Canada

On the offensive

Friction over social policy ignites sparks among the provinces

MARY NEMETH September 2 1996
Canada

On the offensive

Friction over social policy ignites sparks among the provinces

MARY NEMETH September 2 1996

On the offensive

Canada

Friction over social policy ignites sparks among the provinces

Social issues are always lodged somewhere close to the heart of Canada's elusive national identity. Medicare and welfare and concepts like corn-

munity and compassion pluck at the nation’s heartstrings. And so it is not surprising that when politicians sit down to tinker with—perhaps even dramatically reform—decades-old social programs, the fireworks go off.

Last week, nine of 10 premiers as well as the two territorial leaders who met privately at the 37th annual premiers’ conference in the Rocky Mountain resort town of Jasper, Alta., finally agreed to a process to fast-track social policy reform. But along the way, their debate underscored the profound difficulty that diverse provinces and territories have in reaching agreement on complex social issues.

It was a debate that grew especially heated around a report that was not even on the official agenda—a paper prepared for the Ontario government by economist Thomas Courchene of Queen’s University in Kingston, Ont.

In the more radical of two possible scenarios, Courchene suggested that Ottawa—which has used its financial muscle in recent decades to interpret and enforce national standards—withdraw completely from social programs. “The purpose of the report,” Ontario Premier Mike Harris said, “is to stimulate discussion. Mission accomplished.”

In public, at least, the discourse was cordial—even when it was clear that the participants strongly disagreed. Quebec Premier Lucien Bouchard refused to sign on to the conference’s major initiative—a call to dramatically reform social policy through a joint federal-provincial council. Bouchard said that he could not agree to a process that would allow Ottawa to continue to play a role in setting national standards on matters such as health care, education and welfare. But, he added, “I respect the decisions which are taken by my colleagues.”

By then, the Courchene document—the decentralist thrust of which Bouchard had viewed much more warmly—had been shelved, at least for the duration of the conference. Not that it had ever officially been on the table. The Ontario government publicly released the paper just the week before the conference and Harris cited it in a luncheon speech to the Calgary Chamber of Commerce a day before the meeting began. Meanwhile, Alberta Premier Ralph Klein—who was at the same chamber luncheon—complained that national standards had changed over time into federal government standards. And he called for a return to jointly negotiated principles.

The perception that two of Canada’s richest provinces, despite past animosities, were teaming up on the side of decentralization did not sit well with some of the so-called have-not provinces. Be-

fore they boarded the Sandford Fleming train that would take them from Edmonton to Jasper—a trip that Bouchard opted to forgo after it became known as “the unity train”—several premiers spoke out against any proposal to force Ottawa to abandon its role in social policy. Observed Saskatchewan Premier Roy Romanow: “It’s like the elephant saying as he dances among the chickens, ‘I’m all for decentralization.’ ” When they disembarked nearly five hours later, Klein announced that the Courchene report was not on the conference agenda. As Newfoundland’s Brian Tobin later quipped: “Courchene was thrown from the train.”

Quite apart from that report, though, the question of social policy reform evoked some of the underlying fissures among the provinces. As Nova Scotia Premier John Savage said in an interview: “I think there’s a big issue in the background of all premiers’ meetings, and that is what I call the two Canadas—the Canada that has and the Canada that doesn’t have.” And poorer provinces simply cannot afford to take on sole responsibility for social programs unless Ottawa also delivers the funding that goes with the responsibility. “Obviously,” Savage said, “the impact of devolution is more significant on the have-not provinces.”

Few would argue that point, although not all premiers shared Savage’s vision of two Canadas. At the same time, the theme through much of last week’s debate tended to pit the provinces against Ottawa. Klein and others noted that health and social policy are provincial responsibilities under the Constitution. The provinces, in fact, were involved in developing such national standards as the principles of the Canada Health Act. But the federal government has been able to interpret and enforce those stan-

dards by dint of its spending power: Ottawa’s partial funding of social programs is conditional on complying with set principles.

Some provinces have long bridled against that arrangement. But as the fiscally strapped federal government cut its transfer payments in recent years, opposition among the provinces has mounted. The premiers had already asserted at previous meetings that the federal government should not continue to unilaterally set and police standards while it cuts transfers. Even Ottawa agreed to work with the provinces to find ways to set standards together. The council the premiers endorsed last week will work with the federal government rather than on its own, as envisioned by the Courchene scenario. The new council will be given six months, not to define national standards, but to set up a mechanism for establishing those standards.

The devil, as always, is in the details. And last week’s pact left several unresolved questions, including how new national standards will be enforced. Manitoba’s Premier Gary Filmon, for one, observed that “there’s no point in signing on to an agreement unless you agree that you have to review and ensure compliance with it.” Demurred Alberta’s Klein: “I don’t like this word enforcement.” But he conceded that there should be some “mechanism” for ensuring compliance as long as it is “vastly different” from the status quo.

The Klein government has certainly been stung by the system now in place. Ottawa deducted some $3.6 million in health-care transfers to Alberta over nine months before it finally buckled and agreed to ban so-called facility fees for medical services in May. Ottawa ruled that the practice—doctors would charge patients for overhead while also billing K medicare—contravened the Canada Health Act. =j It remains to be seen whether the new mecha! nism developed by the premiers—presumably 3 some sort of federal-provincial agency or arbi-

CANADA

tration panel—would be any more lenient.

What seems clear is that Ottawa is not prepared to go as far as some provinces would like in devolving federal authority. Federal Human Resources Minister Doug Young—who, along with an Alberta designate, will co-chair the proposed joint council on social policy—said last week that he was eager to get on with the job. At the same time, though, federal Health Minister David Dingwall warned that Ottawa will not relax rules that ban extra billing, user fees and private clinics. The demand by some provinces for greater flexibility in these areas was a “code,” said Dingwall, “for privatization to sneak in. That’s not on as far as the government of Canada is concerned.”

Still, by reaching consensus among themselves, the premiers of English Canada managed to draw attention to another perennial fissure in Canadian politics. One of the arguments in favor of far-reaching decentralization as envisioned in the Courchene report is that it would go a long way towards accommodating Quebec’s demands for greater autonomy. But for that province’s current separatist premier, the model adopted by the other provinces last week was fatally flawed. Bouchard’s principal objection was that Quebec had never recognized Ottawa’s right to use its spending powers to influence health and social policy in the first place. Including Ottawa in social policy reform, he said, “will be a systematic recognition of the role of the federal government in provincial jurisdiction.” And once Ottawa is part of that process, he warned, “it will only—because of the dynamic of the situation—increase control.” That interpretation was hotly disputed by Bouchard’s colleagues. They insisted that the point of the council is to get Ottawa to share control with the provinces. Saskatchewan’s Romanow also pointed out that Quebec could opt out of any mechanism devised by the other premiers. But it was Newfoundland’s Tobin who put the most enthusiastic spin on the agreement. “I think the most difficult thing for Lucien Bouchard today,” said Tobin, “must be the great measure of excitement that he’s feeling about this change that’s under way, all the time understanding that nothing will more undermine his drive towards sovereignty than a tangible demonstration that the federation is strong and is working well.”

It will be at least six months before even a mechanism for tangible change is devised. And it is easier to set up a council than to set firm standards—especially in an area as sensitive as social policy. Whether the council can sway the national unity debate remains to be seen. But to some extent the future of Canada—its very vision of itself—could well rest on the outcome of last week’s deliberations.

MARY NEMETH