The Globe and Mail reports that former Bank of Canada Governor David Dodge suggests that the bitumen from the Tar Sands be routed to Eastern Canada. Because energy is the lifeblood of industrial economies, he suggests that giving Canadian industry access to Alberta's oil is better than readjusting the equalization formula. Unfortunately, with their characteristic tunnel vision, the Conservatives are fixated on Asia:
By and large, the philosophy at the moment is a pure hands-off philosophy, i.e. ‘Let today’s market and today’s relative prices determine what happens,’ with relatively little thought to the future and relatively little thought about, if you will, leaning against the wind,” said Mr. Dodge.
The financial meltdown of 2008 should have taught our present masters about the perils of a hands off philosophy. Moreover, that approach ignores Canada's struggling provinces:
“When you have the big tilt at the moment as we do, in what I call the resource super cycle, then you have to think very hard about tilting the playing field back a little bit toward the other sectors and that would be tilting it back towards the lower-income provinces,” he said.
Typically, the Harperites are capping equalization payments:
Last December, Finance Minister Jim Flaherty announced that future growth in the overall budget for equalization would be capped at the rate of economic growth by tying it to the rise in nominal gross domestic product through to 2018-19.
But Mr. Dodge calculates that this cap on equalization at a time when some provinces are enjoying big gains in resource revenues means the disparity between provinces will worsen. Mr. Dodge pegs this gap at $2-billion in 2012 and $6-billion by 2020.
What Dodge implies is that the Harperites lack a national vision. They are truly provincials.
