Will Maxime Bernier Bankrupt Maritimes

Conservative MP and Harper insider wants to end transfer payments for tax points
Maxime Bernier wants to cut transfers to provinces

Living on Federal welfare has been a balancing act on PEI and other maritime provinces for decades. The Provinces receive hundreds of millions more in transfer and equalization payments but we may be reaching a strategic inflection point in federal policies.
Last week Conservative MP Maxime Bernier told the Albany Club in Toronto that Canada should re-negotiate Provincial transfers.
“The federal government today intervenes massively in provincial jurisdictions, and in particular in health and education, two areas where it has no constitutional legitimacy whatsoever. This is not what the Fathers of Confederation had intended.” (Globe and Mail)
To make sure Canadians got the message, he was interviewed by CBC last night and repeated the call to end Federal interference in Provincial affairs. He calls it “restoring our federal union.”
That would probably be revenue neutral for Quebec, Ontario, BC and Alberta but would significantly lower provincial budgets in Nova Scotia, New Brunswick, Newfoundland and especially Prince Edward Island.
The Maritimes don’t have the tax base to gain in the change and will see their equalization payments decline.
Transfers fund the basket of social programs like health care but only to a small extent. The provinces’ share has been climbing until the Federal government is paying about 20% of health care but calling most of the shots with rules on privatization for instance.  
In the balance, Bernier suggests the non-controversial, quid pro quo of giving the Provinces equivalent Federal tax points.  For instance, the Feds could drop income tax allowing the provinces to raise their rates. Or the Feds could allow more of the GST to go to the provinces.
Relatively wealthy provinces want more taxes and autonomy. Conservative values call for smaller government and more provincial autonomy as well so there are mutual interests.
The Globe and other pundits say Bernier is talking out loud but has no authority. However, it’s not uncommon for leaders in Prime Minister Stephen Harper’s position to use a bully boy to float their more controversial ideas.
Bernier, disgraced in the past for having a biker chick girlfriend connected to organized crime, has little to lose and much to gain. He speaks to the disgruntled Conservatives who are disheartened by Harper’s swing to centralist spending. He is also positioning himself for the inevitable Conservative leadership convention should Harper form another minority government or worse lose his job as Prime Minister.
Being the leader of a minority government has forced Harper to act like a liberal spender, upping transfers by 40%.
The current agreement with the provinces ends in 2014. If Harper gets a majority he will no doubt return to his roots of smaller government is better government.
Stephen Harper mis-spoke himself once before calling Maritimers “lazy”.  That’s a thread of conservative and tea party thinkers. The unemployed are lazy bums. Last November, Gerald Keddy repeated the slur. “Conservative MP Gerald Keddy has apologized for saying unemployed Haligonians are “no-good bastards”"CTV
The consensus in ROC (rest of Canada) is that Maritimers are lazy bums and even the businesses are living off the spoils of patronage. Macleans article on corruption in Quebec said  patronage is a fact of life in the Maritimes.
Many people in business in Ontario, Alberta and BC think the Maritimes are bleeding Canada and that we are riddled with corruption.
Hard to argue that PEI isn’t riddled with scandal. The $540 million PNP boondoggle was almost half the annual provincial budget in 2007. No province in Canada has our level of corruption.
As long as Harper needs seats in Atlantic Canada to maintain his majority, transfer payments will remain healthy. They may drop if the Conservatives get a majority. They have too many doctrinaire followers not to enact their agenda. Look at the energy they are putting into canceling the long form census.
Maritimers should be trying to reduce deficits and build independent economies while there is time.
PEI has never been able to get passed filling the bank accounts of patronage friends. When the money dries up, we will be bankrupt and may have to consider Maritime union. Who knows.

By Stephen Pate, NJN Network

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