Published in the Telegraph-Journal 31st January 2012
Members of Parliament have descended on Ottawa to begin a session that promises to create a new play book on relations between the federal and provincial governments. A federal action blueprint that is emerging is one of the most activist and aggressive in recent years. A number of issues will define this relationship for the foreseeable future.
Not all federal government objectives will be achieved. Finance Minister Jim Flaherty recently praised the federal government’s response to the global financial crisis, highlighting the resilience of Canada’s financial system.
“The actions taken by our Government have strengthened this system and prepared it to better face the challenges of an evolving financial world,” said Flaherty. But his ambitious plan to bring securities regulation under national control was turned back by the Supreme Court. The provinces continue to have authority over a regulatory framework that Flaherty characterized as unwieldy and inefficient.
But a distinct agenda is beginning to emerge in almost every other area of federal responsibility.
In health care, Prime Minister Harper has drawn a line in the sand, claiming that the federal government will not enter into discussions with the provinces over how to reform the health care system. Rather than draw up a new accord, the Prime Minister has frustrated the provinces through an announcement for future federal health care funding that simply articulated the federal government’s position regardless of provincial objections. The provinces will simply have to adapt.
President Obama’s decision to postpone the proposed Keystone XL pipeline has highlighted ideological divisions both in the U.S. and Canada. Harper has said that his government’s priority is to find other markets, such as China. But it is far more likely that another proposal – Keystone II – will be filed in the U.S. A post-election proposal is far more likely to achieve needed American support, especially if a slightly different route is put forward bypassing the environmentally sensitive Nebraska Sandhills.
Of course, there is no guarantee that any Keystone proposal will be approved after the elections. The pipeline still stands to be fiercely opposed by a range of environmental groups, who will continue to treat the pipeline project – in any form – as a symbolic test of Obama’s commitment to clean energy.
But what is more significant than the pipeline itself revolves around statements issued by the Prime Minister and Natural Resources Minister Joe Oliver that the federal government was seeking ways to avoid foreign-backed outsiders from obstructing the environmental hearings. This signals a deliberate process to decouple environmental reviews from the economic objectives of proposals and makes it far more likely that the federal government will simply impose timelines on any discussions involving environmental risks. There now has appeared two columns in the economic development ledger –economic benefits and the environmental costs that will endanger growth.
The Harper government may have demand on its side in the near term. Although there has been much criticism of how tar sands oil is environmentally incorrect, global demand for energy is predicted to rise at an accelerating pace over the next 20 years. Even though there is a recognition that the focus needs to shift to eventually boosting energy productivity, Canada possesses the energy needed to help power the American economy immediately. This reality places the Conservative government firmly in the driver’s seat and makes it more likely that energy strength will support the Harper agenda in the near term.
In its upcoming budget, the federal government has promised to present a fiscal blueprint containing major cuts to federal programs. Treasury Board President Tony Clement has committed to slashing annual spending by as much as $8 billion. Many elements of this budget will have an impact on provincial capability. And more than ever, the provinces will need to ensure that they are not on the outside looking in.