Two solitudes

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Rest of country sees equalization issue differently

Amid the rancor, two solitudes have evolved in the ongoing debate about equalization and the Atlantic Accord.

Here in Newfoundland ad Labrador and to a lesser extent Nova Scotia and Saskatchewan the talk is all about Stephen Harper's Big Lie. The evidence as articulated clearly in this Telegram editorial (scroll to June 13) shows that Harper not only lied, but is also violating the terms of the Atlantic Accord, which clearly state that amendments cannot be made without the consent of both governments.

However, in the rest of Canada, everyone is talking about our demands on equalization. Harper's Big Lie is not the focus of discussion. Editorial writers have been coming down pretty hard on this province's position. The general perception, to summarize bluntly, is that Newfoundland wants to continue receiving welfare payments long after it becomes rich from oil.

The online news coverage I've been reading from the mainland papers is generally balanced and addresses both sides, but the editorials are another matter. For example, here's an excerpt from a June 17 editorial in the Edmonton Journal:

Even as they have become richer, the Atlantic provinces have received more and more equalization.

Now their governments are claiming they are being robbed because the Harper government will no longer agree to send more money still, regardless of how well their economies are doing.

Equalization, too, long ago ceased to go to services for Atlantic Canadians.

Now more than 70 per cent of new transfer dollars go to expanding provincial bureaucracies and paying Atlantic public servants the highest purchasing-power-adjusted public salaries in the country.

McGuinty is right. Ontarians shouldn't sit idly by as other provinces pull ahead of his while Ontario pays a big share of the costs. And neither should Alberta.

The anger about Harper's lie is evident on the open lines, and in letters to the editors and various opinion pieces. But it's when you get into the blogosphere that the gloves really come off, on both sides of the debate. In local blogs, of course, the anger at Harper's lie is simply turned up a few notches. However, with some scattered exceptions, there is precious little discussion about whether or not we deserve what we were promised. The point is, it was promised to us.

In blogs outside this province, and presumably outside of Nova Scotia and Saskatchewan, Harper's lie is not really the issue. The focus is on the have-not provinces wanting more than they deserve. Take for example, this item from the Alberta blogger Waking Up On Planet X:

Now, on to Danny. Having driven the oil companies out of the province, among other things, his province's only fiscal hope appears to be from the feds. He sees absolutely NO REASON for a cap on the new formula, and screams that it's unfair.

No, jerk, what's unfair is the idea of Ontario, Alberta, BC & (maybe) Saskatchewan forking over cash so you can spend MORE PER CAPITA than those of us bringing home the bacon. I understand that maybe joining Canada wasn't the best thing for the province (although I'd bet that pretty much every province and territory can come up with similar arguments if they look hard enough, and let's not talk about First Nations or we'll be here all night), but the fact is, they did. As part of a larger country, the state of the whole thing needs to be considered, at least in a perfect world.

Thus far, the most interesting, most balanced and possibly most accurate opinion piece comes from Andrew Coyne (right) of The National Post. Coyne leans a little to the right, as does his paper, but he is an intelligent, well researched, and carefully considered writer who carries a brief for no party.

In his commentary of June 13, which you can read in full here, Coyne has at it with both the Prime Minister and Premier Williams. Here's his opening salvo:

I am trying to decide which is the more outrageous: the Atlantic premiers' phoney grievance over the new equalization formula contained in this year's budget, or the Harper government's phoney promises with regard to same before the last election. It's a near thing, but I'd give the premiers' preposterousness the edge over the Harperites' hypocrisy...

Indeed, it is only the Harper government's well-earned reputation for deviousness that has allowed the premiers' campaign to get as far as it has. Were the Conservatives less distrusted, premiers Williams and MacDonald would be seen for what they are: shakedown artists, in the grand tradition.

Now "shakedown artist" is strong language, but, if we look at the prelude to this controversy, we can see where Coyne is coming from. In the heated air of two federal election campaigns, Premier Williams made some significant "asks" and received big promises from Paul Martin in 2004 and Stephen Harper in 2006.

Is it a surprise that both made promises they couldn't keep? The only difference between Martin and Harper is that Williams, after intense negotiation and considerable acrimony, was indeed able to "shake down" the Martin Liberals. I am not taking sides with Martin, Harper or Williams for this; it's part of the rough and tumble of politics.

Coyne claims that the 2005 accords with Newfoundland and Nova Scotia were "too sweet" and should never have been signed.

Under the accords, the two provinces will still be entitled to equalization even after their governments, already awash in oil revenues, have grown wealthier than Ontario's. When is that far-off day? In Newfoundland's case, it's today: for 2007-08, Newfoundland's per capita revenues, equalization included, total $7,094, to Ontario's $6,631. This is simply untenable -- which is why the O'Brien report, on which the new equalization formula is based, proposed a "cap" on equalization payments at this point, ensuring Ontarians will not be paying for services in provinces that are richer than their own.

And here is Coyne's frank assessment of the situation, from the conclusion of his column:

What the premiers are demanding is some mythical third option, one with higher payments, no clawback, and no cap. They want the best of three worlds: to have their cake, eat it, and spin it above their heads.

Which would be more outrageous, were that not what Stephen Harper, in effect, promised them. As Opposition leader, Mr. Harper was not only unequivocal in committing to full exclusion of resource revenues from any new equalization formula -- meaning no clawbacks -- but that this should apply, well, forever: i.e. sans cap. Here he is in the House of Commons on November 4, 2004:

"Why should Newfoundland's possibility of achieving levels of prosperity comparable to the rest of Canada be limited to an artificial eight year period? Why is the government so eager to ensure that Newfoundland and Labrador always remain below the economic level of Ontario? The Ontario clause is unfair and insulting to the people of Newfoundland and Labrador, and its message to that province, to Nova Scotia and to all of Atlantic Canada is absolutely clear. They can only get what they were promised if they agree to remain have not provinces forever."

It is not true, then, to say that the Accord has been violated. It is true that Mr. Harper played Atlantic Canadians for suckers. At least he is paying the price.

Should we really be all that surprised to learn that Harper's election promise was a lie? More to the point, what do we do now? Separation from Canada keeps popping up, but I don't think the idea has any real traction.

The ABC tactic voting anything but Conservative in the next federal election may feel satisfying, like whacking those pop-up animal heads at the local games arcade, but, as a strategy, what does it get us? Would Stéphane Dion treat us any differently?

It's the notion of have not' provinces like Newfoundland and Labrador receiving greater per capita revenue than have' provinces like Ontario that is creating the two solitudes. Ontario is struggling with its own issues with debt, crumbling infrastructure, health care costs, and more can we blame them for taking exception to the scenario Coyne describes?

This argument would be very different if Harper had handled it like income trust, by admitting that the promise was a mistake that shouldn't have been made. If he had done the same for the equalization promise, things would be different right now. He would have saved face and earned more sympathy across the country. As it is, he's got a PR disaster on his hands.

What rankles people the most in this province is Harper's brazen insistence that his promise was kept and the Accord is intact. If he just had the balls to admit he was wrong, it would allow us to get past the fury and begin to engage in more of an intellectual and less an emotional debate.

The shakedown' alone isn't going to cut it this time. This issue has the attention of the entire country, and no prime minister is going to guarantee zero clawbacks at risk of offending certain other provinces.

We're going to have to close the abyss that divides us. We don't need to kow-tow to the Prime Minister (that relationship is beyond repair and he is not to be trusted anyway) but the two solitudes will not disappear and our goals on equalization will not be achieved until we find some common ground with the rest of the federation.

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