It’s time to turn federal-provincial confrontation to co-operation

Perusing the media these days would seem to suggest uniquely divisive battles on many fronts between Ottawa and the provinces. Prime Minister Justin Trudeau—the only first minister from 2015 still in office—is facing pushback from provinces in many areas, including carbon taxes, inadequate support for health care and housing, more unconditional transfers for infrastructure funding, and more support to deal with surging immigration and asylum seekers. While the specific issues change, the dynamics of federal-provincial confrontation tend to run in cycles, and depend on the economy, social tensions, and local and national politics. There has always been a natural tension between the federal government and the provinces—indeed, it is inherent in federated structures, and Canada is one of the most decentralized in the world. Historically, poor communications across a vast and sparsely populated land were blamed and, yet, as telecommunications, broadcasting, railways, and airlines—all federal responsibilities—have connected us, perceived “injustices” between Ottawa and parts of the country continue to fester. As former prime minister Brian Mulroney once said, “This is a difficult country to govern.” The gulf has been caused by several factors. First, the provinces feel that the feds have far greater revenue-raising capacity while they have responsibility for the delivery of programs that impact most directly with Canadians—namely health care and education. This gives rise to depressingly regular battles over the size (and conditionality) of federal transfers for health and social services as well as equalization payments. Left unsaid by the provinces is that it is politically easier—but less accountable—if another level of government does the tax raising and debt issuing, and simply sends a cheque. Second, at any point in time, the economies of various parts of the country can be in quite different shapes, depending on commodity prices, or the state of the American economy, for instance, and this creates perceived imbalances. And third, the elections cycle in Canada is not synchronized, so it’s good politics for provincial parties to rail and run against the feds during their own elections. So, while today’s confrontation is hardly unique, how do we turn it into tomorrow’s co-operation? First and foremost: stay in your lane—unless the lanes merge for shared responsibilities. A federal school meal program has its virtues, but it is a lane deviation. Housing is mostly a provincial and municipal purview except for the recent immigration-driven surge in demand. Alberta’s Bill 18, which requires provincial entities to obtain prior approval from the provincial government before entering into, amending, extending, or renewing an agreement with the federal government, is a major provincial lane deviation. Quebec has also swerved into federal territory on several programs, including infrastructure and aspects of language. Second, the provinces need to recognize that their deficits and debt are their own responsibility. The reality is that financial markets and credit rating agencies are the essential arbiters of each province’s fiscal situation, along with provincial taxpayers—not the feds, and nor can the feds be viewed as a fiscal backstop. For perspective, the combined deficits of the provinces for 2024-25 are $28-billion, or about 70 per cent of the federal deficit of $40-billion. Third, regular federal-provincial meetings are the essence of a mature federation. The meetings themselves also demand maturity: they do not work if the only issue that unites the provinces is more money from the feds; neither do they work if the feds offer ‘take it or leave it’ partnerships. If the European Union—which encompasses 27 sovereign countries—can have productive meetings of heads of government on a frequent schedule, why can’t a single nation like Canada do the same? Fourth, conditionality is not a bad word—it is a standard feature of most commercial contracts and agreements. More health-care cash for reforms, statistics and national priorities worked for the Chrétien and Martin governments and the provinces—why is it impossible today? Increases in the federal child benefit under Jean Chrétien were tied to provincial promises not to offset by reducing their spending— why was something similar not introduced for the new federal disability grant? The feds should be more willing to offer opt-in agreements with willing provincial partners rather than opt out agreements with cash compensation. Fifth, find the shared lanes that pave the way for a better future without running each other off the road. Productivity and long-term economic growth should be priority No. 1 for both levels of government. Blaming each other is neither a solution, nor a viable political strategy. Reducing the regulatory burden and interprovincial trade barriers is low-hanging fruit. Wicked problems like the long-term transformation of our economy from fossil fuels to renewables cannot be solved by either federal fiat or provincial fiat, and certainly not without public buy in. ‘My way’ or ‘no way’ simply doesn’t work in a country whose constitution has created shared highways. Chrétien once said, “Canadian federalism is more than a form of government. It’s also a system of values that allows different people in diverse communities to live and work together in harmony for the good of all.” Federalism works best when it is based on shared economic and social visions of the future. It’s high time to turn confrontation over short-term irritants into cooperation over long-term policies that will pave the road to a better, more sustainable, and prosperous future. Kevin Lynch is a former clerk of the Privy Council, and vice chair of BMO Financial Group. Paul Deegan is CEO of Deegan Public Strategies, and he served in the Clinton White House. The Hill Times

It’s time to turn federal-provincial confrontation to co-operation

Federalism works best when it’s based on shared economic and social visions of the future. It’s time to turn battles over short-term irritants into cooperation over long-term policies that will pave the way to a more sustainable, prosperous tomorrow.

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It’s time to turn federal-provincial confrontation to co-operation

Federalism works best when it’s based on shared economic and social visions of the future. It’s time to turn battles over short-term irritants into cooperation over long-term policies that will pave the way to a more sustainable, prosperous tomorrow.

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