Canada

Social disunion

The premiers want Ottawa to toe the line on new funding

MARY JANIGAN August 10 1998
Canada

Social disunion

The premiers want Ottawa to toe the line on new funding

MARY JANIGAN August 10 1998

Social disunion

Canada

The premiers want Ottawa to toe the line on new funding

MARY JANIGAN

In the beginning, at their first sumptuous annual conference in the early December chill of Quebec City in 1960, the premiers were timidly polite, deeply divided—and fretfully anxious not to offend the federal government. Summoned by Quebec’s Jean Lesage, many provincial leaders were hesitant even to discuss Ottawa’s ever-growing spending in areas of provincial jurisdiction such as hospitals. After two days, facing their own pressing need for federal cash and the disapproval of prime minister John Diefenbaker (who refused to attend), the premiers resisted Lesage’s call for the creation of a permanent interprovincial council to deal with Ottawa’s ventures onto their social policy turf. Instead, they only agreed to meet again, in Charlottetown, in August, 1961. “But Lesage could see ahead; even if the meeting accomplished very little, it had started something,” says former Quebec cabinet minister Eric Kierans. “Sure, there was a big hospitality display, but Lesage knew exactly what he wanted. He was going to combine all of the premiers.”

Lesage, who died in 1980, did not realize his dream. But the premiers are finally forging that near-united front as they gather for the 39th annual premiers’ conference in Saskatoon this week. To the exasperation of the federal government, they were focusing the two-day meeting on their insistence that Ottawa must curb its unilateral spending on social programs. They will publicly affirm what they privately demanded in a position paper, formulated after three years of discussions and delivered to the federal government two months ago: Ottawa and the provinces must negotiate a common set of rules—that is, a social union—so that they jointly decide how new federal money should be spent on social programs. And both levels of government should determine and enforce standards for those programs, among them medicare.

With the so-far passive backing of Quebec Premier Lucien Bouchard, the other nine premiers have even decided that, by late autumn, before Ottawa finalizes its 1999 budget, they want to conclude a pact. Ottawa will increase its cash transfers for social programs to the provinces—and the provinces, in turn, will commit every penny of that money to health care. At the end of each fiscal year, they will publish detailed accounts of how they have used that money—and what effect it has had on their citizens’ well-being. “Without collaborative input in the announcement of new initiatives, such as in health care, we set the stage for continued acrimony and confusion,” Saskatchewan Premier Roy Romanow, chairman of this year’s meeting, told Maclean’s. ‘We stand on the brink of a wonderful opportunity to make this

country work better: the premiers are calling for co-operative federalism in order for us not to squabble—but to do the best we can with limited dollars.”

The premiers’ stand could set the stage for an increasingly tense clash over the next six months involving two different visions of how the country should work. Although intergovernmental talks began last January, Ottawa entered the negotiations reluctantly—and only recently tabled a formal position paper. It rejected many pivotal provincial demands—including

the right to jointly enforce the Canada Health Act, which penalizes provinces that permit extra billing.

Although Prime Minister Jean Chrétien and Romanow agreed last week at a hastily scheduled meeting in Saskatoon that federal and provincial cabinet ministers would continue to negotiate the social union throughout the fall, the federal government has already drawn some deep lines in the sand. A senior federal official told Maclean’s that Ottawa does agree with the request for an accord that sets out federal-provincial standards, including mobility rights to ensure that citizens who move are guaranteed equal access to social programs in every province, accountability for how governments use every penny of social funds, and, predictability, each party gives the others as much notice as possible when it tinkers with policies that could affect its fellow governments. Ottawa has even suggested that no province should impose higher tuition fees on students from other provinces.

But, as Chrétien privately told Romanow, Ottawa will put no further curbs on its spending power. In 1996, the federal government pledged that there would be no new shared-cost programs in areas of exclusive provincial jurisdiction without the consent of the majority of the provinces. The premiers have now asked that Ottawa obtain the consent of the majority of the provinces before it implements any new social program—and to Hilly compensate provinces that opt out to create similar programs. “That’s just not on,” said a federal insider, adding that Ottawa would only be willing to notify provinces before it introduced new social initiatives.

The real flash point, however, may be the premiers’ call for increased cash transfers— up to $6 billion over three years—for health care. Although the premiers have offered to g account for every penny, they are unwilling £ to tie the funds to any particular use. As Rof manow noted, some provinces need better | home-care programs—and some need more ^ magnetic resonance imaging machines. £

“You could not have a one-size-fits-all program,” he insisted. Ottawa views such statements as a negotiating position: that is, it still hopes to find some way to earmark federal funds for a splashy home-care initiative to which all provinces must commit new funds.

The premiers may also face some federal resistance to the other two major items on their agenda. They will call for lowering Employment Insurance premiums from $2.70 per $100 of employee income to $2.20—at a cost to the federal treasury of $3.6 billion. The premiers will also request a new federal-provincial infrastructure program, arguing that a trading nation needs better highways to connect provinces with each other and U.S. markets. (The current program, which received $6.4 billion in federal funds over five years, expires next March.)

The 10 provinces and Ottawa may keep talking—and keep their tempers—because of Quebec’s newfound enthusiasm for an interprovincial alliance. After three years of repeatedly denouncing the push for a social union because it would recognize Ottawa’s role in social programs, the Parti Québécois government has apparently changed its mind. Last month, after intense prodding from Jean Charest’s opposition Liberals, Intergovernmental Affairs Minister Jacques Brassard declared that the provinces’ position paper was in accord with Quebec’s traditional views. And although Quebec officials remained mere observers at federal-provincial talks in Regina two weeks

ago, the province’s tacit support increases the pressure on Ottawa to prove that the federation can work. “We have learned that constitutional reform is not the answer,” Ontario Intergovernmental Affairs Minister Dianne Cunningham told Maclean’s. “People want results: governments must work together through agreements.”

The provinces’ current militancy dates from the mid1990s when Ottawa trimmed more than $6 billion from its cash transfers. Squeezed for funds, the premiers argue that they have earned the right to ensure that their needs and priorities are considered as Ottawa, having balanced its budget, pours money back into the system. Prior to this week’s meeting, provincial officials gathered statistics on Ottawa’s cash contribution to health, postsecondary education and welfare. In Ontario, which has been the hardest hit, Cunningham calculates that the federal cash contribution has dropped to 7.6 per cent of health-care costs—and only 5.2 per cent of postsecondary education—down from about one-third in the 1970s. Nationwide, Ottawa now pays about 14 per cent of the tab for social programs. As one se-

nior provincial official told Maclean’s: “These numbers show the dismantlement of medicare by stealth—and it’s not coming from the provinces.”

The federal government insists that little has changed: Ottawa has always been embroiled in a tug-of-war with the provinces. “It is always easy to have a common front on a grocery list of demands,” said one federal official. He added that after the first interprovincial conference in 1887—long before such meetings became an annual tradition—the provinces also sent a list of demands to prime minister Sir John A Macdonald. “The difference,” he said, “is that there was no television in 1887—so Macdonald put the list in a desk drawer and never responded.” In the end, despite Ottawa’s reluctance, it is clear that the balance of power is subtly shifting within the federation. As University of Toronto political scientist David Cameron notes, the annual premiers’ conferences have become a “significant intergovernmental institution,” generating new ideas on national unity and social reform. “Ottawa has been surprised by the strength of the common front,” notes Cameron. “But in Ottawa, I can see no sign of an interest or capacity to think afresh about the larger questions that shape the country. The energy and the ideas have come from the provinces.” And in the end, those ideas and energy could strengthen the Canadian union. □