Linda McQuaig makes an important point in her column that high tuition fees for university students are a question of dogma, and not a necessity imposed by the global economy. She cites the example of Norway where tuition is free and students receive a stipend to cover living expenses. She mentions the good fortune of Norway to have “ample oil reserves — almost as blessed as Canada.”

The paradox is that Norway does not use the benefits of its oil reserves to fund the costs of government and of social programs, including education. Norway, like Alberta, has created a Heritage Fund to benefit future generations when the oil dries up, but the comparison ends there.

Norway’s fund, created in 1990 with a contribution of $400 million, is now valued at $573 billion. Alberta’s, created in 1976 with an initial contribution of $1.5 billion, has a puny $15.4 billion. Norway, unlike Alberta, invests its oil profits off shore to avoid the “Dutch disease”: short-term boom, high wage pressure and over-valued currency. Thanks to Alberta, it has become a Canadian disease.

The Norwegian government, with citizen support, has decided to fund its social programs with high levels of taxation. At the same time, as McQuaig indicates, Norway manages “to compete effectively in the global economy.”

Norway, using proportional representation and electing large numbers of women, has good forward-looking government. Canada does not. Norwegian students and citizens benefit, Canadians do not.

Larry French, Toronto

< http://www.thestar.com/opinion/letters/article/1175845–norway-using-oil-money-wisely >

Hennessy’s Index is a monthly listing of numbers, written by the CCPA’s Trish Hennessy, about Canada and its place in the world. For other months, visit:http://policyalternatives.ca/index

• 31%

  That’s how much of Canada’s economy is made up of income, sales, corporate, property and other taxes we pay to all levels of government. (Source)

• $38 billion

  That’s how much less Canadians now pay in individual income tax compared to 2000. (Source)

• $19 billion

  That’s how much less Canadians pay now in sales taxes compared to 2000. Since the Harper government cut the GST by two points in 2007, the average annual revenue loss to the treasury is about $12 billion. (Source 1, 2)

• $18 billion

  That’s how much less corporations pay now in Canadian taxes compared to 2000. (Source)

• $11,747

  Total income tax a person with an annual income of $50,000 will pay in Quebec for 2011, the highest regional amount in Canada.  (Source)

• $8,349

  Total income tax that same person would pay in Nunavut, the lowest regional amount in Canada. (Source)

• $41,000

  Average amount middle-income Canadian families enjoy in public services that their taxes fund. It’s worth about 63% of their income.  (Source)

• 64%

  That’s how many Canadians are willing to pay slightly higher taxes to protect our social programs. (Source)

• 60%

  That’s how many Canadians say they’d be more likely to support a political party willing to raise taxes on the rich. (Source)

• 2%

  Tax hike for Canadians making between $170,000 and $640,000 that a new organization, Doctors for Fair Taxation, recommend federal and provincial governments adopt.  (Source)

• 2%

  Extra taxes Ontarians earning $500,000 or more will pay due to a temporary surtax. It affects about 23,000 people who will pay, on average, about $19,000 more in taxes. (Source)

• 49.5%

  Ontario’s marginal tax rate once the new tax hike on the highest income earners kicks in. In the 1950s, the ’60s and early ’70s the marginal tax rate (including federal and provincial) for this income range was 80 per cent. (Source 1, 2)

• 75%

  Percent of taxes France’s Socialist Party candidate François Hollande proposes to levy on millionaires in that country. (Source)

  < http://www.policyalternatives.ca/publications/commentary/taxing-times >

In February, Statistics Canada made access to most of its data free, eliminating the previous charge of $3 plus HST for every series. For example, if you wanted employment data for B.C. and Canada from 1980 through 2012, it would have cost $6.72; if you also wanted full-time employment data, the bill would have increased.

Complicated work involving interprovincial comparisons meant spending hundreds of dollars for data.

The change now makes it possible for anyone to fact-check many political claims. To demonstrate how easy it is to access and use this free data, a good start is to watch the five minute CANSIM tutorial.

Let’s say you are interested in checking claims about job creation.

Clicking on the top level Statistics Canada website and scrolling down reveals a box with “latest indicators.” Clicking on unemployment rate brings up the latest release of the Labour Force Survey (LFS). Scrolling down reveals a list of CANSIM tables for the LFS. It takes some digging, but going through the tables shows seasonally adjusted data in Table 282-0087.

From there, it is a matter of following the steps outlined in the CANSIM tutorial to select seasonally adjusted data for B.C. It is important to select data in small bites because clicking on “select all” produces too much data to easily download and handle.

The graph shown at the top of this article was created by selecting just B.C. as the province, total employment, both sexes, 15 years and over, seasonally adjusted, January 1991 through February 2012 and time as rows. After clicking “apply” and “download” the data are easily imported into a spreadsheet for creating the graph. Notice it shows growth for most of the past 22 years, with the exception of the 2001 and 2008-2009 recessions.

Most of what you hear about jobs in the 1990s compared to the last decade is political spin. You can also replicate the work of the BC Progress Board and see that relative to other provinces, B.C.’s job performance ranked fourth or fifth for most of the ’90s, as it did for the last decade, although B.C.’s performance dropped to seventh in 2010.

Explore your inner geek

The challenging part of using CANSIM to do your own fact-checking is it takes some familiarity with the data. Journalist Andrew Coyne illustrated that point recently when he tweeted that the Statistics Canada website was difficult to use because he couldn’t find quarterly GDP data for Ontario. Those familiar with the data were able to tell him provincial GDP data are only produced on an annual basis; one way of finding this data is to search CANSIM on the term “provincial economic accounts.”

Coyne was searching for something that has never existed. Keep that in mind when you hear claims about B.C.’s economic performance. Many of the claims are impossible to verify, because there are no data. Knowing that is important because it allows those who make claims to be challenged. Now that access to the 43 million data series on CANSIM is free, when claims are made, ask for the CANSIM table number that can be used to fact-check.

David Schreck is a political analyst and former NDP MLA who publishes the website Strategic Thoughts,, where a version of this article first appeared.

< http://thetyee.ca/Opinion/2012/04/02/Fix-Political-Spin/index.html >

< TotalEmploymentgraph600px.jpg >

If you ask me, what the fundamental difference between a liberal and a conservative is in this day and age, I would suggest that the liberal and conservative differ over the individual’s relation to society. This is an old distinction, and no doubt you’ve heard it before. But it’s still a useful distinction to make.

Let’s begin with the contemporary or neoconservative position, from which we shall depart to consider historical and geographical variations. Margaret Thatcher said that there is no such thing as society; there are only individuals. At its simplest, this assertion tells us society is an abstraction. There is no concrete object to which a person may point and say, “there is society.” To speak of society, in other words, is to speak of something that exists only in the mind. Society is a mental construct. Thatcher, however, was not interested in philosophical matters. Her statement reflects a fundamental and practical current conservative principle, that the basis of the good society is the good behaviour of the individual.

For the conservative, society is the word we apply to aggregated individuals. From this follows certain conclusions. The acts of government ought to be limited in such a manner that the individual is free. Conservatives want to remove limitations on free, responsible and productive citizens. To achieve this end, certain preconditions are necessary. There must be stability and order, so that the individual is protected from the harmful actions of others; this calls forth the rule of law. The rule of law, set forth and enforced by the state, must be as extensive as is necessary for order, and as limited as necessary for responsible individual freedom. Law-bound individual freedom and responsibility constitute the basis of a conservative society. The end of conservative political philosophy is the free, but responsible individual.

Conservatives have tended to approach the public good through the back door of pessimism. The English philosopher Thomas Hobbes, in his political treatise Leviathan, put the conservative case for the rule of law nicely. He argued that people are by nature selfish and acquisitive and that unless law constrains them, they will engage in “a war of all against all,” each person struggling against all others for personal advantage. His chief concern was that acquisitiveness would lead, in a lawless society, to theft of private property. And indeed, for both liberals and conservatives, one of the chief purposes of the state is to protect property rights. But for now, we should note that the basic fact of life for Hobbes was that it is, in its natural state, “nasty, brutish and short.”

The good society, which for many conservatives means above all else a lawful and orderly one, must overcome human nature with force, or the threat of force. Conservatives, in other words, have a rather pessimistic view of human nature and the potential of human beings to evolve. Thus, the conservative does not speak so much of “social problems” as of individual crimes and failures of character. The conservative may prefer to treat homelessness as a criminal matter and urge the passing of laws to clean the streets of undesirable people. Poverty may be seen as a failure of the individual, in which case the solution is to provide incentives and disincentives to the poor. The good society comes about when the individual obeys the law, acts responsibly and takes advantage of the system’s incentives. Conservative government is limited in its scope to securing the optimal conditions for individual advancement, and the individual is limited only by the rule of law and by economic incentives and disincentives. Conservatism is the philosophy of conservation, in the sense that it regards the natural world as static: Human nature does not change, and neither do the basic laws of society and economics. This does not constitute a denial of the need for reform; rather, reform is seen as a gradual accommodation of changing social conditions to fundamental economic laws. The best of all possible worlds will come about not because of reform, per se, but because individuals act freely within the channels established by law and convention.

Some of what I have said needs clarification, for the conservatism I am describing is an abstraction. We may distinguish between many particular kinds of conservatism — for instance, contemporary American and classical British conservatism. There are variations both of geography and history, and even within a specific time and place, we should expect a diversity of thought. The progressive conservatism of Benjamin Disraeli and the social Darwinism of Charles Sumner are both placed under the heading “conservative.” Yet, in many ways, these philosophies are at odds. Furthermore, classical British conservatism is closer in many ways to modern American liberalism than it is to British neoconservatism. Classical British conservatism tended toward a collectivist view of society and perceived individualism as a challenge to the “social contract.” In general, however, conservatism is the ideology of natural law, and its prescription for the public good is the strong interventionist state, at least where individual moral conduct is concerned.

Classical British and American liberals, unlike their modern counterparts, were the advocates of “laissez-faire” economics, that is, the theory that individuals ought to be left alone in their market dealings. This is usually thought of today as a conservative position, but it was not originally so. Classical liberalism and laissez-faire economics were based upon a profound mistrust of the state: Liberals felt the state, if left unchecked, would lead to autocracy. The British liberals who established the United States of America opposed the absolute powers of the monarch, as well as the exploitative arrangements of mercantilism. Instead, the founding fathers sought ti create a constitutional government with limited democratic representation.

We should note, however, that not all classical liberals were democrats, and that none of them proposed universal suffrage. For many, representative democracy meant that owners of property (that is, the white, male bourgeoisie) and not the nobility should be in charge. In some limited ways, liberals and conservatives have switched positions on the question of state intervention, and this exchange tells us important things about the respective ideologies. Laissez-faire meant something different to the market-anarchist Adam Smith, than it does to the contemporary corporate CEO who calls for wholesale deregulation. Unfortunately, our technical terms have not kept up with historical changes. I shall return to the matter of these changes a bit later. Right now, I shall try to articulate the liberal principles which have evolved over time.

We begin with the classical liberal view that human nature is contextual — that it evolves over time. The liberal may not even believe in human nature as such, but may argue that people will behave differently in differing contexts. In short, human nature is culture; it is a social creation. This explains the liberal interest in social reform. Liberals often see crime, for instance, as social in nature, by which they mean to say that the individual is not the sole cause of his or her behaviour. The root of crime is felt to be the prevailing social conditions, and social reform is typically the proposed solution. Imprison all the criminals you wish, the liberal will say, and you will still have crime and criminals, as long as the social conditions that are responsible for these behaviours are maintained.

Indeed, the penal system shall only make crime worse (prison is simply another culture informing, or misinforming, the indivdual). The source of the crime is external to the individual. The liberal would likely regard Hobbes’ description of savage nature, and the theory of the state to which it leads, as inappropriate to the modern society. Classical liberals and conservatives disagreed, not only about the use of state power, but over the punitive functions of the state as well. Capital punishment was seen as especially repugnant by liberals, because it gave to the state the ultimate right: To choose who lives and who dies. The liberal view of capital punishment was based upon a mistrust of the state, in combination with an optimistic approach to the good society, which claimed that social reform is a better means of achieving harmony, than punishment or threats of punishment.

You’ll recall that I have set two matters aside for later comment. The first was the observation that conservatives (and often liberals) argue that one of the chief purposes of the state is to protect the property rights. The second was the observation that, in some limited ways, liberals and conservatives have traded positions on the matter of government intervention. I claimed that this exchange — which I shall substantiate — tells us important things about the respective ideologies. I shall now say what I mean by all this.

The rights of private property are thought to be important for a number of reasons. Plunder is not consistent with the good society. There must be some means by which to prevent, or at least discourage, robbery and other forms of injustice. In the absence of such means, we would likely see the war of all against all described by Hobbes. Without state protection of private property, the economic system would be sustained only by the private use of force. This was indeed the case before the emergence of the constitutional state. The rich hired private armies to protect their economic privileges. Later, the owners of private property (who came to be called capitalists) found it advantageous to exchange their private armies for state armies. They lost private control of their soldiers, but were able to pass the costs of maintaining an army along to the state. The result was that the costs of protecting private property could be broadly distributed among the social classes; they would no longer be confined to the capitalist class. Security of private property rights gave investors the confidence they needed to conduct business activity. Again, without state-supported private property rights, either private provisions for these rights must be made, or else the capitalist economic system must collapse. From this fact emerged the capitalist state.

The preceding paragraph establishes the terrain on which liberals and conservatives have both agreed and fought many battles. Some classical British conservatives argued that private property carried with it, not only privileges, but responsibilities as well. Their ideology was rooted in the “organic” conception of society — the view that society was an organism in which all parts depended upon one another for their survival. This view balanced (at least in theory) privileges and responsibilities. Classical British conservatism was paternalistic — it regarded individuals as bound to one another in the manner of a family. Corporeal metaphors were also common; hence, the nation was like a body and the King was like the head of that body. Classical conservatives did not challenge the authority of the head of the family, but neither did they believe that the strong could use their strength in any manner whatsoever.

Classical conservatism was profoundly moral, profoundly rooted in the idea of a natural moral law. We may note in passing that contemporary conservatives tend to have kept the classical notion of a natural moral order, while discarding or underemphasizing the classical belief in the organic society; in other words, they have privatized natural law. Classical liberals, as we have seen, rejected not only natural law — they believed law is rational and created by man — but the paternal model of social relations as well. Their hatred of the monarchy led them to reject the “strong state.” The paternalistic state seemed to the classical liberal synonymous with tyranny. The conflict between classical liberals and classical conservatives was thus over the nature and responsibilities of the state, at the heart of which stood the individual. Both argued in a specific manner for limited government, and yet there was disagreement over the character of the ideal state.

I now return to historical change. The social and economic influence of the modern industrial corporation had been anticipated both by classical liberals and conservatives, yet it is largely this development that led to the modernization of these ideologies. Liberals had always argued that government must be kept as limited as possible to leave larger scope for the individual. Conservatives, however, felt that the state had a responsibility to keep human nature in check, especially when it threatened the propertied minority. Even today, conservatives call for less government and more state power: More police, more military expenditure, tougher laws and more prisons. In other words, classical conservatives were the supporters of the activist state and classical liberals were opponents of big, tyrannical government. (By the middle of the 20th century this had reversed somewhat, as liberals called for an interventionist foreign policy and conservatives argued the isolationist position.)

Gradually, however, the capitalist economic system produced considerable concentrations of private wealth and economic power. This was defended by the social Darwinists, who saw wealth as an expression of moral and biological superiority. For classical liberals, however, the notion of unimpeded individuals meeting face to face in the free market to compete with one another as buyers and as sellers was becoming outmoded. Classical liberals, such as Thomas Jefferson, had been deeply suspicious of corporations and believed they would distort the economic system and make a mockery of democracy. Jefferson considered the private business corporation as an aristocratic instrument, a way of establishing and extending private privilege at the public’s expense.

The economic man of classical theory was now forced to contend with the economic corporation of modern reality, both as a buyer of goods and as a seller of labour. In this exchange, the corporation could exercise many unfair advantages. The transformation took many decades, but by the middle of the 20th century many liberals had abandoned laissez-faire economics, in favour of a limited activist state. They reasoned that since the conditions of the economy had changed, the conditions of government must change as well. The New Deal was essentially a conservative impulse, being an attempt to keep the capitalist economic system from collapsing. Government was called upon to restore balance and health to the economy. Notice, however, that the state has also been used by liberals to protect the individual from the potentially tyrannical power of the private corporations.

Conservatives took a differing course during the development of the private corporation. Generally, they were supportive of the judicial decisions that constituted private corporations as legal persons. Three strains of conservative thought informed this support. The first was the conservative faith in the rule of law, the second was the idea that special responsibilities are conferred upon the powerful, and the third was that the idea that the economy is grounded by the law-abiding individual. Conservatives advocated the entrenchment of property rights in law, as a necessary precondition to economic development, and they furthermore assumed that from these rights would follow responsibility. The same laws that constrained the citizen would constrain the investor. Corporate laws were unnecessary, since the corporation, like society, did not exist; the corporation was only an abstracted manner of speaking about individuals engaged together in a co-ordinated business effort. The incentives and disincentives necessary to guide the corporation were already in place at the level of the individual economic agent. This was enough assurance for most conservatives.

Liberals may agree that society is a fiction, a thing invented, without conceding the conservative position that it does not exist. The point for them is that it is a practical fiction. Consider public investment. An individual citizen cannot alone cause a highway to be built, but a society can. Government is the instrument by which individual contributions are mobilized in the service of social ends. While it is true that society is an abstraction, it is not the case that it is merely the sum of its parts. We shall discover the same if we regard the private corporation. Here also we find an institution designed to mobilize resources toward a collective end. Not only is the private corporation not the sum of its parts, it is designed not to be and derives its utility precisely from this fact. The corporation is an autonomous instrument, in the sense that it supersedes its constituent individuals; it is a legal fiction endowed with certain rights and privileges, including immortality. Indeed, the corporation came into being as a way to obviate the legal, economic and social limitations faced by the individual investor. In this sense, a corporation does for capital what a union does for labour. Both would be quite pointless inventions if they were only a collection of individuals and not a legal fiction endowed with special properties. And the same, liberals argue, is true of social institutions and the society that it serves. Society is more than the sum of the individuals from which it is abstracted, and only with the broad view that the concept of society offers can grand projects in the public interest be launched.

Well, a conservative may say, that’s precisely the problem with society. Modern liberalism is based on the false assumption that things can be made better with a little manipulation at the top — a little more government intervention. Conservatives prefer to let individuals manage reform themselves, by creating the conditions in which they can exercise their law-abiding freedoms. In practice, this means state intervention in order to present the individual with incentives and disincentives. Conservatives do not accept the proposition that society (or racism, sexism, exploitation, structural poverty and so on) is to blame for dysfunctional behaviour. They admit certain disadvantages, such as physical and mental disability. But beyond this, they place sole responsibility on the individual for his or her fate. Liberals, conservatives may argue, are wrong on a number of points, but these especially: They are wrong about people being victims of society, they are wrong about human nature and because of this, they are wrong about reform.

As in the past, there is a continued disagreement about the role and nature of government. Liberals insist that government is often in the pocket of the capitalist class, and conservatives insist that government is (in the words of the 1995 Common Sense Revolution website) “a captive to big special interests,” meaning people on welfare, the homeless, feminists and unions. It is interesting to note that both sides are engaged in a battle on behalf of social and economic justice. For one side, justice means advancing the rights of people of colour. For the other, it means income tax cuts. We should note that both sides feel the injustice deeply; neither is, I think, insincere.

Contemporary government is complex enough that both sides can support their case. When we talk about the government, we are talking about a motley collection of interrelated, but also contesting, arrangements. One part of government saves the taxpayer money by firing staff or causing others to, and another promptly spends that taxpayer money helping these folks find jobs elsewhere. One part of government serves the rich, and others serve the so-called special interests. Then there are the many other parts of government serving other ends and getting in the way too. In a diverse society with many competing interests, we should expect just such an arrangement. The behaviour of modern democratic governments reflects the complexity and conflicts of the modern world. This does not mean that a particular government cannot lean either in the direction of liberalism or conservatism. The point is that government is heterogeneous,and there will always be contradictory efforts within a representative democratic government itself. Even within a single ministry, you will find that public policy often highlights illogical of contradictory mandates. Once we understand the heterogeneous nature of representative democratic government, we are better able to explain the endurance of the debate between conservatives and liberals. Each group describes an aspect of political reality. And that reality as a whole is diverse and complex enough to render each perspective compelling.

Does this mean that liberalism and conservatism are both equally correct? This is a difficult question to answer. Consider the competing views of human nature. The conservative has little patience for the liberal view that criminal behaviour should be regarded as a symptom of a deeper social problem. The liberal tends to believe that criminal behaviour can be prevented, or at least lessened, with an improvement in social conditions. Even the notion of crime puts the liberal ill-at-ease, for much of what is criminalized by the conservative is felt by the liberal to be no fault of the individual. The conservative usually doubts that crime is produced by the “system,” or by society; instead, crime is seen as a matter of individual character. Who is correct? The liberal can reasonably argue that in a perfect society, one without social inequality and injustice, there would be no crime. But this is a circular argument, for a perfect society presupposes the absence of crime. In any case, there is no empirical basis for the liberal claim because there is no perfect society for us to observe. The conservative can reasonably argue that crime is a failure of character, for one’s character is always one’s character, whether it was shaped by individual will or by social conditions, or more likely, by both. The conservative social and economic systems are based upon the Hobbessian belief that individuals are selfish and acquisitive; since the systems are designed to reward these traits, they tend to produce them.

Is the economic man thus an expression of human nature, or is he a self-fulfilled prophecy? The world as it is does not allow us to test theories of human nature under the controlled conditions of a laboratory. All we can do is observe the messiness. Human nature and human culture are integrated one into another. Perhaps no political philosophy has adequately represented the complexity of this integration, and perhaps no political philosophy ever will. It is precisely the limitations of political ideologies that has ensured their survival as ideologies. The limited nature of our political ideologies is not likely to change any time soon.

National Post

< http://fullcomment.nationalpost.com/2012/03/17/wayne-k-spear-a-beginners-guide-to-conservative-philosophy/ >

The Drummond report’s chapter on “Intergovernmental Relations” has received little attention so far. That needs to change. The chapter provides a devastating, evidence-based case that lays a lot of the blame for Ontario’s fiscal woes on the steps of the federal government.

When Premier Dalton McGuinty complained on Monday about federal decisions that are having a disproportionate effect on Ontario, he actually had the evidence on his side.

Chapter 20 of Don Drummond’s report begins by noting that in 2009-10, Ontario, with 39 per cent of the Canadian population, contributed 39 per cent to federal revenues, but benefited from only 34 per cent of federal spending — a gap worth about $12.3 billion or 2.1 per cent of Ontario’s GDP. The report concludes that this — among other factors — demonstrates the “perverse structure of Canadian fiscal federalism.”

Such a drain of fiscal resources from Ontario may have at one time been justified. It was the burden of prosperity that Ontarians gladly paid in the 1970s and ’80s.

Today, as is well known, Ontario’s fiscal capacity is below the national average. However, despite receiving equalization this year, Ontario, along with Alberta and B.C., are the only net fiscal contributors to the federation.

This is no longer sustainable. The operation of fiscal federalism and federal spending decisions that take money out of Ontario at a time when its fiscal capacity is below average is indeed “perverse” and should offend Canadians’ sense of fairness.

Over the past decade, the federal government sucked 2 to 4 per cent per year out of Ontario’s GDP for the purpose of regional redistribution. We are now seeing the long-term impact of federal policy on Ontario’s economy.

Ontario has the largest deficit in the country. This is not because of higher than average spending. In fact, Ontario spends less per capita than any other province. In 2009, Ontario spent just $9,030 per capita, well below 9th placed B.C., which spent $9,689. Newfoundland and Labrador ($13,466) and Saskatchewan ($11,848) were the biggest spenders and, despite surging resource royalties and above average fiscal capacity, both continue to be significant beneficiaries of federal spending. With resource revenues and generous federal spending decisions, it is not surprising that they spend more than other provinces.

This is the backdrop to Ontario’s efforts to bring down its deficit: It already runs the least expensive, most efficient programs in the country. It has to. Because of the operation of federal transfers and spending, Ontario has fewer dollars to spend, in a virtual tie with P.E.I. for lowest fiscal capacity among provinces.

The Finance Canada data presented in the Drummond report are clear: Ontario has less ability to deliver the same level of public services as other provinces because of federal decisions.

The absence of ballooning resource royalties in Ontario and the relative weakness in the Ontario economy have slowed but not stopped the redistribution of Ontario’s wealth to provinces with greater fiscal capacity. Perverse indeed.

The toll from federal policies that drained funds from the Ontario economy is now being felt. Higher university tuitions, less infrastructure spending, more user fees. Ontarians continue to bear an unfair burden from federal regional redistribution.

The solutions proposed by Drummond are straightforward: end the unprincipled clawbacks to the equalization program that have deprived Ontario of needed funds; undertake broader reform of fiscal transfers; allocate money for everything from labour market training to infrastructure to social housing fairly; reform key programs like employment insurance that siphon money from Ontario workers and businesses; compensate provinces when the federal government downloads costs through legislation like the omnibus crime bill; and avoid unilateral federal changes to the tax code that must be mirrored by provinces and that hit a province’s bottom line.

The continuing wealth transfer from Ontario has become a pressing national issue. Policies, cultural habits in Ottawa and allocation formulas established long ago are no longer justifiable — and they are doing long-term damage to the Ontario economy. The data in the Drummond report make this increasingly clear.

I suspect that most Canadians would be genuinely surprised to find out that federal spending and transfers continue to redistribute money away from Ontario, rather than toward it. I also think that this would genuinely offend their sense of fairness. Canadians support the notion that provinces with below average fiscal capacity should benefit from federal transfers. Right now, Ontario continues to pick up the tab.

Most of the attention on the Drummond report has been understandably focused on what Ontario needs to do to return to balance. However, the report makes a pointed case for federal action as well. Ontario needs a federal partner willing to acknowledge its role and do its part. Without this key ingredient, Ontario faces an even steeper climb out of its fiscal hole.

Matthew Mendelsohn is director of the Mowat Centre at the School of Public Policy and Governance, University of Toronto.

< http://www.thestar.com/opinion/editorialopinion/article/1142062–ontario-staggers-under-burden-of-fiscal-federalism >

< 5af3171743ca892f7f5f14a4ff7d.jpg >

The Liberals are replacing the archaic “secret law” police used to place hundreds of people under arrest during the G20 summit in 2010.

The Public Works Protection Act has been shelved in favour of a new bill that would apply only to securing power plants and courthouses, said Community Safety Minister Madeleine Meilleur.

The legislation, introduced Wednesday, was created out of recommendations of former chief justice Roy McMurtry in the wake of the G20 fiasco. It is far narrower in scope than the old law.

“It will be limited because we are following Judge McMurtry’s advice and, according to him, the … Criminal Code covers the rest,” Meilleur said Wednesday.

The bill will allow people to be asked for identification and to be searched when they enter court buildings. It also allows for the use of reasonable force to remove a person where court proceedings are being conducted.

It provides the power to arrest a person committing any of the offences listed in the bill “without warrant and using reasonable force if necessary,” the legislation states. A person convicted of any of the offences can be fined up to $2,000, face imprisonment of up to 60 days, or both.

During the June 2010 Toronto G20 summit, the obscure 1939 Public Works Protection Act, enacted to secure against Nazi saboteurs early in World War II, was used to quietly pass a regulation giving police broad powers of arrest.

That directive was merely supposed to clarify police powers within the secure summit site at the Metro Toronto Convention Centre, but people were misled into believing it applied to an area five metres outside the cordoned-off zone.

While only two of the 1,105 arrests made during the G20 related to the act, there was widespread outcry over the so-called secret law.

“This was an occasion for us to review legislation passed in the middle of the Second World War,” said Meilleur, who did not offer an apology for what many civil liberties groups felt was an abuse of power.

Progressive Conservative Leader Tim Hudak said the Liberals “lost touch” with the public by using a World War II-era law to round up people during the summit.

“Nobody forced them to bring in the secret law at the G20. Nobody forced their arm,” said Hudak. “It was a major scandal for the province.”

NDP Leader Andrea Horwath said the new law is an “admission” of failure on the part of the Liberal government.

“They made a big mistake when they were preparing for the G20 and they’re ignoring the fact that mistake trampled people’s civil rights, civil liberties,” said Horwath.

McMurtry’s 54-page report on the old law noted the “potential for abuse” was “beyond troubling” and said it was a “loaded weapon” that threatened civil liberties.

Under the act, police or private security guards do not have to justify their actions against citizens, he pointed out.

< http://www.thestar.com/news/canada/politics/article/1135110–secret-g20-law-to-be-scrapped >

Gloom – or Doom.

Ontarians could face higher hydro bills, bigger school classes, fewer hospitals, more expensive tuition and user fees to protect the future of provincial public services.

That’s the grim message from Don Drummond, chair of the commission on public-service reform.

His two-volume, 665-page report delivered Wednesday is so weighty that a table collapsed when Ontario Provincial Police officers unloaded copies in the media lock-up.

“Ontario faces more severe economic and fiscal challenges than Ontarians realize,” Drummond warned.

“We can no longer assume a resumption of Ontario’s traditional strong economic growth and the continued prosperity on which the province has built its public services,” he said.

“Our message will strike many as profoundly gloomy. It is one that Ontarians have not heard, certainly not in the recent election campaign, but one this commission believes it must deliver.”

While Premier Dalton McGuinty struck the Drummond commission in the March 2011 budget, the need for drastic cuts was rarely if ever broached by the Liberals, Progressive Conservatives or New Democrats in the Oct. 6 election.

All the major parties agreed that the deficit, which sits at $16 billion this year, could be eliminated by 2017-18 relatively painlessly.

Not so, warned Drummond, who projected the deficit would balloon to $30.2 billion in 2017-18 unless spending growth is radically curbed.

As first disclosed by the Star, overall increases must be capped at 0.8 per cent per year through 2017-18.

Health care spending, up an average of 6.3 per cent annually over the past five years, must be held to 2.5 per cent growth.

But Drummond admitted “not one jurisdiction in the world” over the past 30 years has managed to keep health costs to even that annual rate.

Primary and secondary education costs can rise only 1 per cent with colleges and universities going up 1.5 per cent and social programs just 0.5 per cent.

Everything else the government funds must be reduced by 2.4 per cent per year.

“Reform must be pervasive and speedy. The government will need to implement all the reforms we recommend … to restrain the growth of program spending enough to achieve balance by 2017-18,” he said.

With 362 recommendations — 105 on health alone — there is much for McGuinty’s Liberal government to digest.

Senior Liberal officials, speaking before Finance Minister Dwight Duncan was to meet with reporters later Wednesday, confided much of Drummond’s report would be taken under advisement.

Some of its tenets will be introduced in Duncan’s budget next month or are already under way with Health Minister Deb Matthews’ reforms announced two weeks ago.

But Liberal insiders told the Star that the report presents a “worst-case scenario” that could give the government political cover when less dramatic cuts are made later this year.

That is not what Drummond wanted to hear.

“This is not a smorgasbord from which the government can choose only the tastiest morsels and ignore the less palatable,” he said.

“We can all agree that change is disruptive, but the medicine does not go down more easily if it is dragged out over a long period.”

Although Drummond was not allowed to consider tax hikes, he said he “cheated a bit” and found $2 billion in “enhanced revenues” though higher fees and better collection of monies owed the province.

But the lion’s share of the savings he identified came from cutting some of the Liberal government’s most treasured achievements, including:

• scrapping or revamping full-day kindergarten;

• raising the 20-student class-size cap in junior grades to 23 children and increasing the average in junior grades from 24.5 to 26 students and from 22 to 24 in secondary school;

• ending the Ontario “clean air benefit,” the 10 per cent rebate to electricity bills that costs the treasury $1 billion a year;

• cancelling the new 30 per cent Ontario tuition grant for college and university undergraduate students unless the overall post-secondary budget can be kept to a 1.5 per cent rise;

• extending the period municipal social service costs will be uploaded back to Queen’s Park by two years to 2020

• amalgamating some of Ontario’s 151 hospital corporations.

But Drummond urged against “across-the-board cuts,” wage freezes or targets for civil-service job reduction, though he implored the government to be creative.

“Do not hang on to public assets or public service delivery when better options exist. Consider privatizing assets and moving to the private delivery of services wherever feasible,” he said.

That does not mean a fire sale of assets.

“Do not partially or fully divest any or all of the province’s government enterprises – Ontario Lottery and Gaming Corporation, Liquor Control Board of Ontario, Ontario Power Generation and Hydro One – unless the net long-term benefit to Ontario is considerable and can be clearly demonstrated through comprehensive analysis.”

Still, he suggested the LCBO improve its purchasing power and open more stores to generate revenue.

As well, the gambling agency should close one its two head offices — in Toronto or Sault Ste. Marie — as well as one of the two Niagara casinos and allow more slot machines to be installed beyond just at racetracks or existing gaming facilities.

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Canada’s Charter of Rights and Freedoms, once thought to be tilting this country in the direction of the United States, is viewed as distinctive and a model for other nations, especially in the English-speaking Commonwealth.

That finding, in a U.S. study to be published this June, is a tribute to the intricate balancing act that is the 1982 Charter of Rights and Freedoms. As Canada was founded on compromise and dialogue, so are those qualities woven into its rights charter. And so it offers a structure for working through the competing interests found in any sophisticated, multicultural nation – as in the case of a Muslim woman who wished to wear her face veil while testifying in a sexual-assault case. (The case is before the Supreme Court of Canada.) That kind of discussion has proved to be illuminating for courts in other lands.

The structure for balancing opposed interests is found in three key sections. Section 1 sets out that rights are not absolute; governments may limit them, as long as they have evidence to justify those limits. (The Canadian Charter was the world’s first rights-protecting agreement with a broad limitations clause.)

Section 15, the equality-rights section, is open-ended, and new groups, such as gays and lesbians, have been brought under its umbrella by the Supreme Court. (Hence, gay marriage.)

Section 33, the override or “notwithstanding clause,” says that when a court strikes down legislation, a government may go ahead anyway – though it has to renew that decision every five years. That has made for a delicate balancing act between judges and legislators. Judges need to spend their political capital wisely.

It’s worth remembering the fears, not entirely unfounded, that judges would in effect sweep legislators aside and run the country. The Canadian model that seeks a balance or dialogue between judges and legislators has become the norm in many democracies, according to Sujit Choudhry, a Canadian who is the Cecelia Goetz Professor of Law at the NYU School of Law. Judges in Britain, where the European Convention on Human Rights has been imported into domestic law, cannot strike down laws, but they can review them and pronounce them incompatible with the convention – obliging legislators to reply.

“Is Canada a constitutional superpower?” U.S. law professors David Law and Mila Versteeg ask, in an article to be published this June in the New York University Law Review. They imply the answer is . . . no. Still, “on average, the world’s democracies are constitutionally more similar to Canada than to the United States.” And “given Canada’s relatively high prestige and goodwill as a member of the international community,” they conclude that Canada is “a constitutional trend-setter among common-law countries.”

Canada is no military superpower, though it fights hard. It may yet become an energy superpower, whatever that is. But in projecting its values through the plain-language Charter of Rights and Freedoms, it is proving surprisingly influential: a moral leader.

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There are now 33.5 million people living in Canada, and our population is growing faster than that of any other G8 nation, results of the 2011 census released on Wednesday show. Click through the tabs to see figures for the population overall and breakdowns for the provinces, territories and urban centres.

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Stephen Harper owes his success in no small part to his mastery of demographics, having tailored his election platform to winning enough seats in key pockets of Ontario and elsewhere to achieve a majority.

Now, the renowned tactician has turned his attention to a grand vision, a once-in-a-generation kind of reform that would change how we save for retirement, whom we admit to the country and how we orient our economic policy.

Speaking in Davos, Switzerland, last week, Mr. Harper said Canada’s aging population threatens our cherished social programs. He thrust obscure stats such as the old-age-dependency ratio to centre stage, promised to overhaul our immigration system and strongly hinted at raising the age of eligibility for old-age security.

These are transformative changes, the kind that can’t be executed without a good deal of persuasion. The Prime Minister will get some ammunition on Wednesday. That’s when the first results of the 2011 census are released. Every census is used for political purposes, but this one will be the most significant in a generation. It will be the evidence Mr. Harper relies on to advance an austerity agenda.

Mr. Harper has indicated that he wants to cut now to prepare for the coming bulge of baby boomers, the first of whom are now turning 65, and whose number and influence will be reflected in upcoming census releases. He will argue that they pose a threat to Canada’s financial security, and their appetite for the pensions and health care they have been promised certainly will prove expensive.

The census will also help Mr. Harper as he seeks to push closer links with Asia. In his Davos speech, he promised to explore other markets for oil after the Keystone pipeline setback, as well as free trade with India. He visits China next week. The westward momentum of the population and its growing human ties to Asia through immigration will create further impetus for Canada’s Pacific reorientation.

The question is whether Mr. Harper can address these national challenges while holding together the hard-won coalition he built into a majority government. After finally persuading enough of Atlantic Canada and Ontario to join his western-based Conservative Party, he could alienate voters in those provinces by turning a deaf ear to local concerns. Atlantic Canada is aging and Ontario’s share of immigration is tumbling. A failure to deal with either of those could have major economic consequences.

At the same time, the aging of the population is tearing at the national compact. The Constitution promises “reasonably comparable levels of public services at reasonably comparable levels of taxation.”

It’s hard to imagine that will be the case in provinces whose horizons differ as much as Alberta and Nova Scotia.

The first volley in this battle was launched last month over health care. The most forceful objection to the Prime Minister’s new deal on health transfer payments – a straight 6-per-cent increase based on population – came from British Columbia. Premier Christy Clark argued that B.C. and Atlantic Canada would suffer if the funding formula did not compensate provinces, like B.C., that have a higher proportion of old people. Meanwhile, Alberta, which has Canada’s youngest population, would be nearly $1-billion a year richer under the new formula.

The straightforward per-capita grant fits with Mr. Harper’s view of a decentralized Canada, where the federal government doles out money and the provinces decide how to use it. The Prime Minister is a bit of a puzzle in this: The same man who told an audience in Switzerland that demographics threaten our social programs was apparently unable to see the sense in a more detailed demographic argument from Victoria.

Gone west

The census will show that population growth in Canada is shifting westward to the resource-rich economies, as it usually does when oil prices are high. Increasingly, that trend seems permanent. In 2010, nearly every city in the West grew at a rate above the national average, while only nine of the 25 cities from Ontario east could claim the same. And while every province worries about the costs of an aging population, some provinces are older than others. To compound their problems, the oldest provinces also tend to be the worst off.

The cleavage runs more or less along the Ontario-Manitoba boundary. In the West, Alberta is a behemoth. It has the highest proportion of people of working age and the lowest proportion of seniors. With a little more than 10 per cent of Canada’s population, it contributes more than 16 per cent to the national gross domestic product. Its median age is the lowest in the country. Once mocked for its parochialism, it now attracts one in 10 immigrants to the country.

Manitoba and Saskatchewan are home to some of the country’s fastest-growing communities. Winnipeg’s share of immigrants soared by 88 per cent from 2006 to 2011, compared with the 2001-06 period. Saskatoon and Regina exploded with immigration growth of 180 per cent and 162 per cent, respectively, in that time. The delivery rooms of local hospitals are also proportionally busier than in the rest of Canada, since the highest birth rates are on the Prairies. Saskatchewan, long a net loser of population, will probably trail only Alberta in population growth this time.

Atlantic Canada, conversely, is by far Canada’s oldest region. Despite some recent immigration gains, the median age is three to four years older than the rest of the country. That bodes ill. All four provinces have median ages well into the 40s, above the national average, with Newfoundland the highest at 43.8.

The future

Consider for a moment what the federation might look like in 20 years when the baby boomers have all turned 65. Somewhere between a quarter and a third of Atlantic Canada will be over 65. The preponderance of white hair on the street will be slightly surreal. There will be about two people of working age to support each retiree. Health-care costs will devour provincial budgets. Nursing homes will be the new fishery. That also has consequences for the younger generation – older voters are less likely to demand investments in education and innovation. Their horizons tend to be shorter.

Meanwhile, Ontario, for so long the linchpin of economic growth in Confederation, is showing signs of decline. It has lost more than 300,000 manufacturing jobs since 2000 and watched its share of the national immigration pie drop to nearly 40 per cent from 60 per cent in just five years. About two-thirds of Canadian population growth is due to immigration, the other third to births (the reverse is true for the U.S.), which is why Ontario has for years been one of the fastest-growing provinces. Those immigrants, typically younger and better educated than the rest of the Canadian population, contributed to the province’s growth and were a sign of its prosperity. Now, Ontario might actually see its rate of population growth drop below the national average, a symbolic threshold.

Quebec has also suffered economically and for years welcomed less than its proportional share of newcomers. As it continues to grow more slowly than other parts of Canada, its relative influence in Confederation dwindles, fuelling its existential angst. The sovereigntist movement might be quiet for now, but will it be in 10 years?

Keeping these regional interests from boiling over will be Mr. Harper’s challenge. His first test came from the premiers on health care. In that case, his vision demanded that every province be treated the same. The danger of that philosophy is it could make them more different than ever.

Joe Friesen is The Globe and Mail’s demographics reporter.

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