equalization woes pass fentie by

Canada’s southern premiers can squabble all they like over the so-called “fiscal imbalance” that is said to exist between have and…

Canada’s southern premiers can squabble all they like over the so-called “fiscal imbalance” that is said to exist between have and have-not provinces.

The northern territories have a different deal cooking with Ottawa.

It’s called the territorial funding formula, and it has been one of Premier Dennis Fentie’s sacred cows in the twilight of his mandate.

“Equalization does not impact or affect the North in any way,” Fentie said Thursday.

“The territorial funding formula is our mechanism. It is the fiscal arrangement that will ensure comparable services to northern citizens as equalization envisions for provinces across the country, ensuring that all jurisdictions can deliver comparable services to their citizens.”

In this sense, Fentie is a staunch federalist. He believes that services like health and education are Canadian rights, and must be available and comparable across the country.

In another sense, Fentie is lucky his jurisdiction is a northern one, with a financing deal separate from the provinces, because he doesn’t have to test the mettle of his federalism against that of his southern counterparts.

The breaking point in the fiscal imbalance debate comes at the question of whether or not resource revenue should be added to the $11.5-billion federal fund that all provinces pay into.

Ontario and Alberta are the only provinces that don’t receive payments from the fund.

Certain premiers, such as Alberta’s Ralph Klein, have long opposed the notion of sharing royalties with Ottawa, and by extension the rest of Canada, saying that regional wealth from resources like Alberta’s oil sands belongs in the jurisdictions where it has been found and cultivated.

Other premiers, such as Newfoundland’s Danny Williams, foresee a bright future in a particular economic sector — offshore oil and gas development, for instance — and align themselves with Klein.

Others, such as Prince Edward Island’s Pat Binns, insist that resource revenues must be part of any equalization plan, according to the Canadian Press.

“None of us are looking for another province to write us a cheque,” said Binns.

And still others, such as Quebec’s Jean Charest, plan to hold Prime Minister Stephen Harper accountable to a campaign promise of fixing the fiscal imbalance.

“Fixing the fiscal imbalance for Quebec means fixing equalization and reinforcing and strengthening equalization,” Charest told the Canadian Press.

Much of last week’s discussions among the premiers at meetings in Newfoundland focused on this debate.

Unfortunately, said Williams, they couldn’t reach an agreement.

“We can’t reconcile the irreconcilable,” Williams told CBC Radio One in St. John’s.

“We have people at both ends of the spectrum. There’s absolutely no way to raionalize that or bring it together.

“The positions are firm.”

Fortunately for Fentie, Northwest Territories Premier Joe Handley and Nunavut Premier Paul Okalik, the northern premiers don’t have to take positions, because of their separate deal.

They’ve even got the unanimous support from the provincial premiers in their bid for a base-plus-per-capita funding arrangement with Harper’s Conservative government.

The northern premiers met together with Harper and federal Finance minister Jim Flaherty after the Conservative victory in January, to discuss a better financing deal for the territories based on a benchmark and topped up according to population.

And now the northern premiers have backing from the south.

“That’s a very positive step for us, with that continued support from the provinces,” said Fentie.

It also saves them from picking a side on equalization.

Like Klein and Williams, Fentie is a conservative, right of centre, a leader who believes that sound economy is the basis of all prosperity and folks should be given the opportunity to pull themselves up by their own bootstraps, rather than coddled by government.

He also believes Yukon’s resource revenue, meagre though it be at present, coming almost exclusively from the Kotaneelee gas field in the southeast, belongs in Yukon hands, not Ottawa’s.

Thus Fentie must be envious of Klein and Alberta’s wealth, which can sustain both the province and conservative ideology.

Reliance on Ottawa is a fact of life for Yukoners, a remote and miniscule population. Fentie has often argued that transfer payments from Ottawa — worth $558 million in the 2006-2007 budget, the lion’s share of territorial revenue — are not handouts, but what we are owed as Canadians.

It’s a good thing Fentie leads where he does. Down South, he’d be caught in doublespeak, simultaneously arguing for enriched federal transfers and for hording regional wealth.

But maybe that’s politics. (GM)