Has the happy little boat of Canada sprung a leak?

[Geronimo]

Originally posted by notyoueither
I should say that I have an insight(?) on the issue that is not obvious from the posted articles.

I listened to Naylor on the radio today. He all but said that equalization had been rigged to keep Quebec in Confederation. He said it was rigged. He said that Quebec got the greatest benefit of the rigging. He just never put a to b and came out and said it.

I was wondering if he were a Tory. Then I checked and saw the noises that McGuinty is making. Having heard the problems Ontario has been going through, it falls into place.

Federalism by bribery is not sustainable. Some people in Ontario are starting to say so. The debate over the next while wil be interesting, and will dwarf the schenanigans coming to light in the Gomrey enquiry. What is at question is the fundamental basis of Liberal governments of Canada, that being to bribe Quebec to stay.

Either that or the Liberals really want to sweep Gomrey out of the news. Erm...

If Canada reformed and Quebec threatened to leave, would it really threaten the unity of the rest of canada if it did? It seems to me that Canada without Quebec would get along just fine.

Why is it so important to keep Quebec happy even at the expense of not getting to have even a modicum of fairness in disbursement of tax revenues?

[DaShi]

Quebec has always been an irrefutable part of Canada.

[Agathon]

Why is it so important to keep Quebec happy even at the expense of not getting to have even a modicum of fairness in disbursement of tax revenues?

Because Quebec leaving would cause all sorts of problems. The Quebecers don't want to leave anyway. They've had three chances and taken none of them.

[Geronimo]

Originally posted by DaShi
Quebec has always been an irrefutable part of Canada.

and after Quebec left in a huff, that would simply read

"Quebec had always been an irrefutable part of Canada."

Canada has no reason to kick quebec out but it also has no reason to give it any special treatment whatsoever.

To do otherwise seems like a perversion of the very idea of a federation.

[Agathon]

To do otherwise seems like a perversion of the very idea of a federation.

Canada loves perversion. Why else do you think they are letting those filthy, god-hating fags to marry!!1!!1!

[There was a great program on the religious channel tonight, where all the fundie bigots are trying to raise money to stop it]

[Last Conformist]

If I'm getting this right, the federal gov't takes in taxes, divides the money among the provinces, and the provinces provide healthcare with it?

If the same standard of healthcare is to be provided everywhere, why not have the federal gov't run it all? It seems to me the system is stupid mix of centralism and federalism.

[Flubber]

This is an age-old argument-- How do you divide the pie??

A few points


1. I agree with NYE in that there is a disconnect in Canada between the level of government that collects most of the revenue and the level that is charged with providing the bulk of the services. The feds have used the purse to encroach into provincial areas of responsibility throughout the years.

2. Quebec may not be a "poor place" but it has met the definition of a "have-not" province and the day that it does not will probably be very close to the day that equalization ends or gets downgraded a LOT. I just can't see the program continuing without the political clout of Quebec as a recipient. ( Although without transfers to Quebec, the necessary money for the remaining provinces would be a lot less and its pretty obvious that a billion makes a much greater difference to PEI than it does Ontario.

3. While I don't foresee Amerrican tanks in Alberta, one would have to be a fool to think that the US doesn't have a huge interest in ensuring the continuance of Alberta oil and gas into the US. Personally I don't see Alberta separating in the conceivable future . .. WHY ?? a lot of people in Alberta came from somewhere else in Canada and retain ties and family there. Add in the fact that Alberta is affluent and you don't get something that tugs at people to end the status quo. " Let's see, we should separate so we don't have to send money to Nova Scotia so my mom's hospital is somewhere near the standard of an Alberta hospital ??" --- I also don't see any big Albertan identity that would push people and in the end any separation would be largely about money-- I just can't see people breaking up a country over money ( one exception-- if something like the NEP happened again, you might have enough people POed to make for a credible threat but ultimately I don't think it would ever succeed

[Flubber]

Originally posted by Last Conformist
If I'm getting this right, the federal gov't takes in taxes, divides the money among the provinces, and the provinces provide healthcare with it?

If the same standard of healthcare is to be provided everywhere, why not have the federal gov't run it all? It seems to me the system is stupid mix of centralism and federalism.

Constitutional division of powers plus the normal power games of politics.

[Last Conformist]

What's "NEP" in context?

[St Leo]

Originally posted by notyoueither
It's not an invasion if it is invited, laughing boy.

Worked for Hitler. He didn't invade Czechoslovakia. He was invited in by the Czech government because of unrest in Slovakia.

Bush == Hitler. QED.

[St Leo]

Originally posted by Agathon
1. There is, properly speaking, no such thing as "overtaxation".

I'd say that a tax rate of 101% of personal income would qualify for that label.

[St Leo]

Originally posted by notyoueither
People in Ontario are likely to pick up and move to a more beneficial jurisdiction when you screw with them like that.

Our income taxes are so high because our corporate taxes are absurdly low. As long the corporate taxes are low, corporations will stay in Ontario. As long as corporations stay in Ontario, jobs will stay in Ontario. As long as jobs stay in Ontario, people are coerced to stay in Ontario.

[Flubber]

Originally posted by Last Conformist
What's "NEP" in context?

National Energy Program

The federal liberals instituted a federal sweeping program related to energy that in Alberta was widely despised.

Trudeau's NEP still a bitter legacy in Alberta

;By JULIA NECHEFF-- The Canadian Press


EDMONTON (CP) -- As Canada remembers the life and times of former prime minister Pierre Trudeau, many Albertans still can't forget the bitter legacy of his government's national energy program.

In 1980 those three words reverberated through the oil company head offices in the posh glass towers of Calgary, the stately marble corridors of the legislature in Edmonton and the rough-and-tumble drilling fields of rural Alberta.

The three words brought a prosperous province to its knees. A look at the NEP

Here's a look at the controversial national energy program implemented by the Trudeau Liberal government:

Energy: Born on Oct. 28, 1980, as part of the first budget after the Liberals were re-elected in 1980. Abolished after the Tories took power in 1984.

Boom: Introduced in the wake of 160 per cent increase in world oil prices and the prolonged stalemate between Ottawa and Alberta over energy pricing and revenue sharing.

Fuel: Tried to achieve three objectives: oil self-sufficiency as a way to attain energy security; redistribution of wealth towards the federal government and consumers; greater Canadian ownership of the oil industry.

Fire: Wide-ranging set of measures included grants to encourage oil drilling in remote areas; grants for consumers who converted to gas or electric heating; new taxes on the oil industry; expanded role for Crown corporation Petro-Canada; government share of all oil and gas discoveries offshore and in the North.

Fizzle: Policy was based on the expectation that world oil prices would continue to rise indefinitely. When it began to fall in 1982, justification for NEP evaporated and it showed itself to be ill-conceived.

Legacy: Distrust of the federal government by the western provinces, which to a certain extent continues today.



The national energy program, conceived by the former Liberal government led by Trudeau, is still seen as Ottawa's blatant grab of Alberta's energy riches and an intrusion into provincial powers.

It's a pivotal event often cited to explain western alienation and to this day motivates the Alberta government to keep a tight grip on its business.

"The legacy of the NEP was billions of dollars going into the federal coffers at the expense of Albertans," Premier Ralph Klein said Friday, a day after Trudeau died.

Klein credited Trudeau for inspiring his own interest in politics, and cited the elder statesman's role in giving Canada the Charter of Rights and Freedoms.

But Klein also reflected on how Trudeau's energy policy divided East and West.

"If there was any incident that brought about discord, especially in the West, it was that particular issue," Klein said.

"Certainly the NEP made Alberta strong in our resolve to combat the policies of Mr. Trudeau and we remain strong today in terms of protecting our constitutional authority over resource development.

"So I think we are a much stronger province. People in this province say 'Never, ever again will there be another NEP.'"

The Trudeau Liberals brought in the energy program after the two oil price shocks of the 1970s, first in 1973 and then in 1978.

Alberta and Ottawa had already tangled in the so-called energy wars of the 1970s when the two governments feuded over energy pricing and revenue sharing.

The NEP, a complicated set of economic measures, kept the domestic price of oil below the world price. It was intended to protect Canadian consumers and the manufacturing heartland in Central Canada from the high energy prices of the time.

Ottawa also wanted a piece of the pie and for Canada to achieve energy security by increasing its oil self-sufficiency.

The feds encouraged resource exploration in frontier regions such as the Beaufort Sea by giving out special grants. They took a 25 per cent share of all oil and gas discoveries on federal lands, even retroactively.

The overall effect was to bring resource activity in Alberta almost to a halt. Western Canada became a less attractive place to invest. Provincial revenue was siphoned east.

Times got very tough, recalls Jim Gray, president of Calgary-based Canadian Hunter Exploration Ltd. The national energy program destroyed the oilpatch, he said.

"I've had people who lost jobs and it affected families and there were social implications in terms of the tension and stresses and that sort of thing," Gray said.

"And it all focused on one man. It was Pierre Elliott Trudeau."

The energy program followed a long history of economic alienation -- railway rates, monetary and other policies that worked to the advantage of Central Canada directly against the interests of the West, said Robert Mansell, head of the economics department at the University of Calgary.

Coming on top of all of these, the NEP "convinced most, I would say the majority of people in Alberta, that you couldn't trust the federal government and they were bound and determined to drive the economy into the ground," Mansell said.

"It would take many, many generations for that (mistrust) to disappear. It hasn't yet."

Gray echoed Mansell's comments. "I've got young people out here in our company who are still mad about the NEP but they don't know what the NEP's about," he said.

Peter Dyne, now chairman of the energy committee for the Consumers Association of Canada, worked in the federal Energy Department at the time the energy program was brought in.

"The original NEP document had very strong words in it," said Dyne. "It had a strong political driving force that big oil was the enemy and that Canada had to protect itself somehow from the interest of big oil."

Even today, you don't have to go far to find fear and loathing against the NEP in the oilpatch, especially now that Alberta is once again enjoying a boom brought on by high oil prices.

Every time there's any talk of bringing in an environmental tax on energy -- the so-called carbon tax -- Mansell said oil executives fear it's going to be the NEP all over again.

"People still talk about waiting for the other shoe to drop," he said.

The general conclusion of most economists, and not just in Alberta, is that the NEP "was unwise and didn't work and quite negative in its consequences," said Ted Chambers, of the Western Centre for Economic Research, based at the University of Alberta.

It didn't help that the early 1980s were also a time of sky-high interest rates that reached 20 per cent and inflation rates of up to 13 per cent. The poor economic conditions would plunge the entire country into a major recession in 1981-82.

Chambers suggested the general recession also contributed greatly to Alberta's misfortunes, and that Trudeau's government shouldn't have to shoulder all the blame.

However, Mansell maintained that if it wasn't for the NEP, Alberta would have experienced a mild recession instead of widespread misery.

"This is a period when people were walking away from their homes, they lost their jobs, couldn't pay the mortgage with high interest rates," said Mansell.

"The oil industry packed up. Resource development ground to a halt, drilling -- all those things that would be important in continuing the prosperity based on resource development came to an end."

The idea behind the NEP for consumers was that because Canada produced a significant amount of oil, it was possible somehow to control the price, said Dyne.

"At the time it was introduced, we had already gone through the first energy crisis with OPEC appearing and jacking the prices up from $4 a barrel to $10 barrel, which at that time was the end of the world," he said.

"The world has changed a lot. The main difference for consumers is today we have to realize we're part of the world economy and you can't have a Made In Canada price."

[DanS]

I don't think the US would send tanks Alberta's way. Alberta might be able to join on a similar basis to what Texas did.

In any event, we have redistribution as well. It's just done differently and makes slightly more sense than the Canadian system, in that separatism was dealt with in another manner.

[Kuciwalker]

Originally posted by Agathon

Why is it so important to keep Quebec happy even at the expense of not getting to have even a modicum of fairness in disbursement of tax revenues?

Because Quebec leaving would cause all sorts of problems. The Quebecers don't want to leave anyway. They've had three chances and taken none of them.

Then what is this serious separatist threat?