In the previous column, I pointed out that being in a state of dependency is a poor way to run a province. After 50 years of equalization payments, services for health care, education and welfare in the various provinces are not at a “reasonably comparable level.” This is the goal of the equalization program.
As examples, there are catastrophic drug cost insurance plans in most of the provinces, but not in New Brunswick. New Brunswick’s welfare payments are at the bottom of the range, vis a vis the other provinces. Universities in New Brunswick have some of the country’s highest tuition fees. And so it goes. The equalization payment program has failed to achieve its goal.
Worse than this, I believe that equalization payments have discouraged individual initiative in this province and distorted the provincial government’s decision-making. We have grown accustomed to being poor. Many residents of this province have very limited aspirations. Further, the emigration of our young people out of the province continues. The westward emigration has persisted through most of the 20th century and into the present one.
The result of this situation has been a proliferation of jobs in the public sector. The “good government job” has been the hope of many. We have the highest number of bureaucrats per capita of any province in Canada. We have created employment, but it has been in the wrong place. Never before has it been as possible as it is now to free up employable people to work in the private sector. Our demographic profile shows a reduction in the size of the working population over the next 20 to 30 years.
If we are to overcome our dependency on transfer payments, then we need to move employment from the public to the private sector. The only way to make this happen is to reduce the size of the bureaucracy. At the same time, if you subsidize private sector companies, you have made them dependent as well, and they may well undertake activities that will drive them out of business.
For example, if the government encourages higher levels of employment with the use of subsidies, down the road the company may go belly up from being over-staffed. Keeping a private sector company profitable is hard work. You don’t want the government to be directing your decisions.
This brings me to another of my pet peeves. I was pleased to note that the Harper government, when first elected in January, 2006, had as one of its policy positions the shutting down of ACOA. This was one of the few policies that I liked in their platform. However, as with the other ideas that inspired the first Harper minority government, this policy was later abandoned. ACOA is still with us, and at present, it has a ton of money to give away to organizations in Atlantic Canada.
I grant you that although ACOA came into existence specifically in Atlantic Canada because this region has always lagged the others in terms of economic development, such agencies are now present in all the regions. If you’re going to shut down the public trough in Atlantic Canada, you should shut them down everywhere.
I don’t object to single loans to worthwhile private sector companies on a one-time basis. But, the government must do this directly and openly, and it must share the results of success or failure. After all, McCains was launched with a one-time loan of $1 million from the province, which was promptly paid back. No one could complain about the success that has followed in the upper river valley as a result of this intervention.
I don’t even object to failures, as long as there was a reasonable chance that a company could be successful. Let’s have a business-like process. I don’t like bureaucrats being in the middle of the transfer of funds, when often political decisions are being taken. I’d prefer that the process be transparent.
After 50 years, the three maritime provinces remain at the bottom of the heap when it comes to gross domestic product per capita by province. Such numbers for 2005 are: P.E.I., $30,166; N.B., $32,152; and N.S., $33,484. There is a tendency to accept handouts and to adjust your provincial administration accordingly. Far better to pursue some encouragement of business activity through adjustments to taxation policy. In this regard, I feel that the tentative movement in New Brunswick toward reducing individual and corporate income tax rates is a good thing.
Now, it would be good to move people from employment in the public sector, to employment in the private sector. We need a culture of individual initiative and risk-taking to develop, rather than continuing as a province that remains on the dole.
Jo-Ann Fellows is a writer living in Fredericton. Her columns on seniors concerns and on public policy issues appear twice a month on Mondays.