Another Trudeau plan provinces will pay for
Canada’s provincial premiers must occasionally pine for the good old days of Stephen Harper, when the prime minister semi- politely ignored them, refusing to attend their group get- togethers or even occasionally to return their calls.
When the Liberals came to power, Prime Minister Justin Trudeau promised a warmer relationship, with mutual respect and displays of good fellowship. As with numerous other Liberal vows, it hasn’t quite worked out as anticipated. On health care, climate change, marijuana legalization and, most recently, the Liberal “national housing strategy,” the premiers have discovered that Ottawa gets the glory, and they get the costs.
The housing plan was rolled out with great fanfare, pledging $40 billion over 10 years to build new housing units, repair old ones, reduce homelessness and safeguard families from losing their homes.
“Even one Canadian sleeping in the street is one too many,” Trudeau declared. “Housing rights are human rights, everyone deserves a safe and affordable place to call home.”
Apart from the addition of yet another right to the swelling list of things Canadians are told are theirs by birth, the premiers are worried about more practical matters. The plan’s ambitious budget presumes they will happily kick in billions of dollars to make the program come true. Much of the federal share consists of previously- announced programs, while the “new” money only gets spent if the provinces agree to share at least $ 12 billion worth of costs.
The difficulties this entails became evident when Ontario and Quebec, with 60 per cent of the national population, conspicuously refrained from pledging their share. Ontario Housing Minister Peter Milczyn thought the plan was a great idea, but wouldn’t promise the required billions. And anyone who thinks Quebec is going to be told by Ottawa how to spend its money hasn’t been paying attention to the past 50 years.
It may be that the prime minister needs an update on provincial budget challenges. Quebec’s Liberals face an election in 2018, and after years of budget restraint have managed to produce a surplus, which Finance Minister Carlos Leitão isn’t about to hand over to Ottawa. Instead, last week he announced a tax cut for low- income families and an increased subsidy for school supplies.
Ontario’s Liberals must go to the polls by June. Premier Kathleen Wynne’s government claims to have balanced the budget after years of heavy borrowing, and is counting heavily on that appearance of fiscal competence to attract votes. To support its claim it was forced to hide $26 billion in new borrowing by running it through Ontario Power Generation to keep it off provincial books, a strategy Auditor General Bonnie Lysyk condemned as “needlessly complex” and introduced solely “to avoid showing a deficit or an increase in net debt.”
In Alberta, Premier Rachel Notley has pushed the province deep into debt and badly needs to show some improvement in the face of a stiff challenge from the newly formed United Conservative Party. Neither Saskatchewan nor Manitoba, both under conservative governments, are likely to be eager to contribute to a Liberal plan that is only the latest call on their strained finances.
The housing proposal came as the provinces were still steaming over a federal plan for a 50-50 split of marijuana revenue, which they quickly dismissed on the basis that the costs of introducing, implementing, policing and regulating legal pot sales will fall overwhelmingly on them. They’ve asked more than once for the July 1, 2018 legalization date be postponed to allow more preparation, only to have Trudeau refuse, as the Liberals want pot problems off the agenda before they face re-election.
The premiers got a similar cold shoulder last year, almost immediately after the Trudeau government came to power and revealed there would be no substantial change to a health care funding regime introduced by the Harper Tories. The premiers expected a big boost, along the lines of a six per cent annual increase they’d become accustomed to, only to be told that Finance Minister Bill Morneau would stick to a Conservative proposal for about half that amount.
Similarly, Ottawa’s national carbon tax proved to consist largely of Ottawa setting standards while demanding the provinces find ways to meet them. The Conference Board of Canada estimated the plan would cut the economy by about $ 3 billion, while Saskatchewan Premier Brad Wall denounced it as “a ransom note” and pledged to challenge it. Manitoba Premier Brian Pallister said he would ignore Ottawa and introduce a less-costly “made in Manitoba” alternative.
It might seem peculiar that, in the face of so much provincial opposition, Trudeau’s government would unveil yet another initiative dependent on money and cooperation from recalcitrant and over-stretched premiers. Just last week, Alberta’s Notley travelled to Ottawa to demand Trudeau show more leadership on the pipeline project that is so crucial to her province. To be told Ottawa would prefer to siphon more money from the province — at a time Notley’s opponents are already raising a stink about Alberta’s share of the federal equalization program — must leave the impression people in Ottawa need to get out more.
Or perhaps Trudeau’s Liberals just can’t resist the boost they get from splashy announcements, and figure Canadians don’t notice when the follow- up comes in well short of expectations. Voters with limited attention spans get governments with shortterm agendas and poorly thought-out programs.
Trudeau demonstrated that when he revealed that most of the housing money won’t be spent until after the next election, because there are too many details still be to be settled. So why stage a big roll- out now, other than for a quick headline?