1 No. 1
"India is the cradle of the human race... " - Mark Twain
Don't forget taxpayers in any new fiscal federalism
(met) once again to discuss ideas for strengthening Confederation. Central to
that endeavour is the need to ensure that all governments have the
revenue they need to provide the services for which they are
responsible -- within taxpayers' ability to pay.
Canadians contribute about half-a-trillion
dollars annually to their governments at all levels. That should
be more than enough revenue to pay for all of the programs and
services governments provide. The question is: How can we better
use that money to benefit taxpayers across Canada? How can we
better ensure that all levels of government in every province have
the fiscal capacity to deliver reasonably comparable levels of
service at reasonably comparable levels of taxation?
Premiers have often called on Ottawa to
assist in funding all sorts of worthy national priorities, from
health care, skills training and postsecondary education to
transportation, infrastructure and a national pharmaceutical
strategy; to say nothing of our common commitment to closing the
gaps for aboriginal Canadians in health, education, housing and
These are all vitally important national
needs that should be supported within governments' means. But
there is a limit to what provinces can expect or should demand
from Ottawa, because taxpayers also deserve a break.
put, governments at all levels are taking too much out of
taxpayers' pockets for too little marginal benefit, leaving
working families too little to make ends meet and get ahead. If
the federal government has more money than it needs to fulfill its
responsibilities, its first priority should be to reduce the tax
burden on all Canadians with a significant tax cut. This should
take precedence over any increases in equalization or massive new
increases in federal transfer payments to other governments.
Governments striving to increase revenue
should focus on economic growth and wealth-creation. While we look
at modernizing fiscal federalism, we should also be driving a
national competitiveness agenda -- with competitive tax rates at
the top of the list.
To compete and prosper in today's economy, we
must step up our commitment to train, attract and retain skilled
workers. We need new investments in postsecondary education,
skills training and apprenticeships. We also need to dramatically
expand our efforts to recruit skilled immigrants, with flexible
and pragmatic new immigration policies and national strategies for
credentialing in areas of skills shortages.
Let's create wealth by closing the social and
economic gap with aboriginal Canadians, the fastest-growing
segment of our population. The sooner we close the aboriginal
skills training gap, the faster we will address skills shortages
and improve the quality of life for aboriginal Canadians.
Working together, Canada's governments can
generate economic growth by expanding targeted investments in
infrastructure and transportation. We need to open up Canada's
Pacific Gateway and establish a Pacific corridor into the heart of
the country and the continent with strategic investments in our
ports, airports, roads, bridges and border crossings.
We should foster greater mobility of labour,
investment and truly free trade within Canada. British Columbia
and Alberta are leading the way in this regard through a new
landmark agreement that establishes the second largest economic
union in Canada, after Ontario. This is something all provinces
could do on their own, without a penny of new federal funding.
These are all far more urgent priorities, in
my view, than a wholesale renewal of the equalization program. At
a minimum, any change in equalization must not create new barriers
to competitiveness through policies that tilt the scales against
taxpayers in provinces that foot the bill.
Provinces that receive equalization should
not have a higher fiscal capacity than non-recipient provinces.
Provinces that benefit from equalization should not have higher
per capita program expenditures than the average of provinces that
foot the bill. And equalization subsidies should not grow faster
than the average rate of inflation or the average rate of economic
growth for Canada.
We should not make the equalization formula
even more unfair and complicated by counting assessed property
values as a measure of fiscal capacity when, in fact, these
property values are not a measure of taxpayers' ability to pay. In
the new fiscal federalism, commitments made should be commitments
kept. And all governments should respect the hard work it takes
for every taxpayer in every province to generate the revenues we
are entrusted with.
(As we meet in
Newfoundland) The premiers
should consider how we can strengthen Canada's competitiveness
through lower taxes, strategic national investments, co-ordinated
planning, new relationships with aboriginal Canadians and fair