tentative steps toward so called “Have” status were, not even once, put before the people of Canada in an honest way.

The truth is: At the time Newfoundland and Labrador entered Canada in 1949 its total debt was about $100 million dollars. After 59 years of Confederation that debt mushroomed to over $11 billion dollars, the highest per capita debt in Canada. This is what happens when, as my dear Mother says, “you have to borrow money to pay the light bills and put food on the table”.

The truth is: For centuries the historic ocean trade routes between North America and Europe saw thousands of ships travel the eastern seaboard and fill the harbours of Newfoundland and Labrador, as well as the Maritime provinces. That isn’t the case any more. In an effort to centralize industry and grow the mega economies of Ontario & Quebec the Federal Government used the tax dollars of all Canadians, including those in Atlantic Canada, to construct the St. Lawrence Seaway, essentially killing commercial traffic flow into Atlantic ports.

The truth is: When Newfoundland and Labrador entered Canada it boasted the world’s most prolific fishing resource off its shores. It was a fishery envied around the world. Upon entering Confederation this fishery fell under the control and management of Ottawa. By 1992 this fishery had been mismanaged into collapse and overnight more than 40,000 people lost their livelihoods. The impact to Newfoundland and Labrador’s small population was the equivalent to Ontario losing one million jobs in the blink of an eye.

The truth is: In the 1960’s Newfoundland and Labrador began development of the Upper Churchill Hydro Electric project. At the time it was the biggest project of its kind in North America. The Province of Quebec refused to let Newfoundland and Labrador wheel electricity across its borders at market rates and although the federal government had the authority to force the issue it did not. As a result Quebec now makes billions directly from the Newfoundland and Labrador resource and billions more through the industries it attracted. The owners of that power, Newfoundland and Labrador, can barely afford to keep the turbines spinning. This situation will continue to exist for another 33 years.

The truth is: Even though most of the oil and gas discovered off its shores would never have fallen inside Canadian jurisdiction had Newfoundland and Labrador not entered into Confederation in 1949, the federal government never the less has control of those resources, not the province. The way the federal government views the subject, in Canada oil on land belongs to the province, oil under the water belongs to Ottawa.

The truth is: When Newfoundland and Labrador petitioned the federal government for the right to force oil companies to develop major finds, rather than sitting on them as a “nest egg”, Ottawa refused to stand up for Newfoundland and Labrador. This is why today if a company in Alberta does not develop a discovery within 5 years they lose control of it to the Province. In Newfoundland and Labrador an oil company can sit on a discovery forever, never produce a drop, and prevent anyone else from accessing that find.

The truth is: Although the original 1985 Atlantic Accord supposedly ensured that Newfoundland and Labrador would receive the full benefits of oil resources, it wasn’t until an update to the contract in 2005 that the spirit of the deal was actually fulfilled and a fairer sharing of revenues was delivered.

The truth is: After disputing the value of the 1985 Accord for 20 years and after fiercely battling the Federal Liberal Government for months Newfoundland and Labrador finally got the changes it wanted with the signing of the 2005 update to the Atlantic Accord contract. A little more than a year later the Federal Conservative Government, without consulting the Government of Newfoundland and Labrador, unilaterally changed that contract denying Newfoundland and Labrador, according to independent economic estimates, of $10 billion dollars in potential revenue.

The truth is: The list of ways Newfoundland and Labrador has been impeded in improving its economic situation is a lengthy one, with many other examples similar to those identified here.

The truth is: In spite of those roadblocks Newfoundland and Labrador is finally beginning to see some small signs of progress. That progress is not due to the benevolence of the Canadian government. It is because the people who have clung to Newfoundland and Labrador’s rocky coastline for centuries simply refused to give up in the face of adversity.

The truth is: Today Quebec continues to make billions from the Upper Churchill power plant in Labrador. Ottawa still refuses to force oil companies to stop sitting on massive reserves. 16 years after the cod fishery collapsed the fish stocks still have not recovered, yet Ottawa continues to turn a blind eye to foreign fishing fleets raping the spawning grounds off Newfoundland and Labrador.

But…

The Truth is: In spite of it all, Newfoundland and Labrador is paying down its debt, to the tune of nearly 1.5 billion over the past couple of years.

Newfoundland and Labrador has finally recorded multi-year surpluses in its provincial budgets.

Newfoundland and Labrador has reached a point where it requires only $18 million dollars in federal equalization payments this year and will move off equalization completely next year.

The truth is: While the unemployment rate in Newfoundland and Labrador is still more than double the national average it is at least moving in the right direction and is currently at a 25 year low.

That’s the truth.

Now imagine for a moment what Newfoundland and Labrador might have accomplished if it had been given half a chance.

Equalization - A Made in Ontario Solution

As odd as it may seem, the solution to Ontario's fiscal and public image problems rests in doing what Ottawa, at the request of Ontario itself, refused to do more than a year ago.

Remove all non-renewable resource revenues (100% of them) from the equalization calculation.

Today the entire nation, or at least politicians and the media, are in a tizzy over the pending fate of Ontario. It's been that way ever since a report last week indicated that Ontario will qualify for equalization support in a year or two.

The news media (in what has to be the oddest twist of all) now appears to be blaming Newfoundland & Labrador for Ontario's woes.

It seems someone got the bright idea that since Ontario is heading toward "Have Not" status while Newfoundland and Labrador is moving away from it, the entire problem must be the fault of the folks down east.

Clearly Newfoundland and Labrador has nothing to do with the current situation in Ontario. The truth may actually be just the opposite. The province proposed a solution to Ontario's problem over a year ago but nobody listened then and nobody is listening today.

Ontario Premier,Dalton McGuinty, is blaming Ottawa for this insulting situation because the taxpayers of Ontario (like taxpayers across Canada) send huge sums of money to Ottawa. His complaint is that Ontario gets only a small percentage of those federal revenues back.

That's not news and it isn't Ottawa's fault, nor anyone elses.

Of course all of that money doesn't go back to Ontario. If every penny collected in federal taxes went back to the same regions it came from there would be no need for federal taxes (or for a federal government for that matter).

Welcome to the world of federalism Dalton!!!

A Higher Population + More Higher paying jobs + More Industry = Less Federal Support.

It's just that easy.

It seems Mr. McGuinty believes Ontario should be able to get more of that tax money back (which is what equalization payments would permit him to do) but he doesn't want it to be called Equalization.

That would be an embarrassment.

This leads us to the root of the Ontario problem.

The Federal and Ontario governments, in partnership, have essentially painted Ontario into a corner and they have nobody to blame for it but themselves.

One of the major sticking points Ontario had with federal provincial relations was Ottawa's penchent for entering into "one of" funding arrangements with individual provinces. As a result Stephen Harper pledged to never again enter into a side deal. Instead he said Ottawa will only implement funding transfers that are applied fairly across the entire Country.

Under those circumstances finding a way to provide special funding to Ontario without cutting a side deal or using the equalization system isn't easy. In fact it may prove to be a political hot potato for Stephen Harper should he try.

Another big problem for Ontario is the equalization system itself.

When Stephen Harper's government changed the formula there were two key "enhancements" included in the legislation. Those enhancements were at least partly facilited (or should I say "forced") by representatives of the Ontario government and Ontario MPs.

First the calculation was modified so all 10 provinces would be included in determining the average that defines who receives equalization and who doesn't. In simple terms, those below the average receive equalization, those above it do not.

The second change was the inclusion of 50% of non-renewable resource revenues in calculating the average.

Newfoundland and Labrador fought long and hard for the Conservative government to exclude 100% of those revenues from the calculation (Stephen Harper promised he would do it on multiple occassions) because including them would skew the average. By including revenues that are "temporary" in nature, resource dependent provinces are handicapped in their ability to use this one time money to build and diversify their economy.

Once the oil is gone it's gone. It's like selling your car. The money generated is one time only, not like a regular salary. As such it shouldn't be treated, or taxed, as if it were.

Ontario was dead set against the idea and thanks to the pressure it applied on the federal government Harper's promise was never kept. The 100% exclusion never happened.

Fast forward to 2008.

The government (and likely the people) of Ontario do not want to carry the stigma and public shame of having to accept equalization payments from taxpayers across Canada.

Ottawa and Ontario cannot cut a "one of" deal, allowing Ontario to skirt equalization, without both parties admitting that they were wrong for fighting such deals in other provinces. This would result in Ottawa opening a door they said was closed forever.

So, perhaps the best solution doesn't rest in finding a way to pump more taxpayer money into Ontario so much as ensuring that Ontario doesn't cross that dreaded line into "Have Not" status.

After all, isn't this really a question of perception more so than reality?

According to Dalton McGuinty himself it doesn't even make sense that Ontario is about to receive equalization when so much revenue is generated in his province. I agree. That's why the simplest solution is the best.

The reason Ontario is teetering on the brink of crossing the "Have Not" line is because the new 10 province standard (which includes oil revenues) has allowed Alberta to raise the bar so high Ontario is in jeopardy of falling under it.

If non-renwable resource revenues were removed from the calculation Alberta would have little effect on the overall numbers.

Ontario would once again resume, what it sees, as it's rightful place at the top of the Canadian heap.

It's a win, win, win situation.

- Ontario regains its status and avoids a painful loss of dignity.

- Newfoundland and Labrador keeps its limited oil revenues, enabling it to pay down debt and diversify its economy, in preparation for a future without oil.

- Stephen Harper can finally make good on a promise that, as an economist, he knows to be correct. A promise that has caused a political rift between two governments and, inadvertantly though it may be, is now causing collateral damage to another.

Ontario's Equalization Non-Disaster

How is it even possible that the good news story of Newfoundland & Labrador coming off equalization has somehow turned into catalyst for concern and near hysteria in some circles?

After 59 years of being a so called "have not" province one would think the news this week that Newfoundland & Labrador will no longer need equalization payments would be a good thing but in reading the headlines one gets the opposite impression.

Unfortunately Newfoundland & Labrador's announcement took place at the same time that financial analysts are saying Ontario could soon become an equalization receiving province. As with most things Canadian, when Ontario sneezes everybody listens and all else is quickly forgotten in the rush to find a tissue.

As a result, instead of cudos being offered, everyone from politicians to the media have gone on the offensive to protect poor little Ontario from those cruel people down East. CTV political reporter, Mike Duffy" even went so far this week as to accuse Premier Danny Williams of being "uppity" because he had the gall to say that he was glad his province was finally able to stop collecting federal support, and in doing so, allowing the system to better help those who needed support.

"Uppity" now there's a word you don't hear very often regarding Newfoundlanders & Labradorians. In fact the last time I recall hearing the word it was used in reference to individuals from a certain segment of the North American population that had been repressed for generations and had finally found a voice. I believe the exact term was, "That's one uppity...".

I won't finish the quote but believe me when I say that the "N" word used in that context wasn't Newfoundlander, though the sentiment was reminiscient.

Thanks to a perfect storm of high oil prices, a soaring Canadian dollar and a booming economy out west and in Newfoundland & Labrador Ontario is no longer at the top of the heap financially. Add to this the coincidental events of Newfoundland and Labrador moving off of equalization while Ontario moves in to replace it and the perfect scapegoat has been created for all that pent up Central Canadian anger. Who better than Canada's favorite whipping boy, er... Province, to take the heat.

According to reports, Ontario MPs are fuming over the situation and one columnist in an Ontario paper was quick to note that, "Newfoundland was always the place we pointed to as somewhere to go if we wanted to see our tax dollars at work".

Through all the noise the prize for twisting reality and spewing venom has to go to none other than the Premier of Ontario himself, Dalton McGuinty.

The Ontario Premier is telling anyone who'll listen, and apparently there are quite a few, that the reason Ontario is in such hard shape is because his province sends $20 billion more to Ottawa than it gets back in services. Money that is being used to support the rest of Canada.

Putting aside the simple geographical fact that Ottawa itself is a part of Ontario, McGuinty is still full of it.

To listen to the guy you'd think Ontario was on the brink of collapse. That bread lines were forming on every street corner and food was being flown in by Oxfam.

Calm down Dalton, things aren't all that bad.

In truth, the reason Ontario may become an equalization recieving province is because the new 10 province standard(adopted in consultation with the Ontario Premier)has raised the provincial average, pushing Ontario closer to the center line of "Have" and "Have Not".

In addition, though McGuinty would love to have people believe the opposite, in reality Ontario doesn't send $20 billion to Ottawa to fund social programs or equalization across the Country.

Federal revenues used for these programs come from the pockets of all taxpayers across the Country. It doesn't matter if you live in BC, Alberta, Ontario or in Newfoundland & Labrador, everyone pays the same federal tax rates. In other words, someone making 50K in Medicine Hat pays the same taxes as someone making 50K in Twillingate. It's these taxes that pay for equalization, not the Province of Ontario or any other Province for that matter.

The reason for the $20 billion discrepancy is simply that Ontario has more people paying federal taxes and a larger percentage of high paying jobs than many other places. That's not exactly the profile of a Province on the brink of collapse.

As one columnist for the Halifax Chronicle Herald recently put it, "...hold the cat food orders, Toronto.

...Mr. McGuinty says Ontarians pay too much to Ottawa. But we all pay the same federal tax rates, so Ontarians can only pay less if Ottawa returns more money through transfers.

Mr. McGuinty is really saying: Give me more transfers, but don’t call them equalization – that’s for have-nots."

Loyola Hearn & John Crosbie - A World Apart Politically

Recently former federal fisheries minister, John Crosbie, has, believe it or not, been the voice of reason in the equalization battle between Ottawa and Newfoundland and Labrador. He has asked both parties in the dispute to find a way past the current impasse and resolve the issue. Not bad advice and if anyone is questioning Mr. Crosbie’s motives, an article written by him in this weekend’s Independent should put those questions to rest.

In case you missed it, it’s a great article. Here are a few excerpts:

“Is the future of NL one of prosperity and self-reliance achievable within Canada today or not? Can the present pattern of confrontational federalism be changed and improved upon? Is the Government of Canada going to continue to be the beneficiary of 75-80 cents on every dollar of government royalties and taxation revenues generated by existing oil projects in NL or not?”

“How can we expect to build a long term sustainable and growing economy as predicted by both levels of government during the long negotiations over the Atlantic Accord when the “principal beneficiary” of its only foreseeable non-sustainable natural resource revenue is Canada?”

“We were told that after we became a “have” province, the sharing of benefits with other Canadians was to start. But that sharing of benefits started long before NL became a “have” province because of the unfair application of the equalization program, which has prevented the achievement of the objectives and purpose of the accord.”

“…the economic and fiscal disparities among the 10 provinces and three territories are an ever increasing threat to our political, social and economic survival as a nation. We are all citizens of the same nation. How can our country permit provinces such as NL and Nova Scotia not to receive the benefits from their own depleting resources while most other provinces were given the right to their natural resources by Canada and so prosper as they receive and enjoy the benefits...”

“…With the apparent change to the commitments made by Stephen Harper… the stage is set for the next battle to erupt over the Atlantic Accord. It is 10 years since first oil was produced at Hibernia. How many more decades must pass before a lasting settlement is reached to this bitter and disruptive national unity issue?”

Well said John. I’d also add that the province has a limited number of decades left before the oil is gone. This is why the people of NL are so determined to find a solution to the problem sooner rather than later.

The article by John Crosbie is an informative, interesting one that’s well worth the read if you get the chance.

Also interesting, but quite sad, is the clear difference in attitude between Canada’s former fisheries minister, John Crosbie, and its current one, Loyola Hearn.

While Mr. Crosbie is standing firmly behind his province, in another article in the same edition of the Indy, Loyola Hearn responds to calls for the province to vote against the Conservative’s in the next federal election by saying, “It’s extremely important for our province to be represented around the cabinet table in Ottawa. If not, who’s going to look after us?”

Interesting point Loyola. I mean where would we be on Custodial Management and the Atlantic Accord if you weren't at the cabinet table?

Here’s a news flash for you Loyola, Newfoundland and Labrador can look after itself without keeping you gainfully (or otherwise) employed. We don’t need you or anyone else in Ottawa to “look after us”. All we need, and are fighting for, is to have the federal government treat us fairly and to stop tying our hands behind our backs at every turn.

Harper's Big Election Gamble

With Wednesday’s announcement of a compromise deal over the Atlantic Accord, Stephen Harper sent another clear signal he plans to force an election in the coming weeks. The question is whether the gamble to shore up support in Atlantic Canada will actually help him or cost him in the long run.

Although the deal will provide additional funds to the province, the amount will be far less than Nova Scotia had been fighting for. The move could, and likely will, be seen as an attempt by Harper to buy off the province before an election and to shore up a weak Conservative governemnt in that province.

Some analysts believe Harper wants to continue to govern but based on recent events it’s far more likely that, even with less than perfect polling numbers, the PM sees the time as ripe to make his move and force an election.

All sorts of scenarios are being tossed around by strategists and party insiders. Anything and everything that could possibly help or hinder the party’s election chances are being examined. Correction, almost everything. Clearly something has been overlooked in Harper's quest for glory.

What has not been considered is a factor outside the control of Stephen Harper and his party. An intangible that has the potential to do some serious damage to the Conservatives in light of recent events, and one that has once again moved to the forefront with Wednesday’s announcement.

That uncontrollable and indefinable factor is none other than the outspoken Premier of Newfoundland and Labrador, Danny Williams.

It may sound a little odd that the Premier of one of Canada’s smallest and poorest provinces, one with only 7 federal seats, might somehow be able to throw a monkey wrench into the PM’s chances for re-election, but odd or not, the possibility exists and Stephen Harper is not giving that possiblity the attention it deserves. It's an oversight that could prove far more expensive than he knows.

Williams has already verbally attacked the PM over back peddling on equalization promises and for making unilateral changes to the bi-lateral Atlantic Accord agreement. At the time of those changes Williams complaints were easily brushed aside as those of a premier with limited political experience but my how times have changed.

Today the Premier is viewed in many parts of Canada as a bit of a giant killer, a leader who isn’t afraid to fight with anyone standing in the way of his province’s future. Simply put, he's a street fighter that Stephen Harper has just poked with a very big stick.

Williams has already told the people of Canada that the PM can’t be trusted to keep his word. He warned them that by breaking a written promise to Newfoundland and Labrador Harper proved he was not above doing the same thing to them. Now, with the Nova Scotia agreement in place, Harper has done just that.

The PM would have been better off if he had simply done an about face, for whatever "technical" reason, and honored the Atlantic Accord. At least then he could have claimed he was bound by a contract signed by the preceding Liberal government and that his hands were tied. Instead he has opted to do something he told the Country he would never do.

Whether you support the fight over equalization or not, yesterday’s agreement, with Nova Scotia, is clearly a new side deal for that province. When Harper brought down the equalization formula in March, the one that got him into this mess in the first place, he told the Canadian people there would be, “No more side deals”.

All Williams has to do now is lock and load for an attack that will surely resonate with Canadian voters. On Wednesday Stephen Harper provided the ammunition he needed and he also gained the scrappy Premier an even more emboldened ally in the form of the normally reserved Saskatchewan Premier, Lorne Calvert.

The Premier of Newfoundland and Labrador is often accused of picking fights for the sake of fighting but that’s a misperception that has come back to haunt several of his opponents. In reality he more often picks fights he feels he should, and can, win. Stephen Harper is aligned squarely in his crosshairs and Williams' finger is poised on the trigger.

Since first elected Williams took on former PM Paul Martin over the very same Atlantic Accord contract. He won.

He fought big oil over an improved royalty regime and a provincial equity position. Big oil closed up shop and moved away. A year and a half later they quietly returned and agreed to an enhanced royalty regime and the very equity position he wanted. He won.

Williams, while in his first term, took a hard line by legislating over 40,000 public sector employees back to work, laid off highway staff after shutting down a number of depots, sent the provincial oil industry association into hysterics by walking away from Hebron development talks and completely alienated two federal governments. This week he sought re-election from just over 300,000 voters, most of which were impacted in some way by his previous actions. He won in a landslide vicory with the largest percentage of popular vote in the province’s history.

Williams is now much more widely recognized across Canada than he was even a few short months ago. His exploits have led to a re-evaluation of oil royalties by the Alberta government. He has emboldened provinces like Saskatchewan - which is now tackling the federal government in court and threatening to campaign against Harper- and his fighting persona has even led some in Nova Scotia to jokingly muse about him leading their province as well.

When he walked out on meetings with Paul Martin and he proved he doesn’t pull his punches.

When he waved goodbye to oil companies, as they packed up and left the province over stalled negotiations, he proved he doesn’t pull his punches.

When he went on a media tour and took out full page ads across the Country criticizing Stephen Harper he proved he doesn’t pull his punches.

When he told the electorate in Newfoundland and Labrador to vote “ABC” (Anyone but Conservative) during the next federal election he proved he doesn’t pull his punches.

And when he won his second mandate on the day before Harper's Accord announcement, with a majority that even the first Premier of Newfoundland and Labrador and late father of Confederation, Joey Smallwood, would have been envious of, Williams greeted the crowds by saying,

"There's a message here, Steve. If you want to take me and my team on, you have to take on all the people of Newfoundland and Labrador."

Once again, he proved he doesn’t pull his punches.

Any federal election will naturally center on the issues and personalities directly involved but who really knows what kind of chaos one very determined premier can create when he puts his mind to it.

It’s one thing to force an election when you’re sporting minority level numbers but are in control of the agenda. It’s a completely different game when you're faced with an unknown and volotile variable like the Premier of Newfoundland and Labrador.

Unfortunately for the PM he has no control over which issues the public ultimately decide to latch onto, especially when a wild card like Williams is waiting in the wings stockpiling his ammunition and patiently preparing to fire.

I don’t know about Stephen Harper, but if I were planning to go to the polls any time soon I’d sure as hell be looking for some way to neutralize the Williams factor first.

Editor's Note: As an aside, Both Harper and MacDonald claim this deal was in the works for months (and not just a quickly engineered election ploy) there may be some evidence to the contrary.

The announcement of this deal (also offered to Newfoundland and Labrador) was made on October 10th, but as late as October 5th someone at the department of finance in Ottawa was spending a little time investigating the numbers involved. Check out the following link to another article on my site a few days ago:

http://freenewfoundlandlabrador.blogspot.com/2007/10/atlantic-accord-revisited.html

Atlantic Accord Revisited

Hi all,

I know that just today I told everyone I wouldn't be posting anything new until after the provincial election, but I just found something in my own web site statistics that is too curious to overlook. It may mean nothing but then again...

You see I sometimes check my site's statistics to see how many visitors have come by, what part of the Country they hail from and so on. Don't worry, the statistics don't tell me who you are, just a few general facts that are somtimes interesting, especially today.

With Stephen Harper posturing for a federal election rumors surfaced last week in Nova Scotia that Bill Casey, the Conservative castaway who had the cubes to stand up to the PM over the Atlantic Accord, might run for the party again, if they are willing to make amends over the issue.
Of course we all know the Harper government has about as much support in Atlantic Canada as a spanish trawler on the Grand Banks, so with an election looking more and more likely the question is if the Conservatives taking another look at the Atlantic Accord debacle in the hopes of regaining some ground.

Maybe they are.

Today in my statistics I found two very interesting entries.

The first was the recording of a visitor who came to us via the parliamentary server and stayed on for nearly 3 hours. This isn't that odd since Big Brother usually stops by for a visit, but the length of the visit was a little out of the ordinary.

What was a even stranger was the following entry.



As you can see, some industrious little beaver at the Federal Finance Department also paid Web Talk a visit and interestingly they stumbled on the site while searching Google for: Cost Wade Locke Equalization Cap.

Go ahead and perform that search for yourself and see what you get. Essentially, for the most part, it's a bunch of material on economist Wade Locke's assessment of the damage done thanks to Ottawa's callous actions on the Atlantic Accord.

It would seem that months after side stepping its obligations on the Atlantic Accord and dismissing the concerns of the provinces involved, with an election looming, someone at the Department of Finance is, for whatever reason, clearly interested in the situation and the numbers.

It may mean nothing but it certainly falls into the category of -

Things that make you go Hmmmmm......

MacKay - Ousted MP Bill Casey May Rejoin Conservative Caucus

The following is from the Halifax Chronicle Herald today. Oh the interesting times we live in!

OTTAWA — Bill Casey may run again for the Conservatives in Cumberland-Colchester-Musquodoboit Valley, Peter MacKay said Monday.

"I don’t think that decision has been made yet," said the Central Nova MP and defence minister.

"But the riding association will obviously have something to say about that."

Mr. Casey was ejected from the Conservative caucus in June when he voted against budget-enabling legislation that, he says, violates the Atlantic accord that shielded Nova Scotia’s offshore revenue from a federal equalization clawback.

Mr. Casey is sitting as an Independent but he is already the nominated Conservative candidate in the riding, and he has the support of the Tory riding association.

"Our entire association stands right behind Bill," Scott Armstrong, the riding association president, said Monday. "We want to see a resolution of the Atlantic accord so that he can get back into caucus."

Mr. Armstrong is a longtime supporter of Mr. Casey and a key Tory organizer at both the federal and provincial levels.

He said the community is behind Mr. Casey and, as a good Tory, he hopes he never has to choose between campaigning for Mr. Casey or a different Conservative.

It would be unusual for the prime minister to accept a dissident like Mr. Casey back into the fold, and Mr. Armstrong acknowledged that it may not happen.

"That’s what we’d like to see as a local organization," he said. "But that decision will lie with the prime minister."

Don Plett, president of the federal Conservative party, was in Nova Scotia for meetings last week but Mr. Armstrong said there is no pressure from the national party to rush a resolution.

"The election for us, the farther away the better, so we can work through this and hopefully get back in before the writ’s dropped," he said.

For his part, Mr. Casey said he’s not sure if he would re-enter the Tory caucus, although he’d think about it if the federal government reverses itself and honours the Atlantic accord.

"Well, they booted me out, so I don’t know," he said Monday. "And I can’t go back unless they reverse it."

Mr. Casey issued a tongue-in-cheek news release on Monday after the Bloc Quebecois and the Liberals each released lists of conditions for their support of the Tory throne speech next month.

"As an Independent Progressive Conservative MP from Nova Scotia, I have only one condition for me to vote in favour of the throne speech," the release said. "Reverse the seven pages of amendments to the Atlantic accord agreements which were imposed on Nova Scotia and Newfoundland without their consent or agreement in the 2007 budget."

The federal Tories say they haven’t violated the Atlantic accord, as the province has the choice of sticking with the accord and an older, less generous equalization scheme, or opting into a richer system that includes an offshore revenue clawback that the accord was designed to remove.

Williams Extends Olive Branch to Harper

The Question of who is the bigger person in the ongoing equalization battle, between Ottawa and Newfoundland and Labrador, has finally been answered. Here's a hint. He doesn't live on Sussex Drive.

With the tabling of the March budget the Conservative government saw three provincial premiers accuse the PM of walking away from his election promises on equalization and doing an end run around signed Atlantic Accord agreements.

The budget sparked off a war of words between the leaders and none were louder than Newfoundland and Labrador Premier, Danny Williams. Even today there appears to be very little communication between St. John’s and Ottawa, at least at the highest levels.

There are those who believe Harper did the right thing for Canada and that Premiers Williams, MacDonald and Calvert are looking for too much. Others, mainly in the provinces affected, honestly believe the Prime Minister turned his back on them for purely political reasons by favoring the wishes of vote rich Ontario and Quebec and circumvented a legally binding contract.

No matter which side of the debate they support many observers have been wondering if or when someone will make the first move to re-open the lines of communication and find a way forward on an issue that has divided a Country. They have been wondering which one of these political leaders is the bigger man and which one will finally extend an olive branch.

With summer vacations in full swing some of you may have missed it but over the past several days that question has been answered on more than one occasion.

Recently Premier Danny Williams has not only extended an olive branch to Stephen Harper he’s essentially extended the entire tree. The problem now is that the Prime Minister doesn’t seem willing to accept these offerings. Instead his strategy for resolving the problem amounts to simply ignoring the people of Atlantic Canada and Saskatchewan.

The first move by Premier Williams came on the morning of the big Hebron oil project announcement in the province. Even after Stephen Harper had slighted the provincial leader by sneaking into and then out of the province, in the wake of major floods in the area a few weeks earlier, Williams decided to do something the Prime Minister refused to do. He made a courtesy call to the PM’s office.

Prior to making a public announcement of the multi-billion dollar oil deal Williams phoned the Prime Ministers office as a courtesy. According to the Premier, his intent was to inform the PM of what was about to take place. A reasonable thing to do considering that the project has the potential to pump billions of dollars directly into federal coffers and since Ottawa and the province both manage the resource jointly.

Harper did not take the Premier’s call. Instead one of his staff informed Williams that the PM was busy and would try to call him back. To date, no reports of any direct communication between the two have surfaced.

The second peace offering took place later the same day during an interview on CTV News.

When asked about the ongoing feud Williams indicated that he was standing by his position on the issue but that he could not understand why the PM has never offered to sit down and talk about what options might exist to satisfy both sides in the disagreement.

Clearly this was an attempt by Williams to open up communications and perhaps find some sort of resolution. Just a few months ago this was not something Williams was willing to consider and at that time Harper simply denied any wrong doing and even challenged the provinces to take him to court if they wanted. Now that things have quieted down Williams appears willing to talk even if Harper isn't.

Once again, no movement has been reported from the PMO’s office.

A third, and perhaps most telling sign that Williams is willing to discuss the impasse, happened during the recent Liberal caucus meetings in the province.

On arriving in St. John's Liberal leader Stephane Dion made a point of visiting the Premier’s office and spending some time meeting with him. The Liberal leader clearly intended to use the visit as a photo op in an attempt to brand himself as a supporter of Atlantic Canada’s interests and an alternative to Harper’s apparently anti-Atlantic mindset. Unfortunately for Mr. Dion, Premier Williams refused to go before the cameras with him or even discuss the visit publicly. He essentially left Mr. Dion to his own devices and in doing so left the door open to Stephen Harper.

It's clear that Williams is, after many months, willing to work with Ottawa to fix a situation that has divided the Country and impacted Atlantic Canada’s financial future.

These recent gestures by Williams are obviously intended to let the Prime Minister know that there is still time to find a solution before the next federal election. Still time before the voters in Atlantic Canada go to the polls with the slogan, “ABC – Anyone but Conservatives” ringing in their ears. And, perhaps more importantly for Stephen Harper, still time to win back some limited level of support in the region. Something he may very well need to secure a majority win.

It seems that instead of reaching out to accept these peace offerings Harper has chosen to do something he often does when faced with someone who refuses to follow his commands or challenges him on an issue. He has gone into hiding, is refusing to talk and is taking an adversarial and potentially aggressive stand against his perceived enemy.

This is the sort of tactic often employed by an angry, frustrated and spoiled five year old but it isn't one that should ever be used by a sitting Prime Minister.