Senator Duffy is Right

Commentary, Equalization, David MacKinnon

Recently, there has been some controversy over Senator Duffy’s comments about the similarity of the views on equalization held by Premiers Ghiz and Williams. Senator Duffy has criticized Premier Ghiz for agreeing with Mr. Williams that proposed federal changes to equalization should be postponed and he has done so in unambiguous and colourful language.

I think there is ample justification for Senator Duffy’s views and that he has performed a public service to all Islanders by expressing them.

We need to get past the colourful language on this matter and explore what may have been Senator Duffy’s real intent.

Senator Duffy may have been warning Islanders about excessive dependence on equalization and other federal subsidies. He probably knows – as any close observer of public opinion in Ontario knows – that the days when Atlantic Canadians could simply look to the federal government to access more subsidies from other Canadians, principally people who live in Ontario and Alberta, are coming to an end. They are coming to an end for three reasons.

The first is that the original purpose of equalization, comparability of provincial programming across Canada, has long been achieved and in fact the pendulum has swung so far that nearly all provincial programming is much more accessible in Atlantic Canada than in Ontario. Anyone who doubts this should spend an afternoon surfing the Statistics Canada website to determine the facts for themselves.

The second is that both Alberta and Ontario are experiencing grave problems in the industries that have been key to their economies for decades. Ontario has slipped into have not status and about $90 billion in oil sands projects have been cancelled or postponed in Alberta in recent months. Is it really reasonable for Islanders to be looking to citizens of these provinces for continued subsidies and postponement of caps on them under these circumstances?

The third reason involves the stark unreality of many of Atlantic Canada’s political leaders in relation to postponing the planned adjustments to equalization.

These leaders cite difficulties in planning and budgeting as their reason for seeking postponements.

In the real world there is no protection for Albertans or Ontarians when their economy deteriorates. The revenues of their provincial governments plunge immediately, as we have seen, when the price of oil drops or Americans can’t get the credit to buy automobiles. Messrs Ghiz and Williams need to consider why they are entitled to predictability and certainty and ordered negotiation when none of these are available to the citizens elsewhere where the funds for regional subsidies are largely generated.

I don’t know Mr. Duffy’s actual views. If, however, he was warning that excessive dependency on subsidies is dangerous, that Islanders are not entitled to treatment by governments that is not available to others and that there are risks in offending public opinion in contributing provinces by constantly seeking more money from them, then he is proving his merit as a senator and deserves recognition for his courage.

A year ago, the Guardian published a column I wrote about these issues. I warned Islanders that the biggest risk to their future is PEI’s current dependence on funding from other Canadian taxpayers channelled through the federal government. I also suggested several steps that Islanders could take to build self sufficiency and move to an economic future based on their own capacities rather than the largesse of others.

Recent events have largely reinforced the concerns I expressed and made the solutions more relevant than they were. In fact, I regret that I did not make the warning clearer.

What I ask, and I expect that Senator Duffy feels the same, is that Islanders consider a very different approach toward a better economic future and take every opportunity to be more self sufficient. As part of this, they should not be looking for more money from Albertans, Ontarians or other Canadians in the current environment and they should not seek postponements, predictability and order in the many subsidies they receive that is not available to the people who currently pay so much of the freight for PEI’s excellent public services.

One might hope that Premier Williams would learn this as well. That, however, is wildly improbable. That is why alliances with him at this time are unwise and ill considered.