COLUMN

A budget for building a healthier Canada

The hated GST is a godsend, a money machine whose windfall profits will be legislatively earmarked towards paying the debt

DIANE FRANCIS March 11 1991
COLUMN

A budget for building a healthier Canada

The hated GST is a godsend, a money machine whose windfall profits will be legislatively earmarked towards paying the debt

DIANE FRANCIS March 11 1991

A budget for building a healthier Canada

COLUMN

The hated GST is a godsend, a money machine whose windfall profits will be legislatively earmarked towards paying the debt

DIANE FRANCIS

Canada, as we know it, is not sustainable economically or constitutionally. Debts threaten to devour us and their sheer size has, along with the worldwide recession, undermined national unity. Neither Jacques Parizeau nor the Reform Party’s Preston Manning would have much currency if Canada were riding a wave of prosperity. I suspect that the current mood for independence in Quebec has more to do with the collapse in the forestry industry, high interest rates, high taxes and 12-per-cent unemployment in Montreal than it has to do with the collapse of Meech Lake.

But Quebec’s polls underscore the fact that this country simply isn’t working well. Pierre Trudeau’s “just society” bankrupted us with its regressive universality of benefits to rich and poor alike, and mammoth transfer payments to provinces in support of gold-plated programs. Besides leaving us a legacy of economic problems, Trudeau’s 1982 Constitution was flawed. Its notwithstanding clause diminishes certain rights, and allowed Quebec’s premier to overturn a court decision which had declared illegal a sign law that limited the use of the English language. Likewise, the accompanying 1982 amending formula is also flawed— witness how Manitoba and Newfoundland, with peanut-sized populations, could overturn Meech Lake even though it was approved unanimously three years before, and even though premiers representing 93 per cent of English-Canadians remained committed to it.

Fortunately, Michael Wilson’s budget last week continues the Tories’ attack on the debt problem, curtailing program spending to less than the rate of inflation and taking aim at civilservice salaries and transfer payments. The hated GST is a godsend, a money machine whose windfall profits will be legislatively earmarked towards paying the debt. Still, an inability to control interest rates or other governments’ spending plagues Ottawa, with the result that both debts and interest rates are higher than they should be.

The debt is frightening. One hour from now, we will all be $3.5 million deeper in debt. By tomorrow, add another $84 million. Ottawa’s debt now tallies $388.5 billion, or $15,000 for each man, woman and child, up from $2,591 per head in 1976. This year, it will hit $400 billion. The collective provincial-municipal debt is more than $100 billion, or roughly another $3,850 per person, giving Canadians the dubious distinction of being among the world’s most indebted citizens. Hopefully within one year, the deficit, interest rates and unemployment will be much lower, as the recession and the Gulf War end and the GST plus fiscal restraints yield a payoff in the billions.

While a dose of returned prosperity will undermine separatism, Ottawa must finish a nation-building process, paradoxically launched by separatist-leaning Quebec, which may help unite Canada and clean up the debt problem at the same time. The starting point is the Allaire report, the proposed rebuttal by Quebec’s ruling Liberal party to the demise of Meech Lake. Many of its suggestions for dividing powers are valid, especially those which eliminate duplication. Unfortunately, many will do the opposite and add layers to an overgoverned, overtaxed country.

Allaire recommends that Quebec obtain exclusive control over agriculture, unemployment insurance, communications, culture, regional development, social and municipal affairs, education, energy, housing, language, recreation/sports, manpower, research and development, natural resources, pensions, policing or public security, health, environment, tourism and trade, along with industry and commerce. Allaire suggests shared power over taxation, immigration, foreign policy, the post office, financial institutions, justice, native affairs, fisheries, transport and telecommunications. It leaves exclusive power to Ottawa for defence, customs/tariffs, currency and common debt management and equalization payments.

The problem is that Ottawa cannot manage the currency and debt situation without the ability to raise taxes despite opposition from lower levels of governments. Besides that naïve notion, others bear closer examination. For instance, in Ontario there are up to five levels of environmental scrutiny—federal, provincial, regional and municipal, along with conservation authorities in sensitive regions. To me, environment is best left as the exclusive jurisdiction of the federal government because concerns cross boundaries. Even if provinces got exclusive control over the environment, a scaled-down form of federalism would have to be reinvented to co-ordinate laws, adjudicate disputes and sign international treaties. The same reasoning applies to trade, energy and other departments. The next shoe to fall will be Prime Minister Brian Mulroney’s promised amendments to sections 91 and 92 of the British North America Act to redivide powers between Ottawa and all 10 provinces. Let’s hope that Mulroney’s suggestions will be more sensible.

The Prime Minister may find some support for his proposals. “There is a certain logic to federalism,” says Ontario’s socialist Premier Bob Rae. “If Canada didn’t exist, we’d have to invent it. Everyone should be open to institutional reform. We must look at why the country doesn’t work that well and look at the federalprovincial relationship. There is a lot of duplication and overlap and rivalry. I don’t have any sacred cows.”

Rae and English Canada’s other premiers oppose any bilateral deal between Ottawa and Quebec; all provinces must be involved, even if negotiations may be separately conducted. “Loose lips sink ships,” adds Rae. “I’m not going to stake out a position without consulting with the people of the province first. The biggest mistake that I could make is to develop a blueprint approach. Let us genuinely discuss as a country how we can organize ourselves better and remember the advantages of being together.”

If there’s one unifying force among Canadians, it is their dislike for government and taxes. Hopefully, that can be parlayed into a new constitutional order which can also deliver such side benefits as less red tape, lower taxes and more efficiency. Divided, we conquer ourselves. But if united in an effort to create a lean nation-state tailored for the 21st century, we’ll prosper.