anticipate the squeeze

Ottawa gives a lot of money to the Yukon. How much money? Well, it works out to roughly $30,000 per person, per year. That is bucketloads of cash - insane wealth. By comparison, PEI gets roughly $3,400 per person and BC about $1,200.

Ottawa gives a lot of money to the Yukon.

How much money?

Well, it works out to roughly $30,000 per person, per year.

That is bucketloads of cash – insane wealth.

By comparison, PEI gets roughly $3,400 per person and BC about $1,200. The national average is in the ballpark of $1,300.

So what makes us so special?

What makes us deserving of $1 billion in federal grants from our fellow citizens?

It is an interesting question, one we should all ponder. Carefully.

For example, is it the placeholder dividend – the bare-minimum cost of maintaining sovereign presence in Canada’s northwestern frontier?

Doubtful.

These days, Ottawa could stake and defend its claim to this region for far less money than that – the borders are well defined, mapped and generally accepted by all nations.

Traditional aboriginal settlements could serve this purpose as well as our artificial government towns, which exist solely on inertia; look around, despite the boom there is still scant little in the way of solid economic development to sustain them.

Of course, we could delude ourselves into believing Ottawa’s doling out the stipend while we get our economic legs under us.

But if so, where are the investments to power the boom and house the growing population?

For the last decade, residential lot development has been stagnant.

And the territory’s power infrastructure has been largely ignored, until a crisis, brought on by booming demand for base metals forced construction of the stupidly expensive Mayo B hydro and power line development – a project only viable because the feds subsidized it with another whack of cash.

And beyond that?

Well, the Yukon’s energy problems persist.

The Yukon Energy Corporation is still scrambling to find new power generation in the territory that won’t hike prices to the point of mutiny and industrial collapse.

A long-delayed housing development in Porter Creek will finally be built – alleviating the housing problem, but it will add to the territory’s power woes.

And the Yukon Energy Corp. missed its chance to get innovative geothermal or community heating plants in place before construction of phase one.

But the failure does not lie solely at the energy corporation’s door. The Yukon government has been derelict in drafting a policy that would guide power generation in the territory, or encourage new housing and business development to be more energy self-sufficient.

What does all this have to do with transfer payments?

Well, it raises questions about our society’s priorities. And how we’ve spent the wealth lavished on us from Ottawa.

Have we used it to make ourselves more self-sufficient, or more dependent on Ottawa?

Consider, for a moment, that expensive hospitals being built in rural Dawson and Watson Lake not only plundered the capital budget, but saddled the territory with expensive facilities to run in perpetuity.

And physicians and health-care workers got a lovely riverview complex next to the hospital that cost more than $17 million, while Fentie withheld a similar chunk of cash from the general public during a housing crisis to doctor his financial projections.

This has a real-world impacts.

For several years, private businesses have struggled to recruit talent because people are reluctant to move to a place where rents and housing prices are insanely expensive – if you can find something decent.

That throttles the economy.

The bottom line is that, after years of profligate spending, there is little to show for it – yet the territory now has close to $200 million in accumulated debt that it didn’t have at the beginning of this run.

This is significant, and will have a real impact on future governments.

Luckily, Ottawa gives us a crazy amount of cash. So this might not be a crippling problem.

Except Ottawa has a structural deficit of more than $50 billion and will not raise taxes. So it will be looking hard for places to cut.

So, it behooves us to ask, once in awhile, what makes us so special?

The answer, as uncomfortable as it may be, is nothing much.

So, when Ottawa tightens its belt, we shouldn’t assume it’s not going to pinch.