Regional Subsidies Damage Ordinary Ontarians: David Mackinnon addresses Belleville Rotary Club

David MacKinnon, Equalization, Speech (historic), Uncategorized

Thank you for inviting me to speak today, and to tackle a taboo subject:  how one of Canada’s most sacred cows—regional subsidies—is, in fact, chewing up the country’s economic foundations, national unity and future prospects.

Imagine for a moment that we could lay a satellite image of Halifax, Nova Scotia over the Belleville and Prince Edward County area and some parts of surrounding counties.  We are talking about two roughly equivalent areas in terms of population.  But if we compare the two regions in terms of resources funded by taxpayers, the differences are nothing short of amazing.

Halifax is home to no less than five of the eleven universities serving Nova Scotia’s population of 850,000. 

The lovely campuses of Dalhousie University and St. Mary’s University, are both in Halifax.  Just a mile apart, these two schools each offer a full MBA program—and this, in a metropolitan area of about 300,000 people. This is preposterous.

 Here in Belleville, the closest universities are Trent, in Peterborough, and Queens, in Kingston, and they are very different places with little duplication in programs.  They’re also a two and a half-hour drive apart.

The same is true for health services:  Halifax has seven major hospitals, one of which, IWK, is a university-accredited research centre.  The entire region of Belleville, Prince Edward County and Trenton,  more geographically spread out, has four hospital sites and one corporate structure. 

Incidentally, Nova Scotia has no less than 32 public hospitals and Manitoba, with a population just over a million, has 70. This is both bad medicine and terrible finance. Even worse, my home province has eight hospitals to serve 140,000 people in a very compact geographical area.

So who is paying for the higher standard of services in Halifax and Manitoba and Prince Edward Island?  Well—you are.  Along with other taxpayers in Ontario, Alberta and other parts of Canada. 

Supporting our most vulnerable populations is a long-held value.  But there are very serious problems that arise when people are subsidizing a higher standard of services for others than they can afford for themselves.  Both recipient and contributor are damaged.

Our system of regional subsidies, which many consider to be a key aspect of the Canadian federation, includes equalization and additional subsidies, embedded in other federal programs, that are as large as equalization. Ontario taxpayers have been subsidizing other Canadians since 1958 by of up to $25 billion a year.

I have seen the system from both sides.

Read the entire speech (6 Pages)