Premier Ghiz – it’s strange to use that phrase again. Premier Ghiz, when he announced his new cabinet earlier this week, named himself as minister of inter-governmental affairs.
As the new administration cuts its teeth, the premier will need to ride herd on everyone to make sure he or she follows the agenda he has laid out. He may not have time to be a part-time minister.
In a small province like the Island, the inter-government affairs portfolio is critical in ensuring that the other jurisdictions – the federal and provincial governments – know what the Island’s position is on any given issue, and to make sure the premier and his ministers fully understand the issues, and their implications, when they meet their counterparts at national meetings.
Premier Ghiz needs a deputy of inter-governmental affairs who not only has a good grasp of the Island’s interests, but who knows what the interests of the other jurisdictions are. To be a good negotiator, you not only have to know what you want, you also need to know what the other parties want.
With a small population, the Island doesn’t have a lot of power, but it does have a vote, and used properly, that vote can be very effective, very beneficial.
For Mr. Ghiz, his first exposure to his counterparts comes in 10 days time when he and the governor of Vermont will co-host the 31st conference of Eastern Canadian Premiers and New England Governors at the Brudenell resort.
Fortunately for the new premier, this conference is more about socializing than wheeling and dealing. But one thing that is bound to come up, if not in the formal sessions, at least in the corridors and in the informal discussions, will be the issue of the Atlantic Accord and equalization payments.
At first blush, it might seem natural that the Island side with Nova Scotia and Newfoundland against Ottawa in their demands that non-renewable resource revenues not be included in the calculations determining equalization payments.
It may be difficult to go against one’s neighbours, but the Atlantic Accord does not benefit P.E.I. or New Brunswick. There is only so much money available for equalization. If Nova Scotia and Newfoundland get a disproportionate share, there’s less for everyone else.
Premier Ghiz should find some time to either sit down with David MacKinnon, an Islander who grew up in Charlottetown, or at least read a copy of a speech he gave in Halifax this week.
Mr. MacKinnon is a former senior bureaucrat in both the Nova Scotia and Ontario governments, and he is highly critical of the equalization system. He says Canada has the world’s largest system of regionally based subsidies, and nobody knows if it works because the economic impact of the system has never been examined.
He says the goal of equalization has always been comparability of government programs, but Ottawa has never developed even the roughest measure of program comparability to determine whether the system is achieving its goal.
Mr. MacKinnon says this program, which was to enhance the unity of the country, has become a cause for national disunity. Recipient provinces keep demanding larger and larger payments and Ontario, which has always been the major contributing province, is less willing and less able to pay.
He points out that the manufacturing industry of Ontario isn’t the economic engine it once was, that in the past few years Ontario has lost 66,000 high-paying manufacturing jobs.
Mr. MacKinnon says that in a recent speech the premier of Saskatchewan boasted the provincial economy is sizzling hot. Saskatchewan has record employment levels, whereas Ontario’s unemployment rate exceeded the national average for the first time in 30 years. Ontario is also experiencing a decline in average incomes compared with the national average.
Yet, in spite of its booming economy, the Saskatchewan government indicated Wednesday it will take the federal government to court over the changes to the equalization system. Equalization is complex with no simple solutions, but Mr. MacKinnon did have one interesting idea. Instead of equalization payments, he suggests the federal government take over the debt and interest payments of the poorer provinces. This would give them a clean slate and enable them to establish new economic policies, perhaps even lower taxes. But the provinces would also be responsible for the full cost of their public services – no more 50 cent dollars.
If the federal government made an offer like that, would Robert Ghiz, or any other Atlantic premier, buy into it? Or has dependency become a habit?
Alan Holman is a freelance journalist living in Charlottetown. He can be reached at: firstname.lastname@example.org.
To read David MacKinnon’s remarks, click here.