Friday, 9 March 2012

Equalization – The Number Games

Suzanne Collins’ wildly popular series The Hunger Games exposes readers to a futuristic narrative of a dystopian society that revolves around a spectator fight till death sport between adolescents. Many older people may already recognize the narrative vein from the Greek legend of Theseus (which the novel is loosely based on) or the Japanese cult flick Battle Royale. The book is another example of a vehicle in the North American cultural landscape through which it is possible vicariously live out merciless Darwinian fantasies, virtuous expressions in our lexicon notwithstanding (“To err is human, to forgive is divine” “Anger begets anger and Violence begets violence”). Ms. Collins, of course, did nothing other than pick up a pen and create an imaginary world; in the real world, the NHL, NFL, and UFC defend brutality as a necessary evil, a free market demand to which the leagues are nothing more than the willing purveyors of supply. The NHL cannot defend fighting with any sound, reasoned arguments and it has no reason at all for not banning the hard plastic equipment that is a major factor is causing hundreds of concussions a year, but the status quo goes on. The league prefers to infer an unspoken “honour” code that feeds into the same cruel logic as Collins’ novel. Dave Andreychuk said as much on TSN the other day when asked by Michael Landsberg if he was surprised by an illegal bounty program the NFL’s New Orleans Saints are accused of running on opposing players, or had witnessed anything similar during his NHL career. He said that he understood perfectly from his own experience that guys would do whatever it takes to win.

700 players for one Stanley Cup. Two guys in a cage for one victory. We are participants in our own culture’s spectacles governed by loosely defined rules and ambiguous limits. We provide a scarce prize and force opponents to do battle, within “rules” of course, but within a margin of error that, like our society’s laws, allows for a great deal of morally questionable activity to still occur. Hence the “whatever it takes”, which makes no mention of respecting rules. Of course professional sports does not cross the threshold into the dystopian thriller/Roman gladiator frontier as players are not trying to take each other’s lives and are playing for seven figures, not survival. But career-ending injuries are a risk, and a frequent enough occurrence.

The adversarial nature of Canadian interprovincial and federal-provincial relations is a battle/turf war which is more subtle and nuanced than the ones described above but ultimately falls in the same Darwinian zero-sum game. There is a limited amount of power in the country to go around, areas that different levels of government consider their prerogative, and jockeying for dominance and influence. This is covered by the media in the same way as sports. Canada is not big enough for everybody; true pan-nationalists who feel a deep love for their country from coast to coast almost certainly have a vision of it coloured by their particular province or region which would alienate other Canadians once they started to elucidate it.

It would astound an outsider how un-united Canada is, and I’m not talking about a couple of referendum dustups. John Macfarlane lamented as much in this month’s Walrus editorial when he talked about the country’s inability to form a national securities commission. I’m studying pension legislation and that is another big story of provinces refusing to come to a common agreement to harmonize their regulations. Anything in this country that isn’t directly controlled by the federal government – anything besides mail, airlines, currency and banking, the military, shipping and railroads, and that’s a lot of things – inspires zero cooperation among the provinces. Why would any duly elected provincial premier or well-paid provincial board want to cede its little fiefdom to outsiders?

The federal government still does control a great deal, however, and capturing it is a big prize, currently held by Western Canada. Commentators in this country have no way of describing this situation other than the spectator sport-zero sum game terms. So John Ibbitson, Chantal Hébert, John Ivison – take your pick of national affairs columnists, they all agree – the West is “in” and “winning” and the East is “out” and “losing”. The easiest way to explain the composition of the country now is to look at the current situation of its best Western hockey team – the Vancouver Canucks – who are an elite, well-oiled contender, while two big market Eastern teams, the Leafs and the Canadiens, are stumbling, sputtering, mismanaged non-playoff messes. The “balance of power” and “centre of gravity” have shifted, which means (even though the provinces are still in charge of what they were before and the dynamics of power as such have not substantially changed) the West has an opportunity to steer the country and dictate its future direction on its own terms. The subtext is that the East is going to have to fall in line with the West’s priorities and its values.

A line of thought has been solidified by the recent change in the balance of power, which is that Quebec gets an unfair sweetheart deal through the receipt of equalization payments and that there will be no motivation to continue this arrangement now that the country’s power base is Calgary and not Toronto/Ottawa. In plain speaking, and Alberta’s premier recently said as much, there is no reason Alberta should continue to write cheques from its oil revenue to Quebec to subsidize Quebec’s cheap tuition and day care. Makes perfect sense, except when you visit the equalization website.

It turns out that the federal government disburses 15.4 billion dollars annually in a complex formula that allows each province to offer its residents relatively comparable social services and keep at least 50% of its resource revenues. Alberta and Saskatchewan both received equalization for decades (in fact, Alberta remains the only province with the distinction to have defaulted on its debt, in 1935). Quebec is the most visible recipient of the program because it gets the biggest slice of that 15.4 billion payment, 7.4 billion. But Ontario receives almost 4 billion and yet as a province contributes 12.4 billion more in taxes to the Federal treasury than it gets back in benefits. Ontario provides 38% of Canada’s GDP and Quebec 20%, which is roughly in line with their populations. But I’m not here to justify their receipt of equalization payments. I’ve said for a long time that for the Canadian federation to stop being dysfunctional and regional grievances ended, the equalization program should be abolished and with it the fed’s taxing powers sharply reined in. I just think it’s interesting that the phenomenon of equalization has crystallized in the Canadian Public consciousness as a direct conduit from the oil sands to Quebec when in fact it is the lowest per capita recipient of the program:

Quebec – 7.4 billion dollars – 8 million people = $925 per resident

Manitoba – 1.67 billion dollars – 1.15 million people = $1,452 per resident

Nova Scotia – 1.29 billion dollars – 922,000 people = $1,375 per resident

New Brunswick – 1.5 billion dollars – 750,000 people = $2,000 per resident

And rounding out our list of “have-nots” is Prince Edward Island, which receives a whopping $337 million dollars in Federal Aid for just 137,000 people. That equals $2,459 per resident on an island where 66% of residents are already employed in the public sector in some capacity!

It’s interesting how in the fierce fight for equalization dollars, Quebec has been the object of attack and scorn for so long while four other provinces receive a third to 2.5 times more aid. Is it because there are no hard feelings between “fellow Canadians”, which Quebecois are not really considered as? Or is it just plain racist? The Department of Finance, after all, does not go out of its way to break it down the way I have, which might combat the perception that the French Infant is sucking on the Nine Province English Mama’s teat. When have you ever read about NS, NB or Manitoba being “spoiled”, “entitled”, “ungrateful” etc. I find it ironic that Manitoba – yes, Manitoba, the province that lost the aerospace contract to Quebec in the 1980s that resulted in the birth of the Reform movement and its slogan “the west wants in” – receives equalization dollars. This province, whose population and economic growth are humming along just fine with an NDP government, attracts no wrath from other western provinces. Maybe because it is a western province, it can be forgiven for receiving government money that it probably doesn’t really need. I don’t have a bone to pick with Manitoba or anybody else. But we already know from the Ontario example that there’s no real rhyme or reason to this plan – other than allowing provinces to mismanage their finances and the federal government to play Santa.

Even though it says on the government website -

“Equalization payments are unconditional – receiving provinces are free to spend the funds according to their own priorities.”

The provinces not receiving funds from the program clearly feel that the resources are scarce and must be ideologically battled over. As public finances and resources decline, the fight could turn a lot nastier than the disgruntled minds contenting themselves with seething and chiding right now.

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