It’s summertime, and it’s hard to get enough words to fill all the spaces.
Hence, the Financial Post’s printing of a lengthy op-ed on equalization by three writers from two business-positive think-tanks on the need to reform equalization on Wednesday.
No, I’m only kidding. Mostly.
The op-ed in question came from Marco Navarro-Genie, the president of the Atlantic Institute of Market Studies, Peter Holle, president and CEO of the Frontier Centre for Public Policy, and David Mackinnon, who is a senior fellow at both think-tanks.
The crux of their argument? That the equalization system, which tries to ensure that all Canadian provinces can have access to funding to ensure they can offer comparable services to Canadians, regardless of their location in the country, needs to be reviewed.
Are the think-tankians right? Well, they are about some things. I think they are correct that many Canadians glaze over when they hear the word “equalization,” let alone have to try and think about how the concept is supposed to work.
There are plenty of things that contribute to questions about the competitiveness of the Atlantic provinces: high taxes are one, but, then again, so is the requirement for paying something close to a living wage.
I’m not so sure about the next part, where the trio argues that easy equalization money has led to a growth in public sector spending in the Atlantic region and a corresponding increase in taxes to pay for that growth. After all, if there wasn’t equalization money, services would still have to be provided, and provincial taxes would necessarily have to be even higher — unless, of course, we’re cutting back on spending, too. (And is it too salty to point out that three writers for one op-ed is a bit of unnecessary growth in itself?)
When the argument veers into the need for competitiveness — a metric that basically means the location that has the lowest costs for businesses is necessarily the best — I’m afraid they lose my agreement entirely.
I think we’re just looking at different ends of the telescope.
The trio writes, “For example, self-employed fishermen are given access to employment insurance, but that kind of support is not available for any other group of self-employed people. There is no ethical basis for deciding that only self-employed fishermen merit support when they have employment difficulties.”
In contrast, I might argue that there is no ethical reason for Atlantic fish processors to be allowed to profit from artificially depressed fish prices due to EI subsidization of fishermen, nor is there a reason that fish processors are allowed to benefit from captive work forces funded by EI for part of the year.
There are plenty of things that contribute to questions about the competitiveness of the Atlantic provinces: high taxes are one, but, then again, so is the requirement for paying something close to a living wage. So is having to live up to first-world ecological and environmental standards.
The U.S. is loosening environmental standards to benefit American producers in everything from the coal industry to other chemical polluters.
Should we follow suit, because the battle to the bottom — to be the ideal most competitive jurisdiction — might be great for the captains of industry?
Obviously I feel differently about that than Navarro-Genie, Holle and Mackinnon. I actually think there is a place for regulation and government, for the good of all of us.
(I will just point out here, as I regularly do, that foundations like AIMS and the Frontier Centre are beneficiaries of a peculiar facet of the Canadian tax system: they are both registered charities. In 2016, the last year for which the Canada Revenue Agency has posted figures supplied by AIMS, the institute took in $615,283 in gifts, and wrote $605,683 in charitable tax receipts. In the same year, the Frontier Centre took in $1,124,317 and wrote charitable donation receipts for all of its donors.)
Should we all be regularly looking at how our overall systems of government work?
Absolutely.
But there is more at stake than corporate interests.
Russell Wangersky’s column appears in 39 SaltWire newspapers and websites in Atlantic Canada. He can be reached at [email protected] — Twitter: @wangersky.
