Senate Abolition VS. Senate Reform

This week NDP Leader Jack Layton publicly called for a referendum on abolishing the Canadian Senate. Not surprisingly it’s a move that seems to be getting some support from inside the Conservative government.

Calling the upper chamber "outdated and obsolete”, with “…no place in a modern democracy in the 21st century," Layton put out the call for a referendum on the issue.

Layton’s words have some glimmer of truth in them but fixing the problem by throwing the baby out with the bath water seems a bit extreme to say the least.

For years Canadians have come to accept the fact that the Senate is little more than a vestige of a bygone era. A rubber stamp factory for federal legislation and essentially a golden retirement plan for former MPs and party faithful. But is that any reason to abolish it?

Shouldn’t the question revolve around reforming the chamber and making it work rather than doing away with it completely? It’s not like everything in Ottawa would suddenly function better and the sun would rise earlier in the morning if the Senate didn’t exist. When it comes to government dysfunction there’s more than enough blame to go around.

When Harper was elected a couple of years ago a major plank in his platform was Senate reform, not senate destruction. Many people have called for a triple E senate for years (elected, equal and effective). That’s a far cry from abolition. If full senate reform was put in place not only would the problem of a useless Senate go away but the government itself would more effectively meet the needs of all Canadians, not just those in the Ottawa/Quebec corridor.

From the perspective of smaller provinces like Newfoundland and Labrador a triple E senate might solve some of the problems inherent in finding any kind of a voice in Ottawa. Doing away with it would only serve to further strengthen the position of larger provinces by silencing the smaller ones completely.

Elected: An elected Senate (with set terms) means senators would need to go back to the people of their province or territory for a renewed mandate on a regular basis.

This would ensure that they do their job while in Ottawa (reviewing and providing sober second thought to legislation) rather than simply showing up in the chamber when it suits them, as many do now.

Anyone who has seen the kind of flawed legislation coming out of Ottawa on a regular basis lately would be hard pressed to disagree with the need for sober or any other kind of second thought.

Effective: An effective senate means different things to different people, but for me it represents a senate that is non-partisan. A Senate made up of independent members elected by the people of their province or territory without the benefit or liability of party affiliation.

Such a Senate would take party partisanship out of the equation and allow senators to truly represent their constituents, a situation sorely lacking in the House of Commons.

An effective Senate would also be one that is given the power and mandate to amend or even kill legislation if the need is there to do so.

Equal: An equal senate would provide something missing in Canadian politics today, an equal voice for all of the provinces and territories.

A newly designed senate with 5 or 10 representatives from each province or territory, each with a single vote, would ensure that no one region, regardless of population or number of parliament seats, is capable of hijacking the federal agenda for their own benefit.

No doubt there are those who believe this sort of power in the Senate would hamstring legislation and never allow anything to get done. I refuse to buy that argument. A majority of votes in the senate would be achievable as long as the majority of provincial/territorial representatives are in favor of the legislation. This is a far cry from the current system that allows passage of whatever serves to buy the most votes in the larger provinces.

With so few voices in Ottawa, can the smaller regions afford to give up even the largely ineffective ones they have in the Senate today and leave themselves fully at the mercy of MPs from Ontario, Quebec and Alberta?

No matter what the result of a federal referendum, abolition of the Senate requires a constitutional change and the support of the provinces, something that isn’t likely to happen. We’ve all seen how well the provinces agree on even the smallest of matters, but fear not, a referendum, or even talk of one, is not a wasted effort.

There is a silver lining in all of this even if full abolition is unlikely to ever happen.

With a referendum being discussed, and potentially in the offing, the topic of senate reform has suddenly moved from the back burner to the front burner for many Canadians. This may provide an opportunity to begin the process of airing public concerns and potentially moving from an unelected, unequal and ineffective chamber toward the type of elected, equal and effective one that would be the most beneficial for everyone involved.

Federal Conservatives Out of Touch with Provinces

Are you wondering what the federal government is up to?

Has the actions taken by Ottawa (especially the conservative government) got you thinking they are on your side and on the right track?

Then you need to dig past the headlines.

To say I'm not a big fan of the Globe and Mail is the understatement of the year, but every now and then one of their columnists actually maks a point worth noticing. Although the writer clearly missed the point in reference to Newfoundland and Labrador's premier and his attacks on Ottawa, (he was already well above 70% in the polls prior to the election) what follows, from the Globe's Report on Business, is interesting

It raises points that should be considered when it comes to federal/provincial discussions. The question being, who really needs who the most. The conservatives might also want to reconsider their statement that relations between the two levels of government "have never been better in Canada".

From the Globe and Mail:

Finance Minister Jim Flaherty is a master of the headline-grabbing declaration. In the last year, he has told Canadians that Canada's total net debt will be eliminated by 2021; that fiscal balance has been restored; that a planned common securities regulator will enhance regulatory efficiency; and a that corporate income tax rate of 25 per cent by 2012 will be a powerful brand for Canada globally.

The one thing that unites all of these federal claims, aside from the fact that they make short, sweet media hits, is that they won't happen without provincial support. So one would assume that Mr. Flaherty, a former Ontario finance minister, has gone the extra mile to ensure he has buy-in from all his provincial colleagues before presenting his latest plan.

Apparently not.

Spokesmen for a number of provincial finance ministers said this week they hadn't heard a peep from Ottawa before Mr. Flaherty announced his goal of a 25 per cent combined corporate income tax rate. (Ontario's responded with some meaningless twaddle about not wanting to speculate about whether consultations had indeed occurred, but that may have been due to confusion in the new minister's office).

It points to a rather high-handed approach to the very people Mr. Flaherty needs co-operation from if he is to realize the lofty national goals he has set. Running roughshod over the enfeebled opposition parties in Ottawa is all very well. They are, after all, the opposition and would do the same if they had a chance. But the provinces should not be regarded as such if Canada is to work.

Yet if you look at the state of federal-provincial fiscal relations these days, there are lots of signs of acrimony.

Earlier this month, the government of Saskatchewan filed a lawsuit against the federal government over the equalization plan Mr. Flaherty said would restore fiscal balance. Premier Danny Williams of Newfoundland has mused about joining in on the equalization suit, but for now is contenting himself with bad-mouthing the prime minister and threatening to campaign against federal Conservative candidates in the next national election.

Monique Jerome-Forget, the Quebec finance minister, blasted Mr. Flaherty for his tactics, which she called aggressive, in pushing a common securities regulator. She suggested he should spend more time on consultations. And just about every provincial finance minister claims that they are sending more money to Ottawa than they are getting back and want the situation addressed. Some of these provincial utterances can be dismissed as political bombast.

A certain amount of federal-provincial jostling is inevitable when it comes to financial matters, especially if a province is headed for an election, as was the case with Newfoundland and is the case with Saskatchewan. Still, Mr. Flaherty must know that if he wants provincial support for his ideas, it's advisable to at least give his counterparts a heads-up beforehand, rather than forcing them to scramble after the fact.

On the matter of corporate income tax, he acknowledged that the provincial part was not his jurisdiction. But then he announced a goal of 25 per cent that he can't deliver on his own.

A cynical observer might conclude that it's the headline that matters and not the actual achievement. The lowest corporate tax rate in the G7 countries (which is what a 15 per cent federal tax and 10 per cent provincial tax would be as long as everyone else stood still) has a definite ring to it. With luck, media reports will feature that figure rather than digging deeper to see if it is realistic.

Look what has happened with the Alberta royalty changes announced last week: news reports repeated the Alberta government's claims (and oil industry gripes) even though royalty experts noted that it was mathematically impossible for the government to meet its announced targets. A less cynical interpretation is that Mr. Flaherty expects to persuade the provinces to go along on grounds that a low corporate tax rate will attract new business and allow existing businesses to flourish.

Setting aside the lack of groundwork done to prepare for this happy eventuality, there is another problem: the provinces may have other plans for their taxpayers' money. Carole Taylor, the B.C. minister of finance, alluded to this in her immediate response to the federal plan, saying she would have to see how it fit with the province's overall economic plan.

Among the challenges that all provinces face are increasing demands from municipalities for more money, the mounting cost of social programs, and aging infrastructure that urgently needs to be repaired or replaced. Any one of these may appear more urgent to a provincial finance minister than going along with Mr. Flaherty's plan to lower corporate income taxes.

In the past, the federal government could use the promise of more money from Ottawa as a sweetener when asking for provincial support on a particular plan. But the Conservative government says it plans to reduce spending in areas of provincial jurisdiction, a move that will also lessen its clout with the provinces.

The upshot of all this is that unless you are a business operating in Alberta, where the provincial corporate tax rate is already 10 per cent, don't plan on paying a combined rate of 25 per cent any time soon.

Sizing Up The Provincial & Federal Scene

Premier Danny Williams announced his new provincial cabinet this week. There were no major surprises but there were a few smaller ones.

The ouster of two ministers, Jack Byrne and Tom Osborne, from Municipal Affairs and Justice respectively, raised a few eyebrows. While Byrne’s ouster was unexpected, the replacement of Tom Osborne in the Justice portfolio had been rumored for some time.

Osborne’s replacement, Jerome Kennedy is a respected defense lawyer and there is speculation that the former minister may be planning to run for the federal conservatives in the next election, something that would not sit well with the Premier in light of his anti-Harper campaign.

The provincial cabinet grew by two new members flying in the face of Williams promises to shrink cabinet when he took office in the previous election. This move was not overly surprising however in light of the additional provincial revenues at his disposal and after the Premier essentially offered Labrador newcomer, Pattie Pottle, a post during the recent election campaign.

During that campaign there were many indications that Williams might lose all four Labrador ridings. In an effort to shore up support he all but promised the voters that if Ms. Pottle was elected she would receive a cabinet position. After she and two other PC candidates won in the area it was difficult if not impossible for the Premier to walk away from his promise. As a result we come to the biggest highlight of the new provincial cabinet…

…Labrador now has two cabinet ministers around the table, Pottle at Aboriginal Affairs and Hickey in Labrador Affairs. In the past these portfolios were combined and often managed in conjunction with other cabinet duties. Now, both are separate and each has the complete attention of a full time minister, both of whom are from Labrador.

For far too long many people in Labrador have felt forgotten by the provincial government and with good reason. Resource revenues from the region have helped fill provincial coffers for decades yet the area has often had to stand at the back of the line for infrastructure funding and government services.

It remains to be seen if a louder voice in cabinet will actually ease Labrador concerns but it’s certainly a start. Time will tell if the big land will finally receive the same kind of treatment from St. John’s as the province itself has been unsuccessfully seeking from Ottawa for years.

Speaking of Ottawa, on the federal scene Finance Minister, Jim Flaherty, announced his fall financial update this week. In reality it was more of a mini-budget but the conservatives aren’t admitting as much.

The “update” will see a further 1% cut in the GST, personal and corporate income tax cuts and a small reduction in EI premiums for business and individuals. The most interesting part of the announcement is that the personal tax cuts are retroactive to January of 2007 meaning that they affect this year’s tax returns and the GST cut takes effect on January 1.

It seems Stephen Harper has made up his mind to force an election in the spring or early summer. Most likely they’ll accomplish this by structuring the March budget in a way that it offers a few more tax breaks they can run on yet includes something that even the Liberals, as desperate as they are to avoid an election, will not be able to sit by and take a pass on.

All the signs are there.

A week ago the Finance Minister was all over the news presenting himself as a champion for consumers after Canadians vented frustration because a high Canadian dollar was not being reflected in prices at the checkout.

The truth is that Flaherty did nothing to change this reality but by spring many prices will be in the process of falling naturally as old inventories work their way through the system and as retailers, hit by low Christmas sales, begin to force prices down. Whether a natural process or not, thanks to Flaherty’s antics, the conservative party is likely hoping for a bump when prices begin to fall in a few months.

In addition, the retroactive tax cuts announced this week will mean that spring is also the time when many taxpayers will receive a bigger tax refund than they would have otherwise. Spring is also the traditional time of year when large numbers of people consider two of the biggest purchases any of us ever make, automobiles and homes. Though the GST cut introduced this week will save the average buyer very little, anyone buying big ticket items will see substantial savings at a very opportune time for the Harper government.

The conservatives appear to be strategically aligning their stars in order to best position themselves for a spring majority election win.

As one opposition MP recently put it recently, “Don’t be fooled and make no mistake, the conservatives claim to be governing but they aren’t. In reality they’ve been campaigning ever since the last election.”

I guess it’s nothing new under the sun for a government to buy votes with the taxpayer’s own money, but the conservatives are clearly more strategic, calculating and subtle about it than governments have been before them.