The provincial premiers are meeting on the economy in Halifax today and tomorrow and Prime Minister Harper will not be joining them. Several of them have offered up expressions of surprise and disappointment and have lamented the absence of the Prime Minister. The operatic drama that often characterizes exchanges at federal-provincial meetings has been absent the last few years given that one of the chief actors refuses to come. I suppose the premiers are unwilling to replicate the Clint Eastwood approach to political discourse and simply address an empty chair.
The rhetoric is quite interesting. Interim Liberal Leader Bob Rae says: “I don't know any other federation in the world where the first minister refuses to have a meeting with all the premiers. It's without parallel in the world." I suppose Rae is referring only to parliamentary federations, as I am not aware of regular policy meetings in the American federation between the President and all the state governors (though Presidents have addressed the annual meeting of the National Governors Association). Dalton McGuinty apparently remains unapologetic about prorogation and his unwillingness to meet his opponents in the arena of the legislature but is critical that Stephen Harper will not come to Halifax and meet with the premiers. Oddly enough, the two have much in common when it comes to dealing with legislative bodies.
There are explanations as to why Harper has displayed a reluctance to meet with the premiers that perhaps Julius Caesar should have displayed with respect to the Roman Senate. Going to meet the premiers is a politically risky business with high costs and few benefits. Inevitably the meetings become attempts by the premiers to score political points by beating up on the federal government as they call for more resources. The Prime Minister does not seem to like public events that can rapidly become unscripted and therefore prefers to meet with the premiers individually.
More to the point, why go to a meeting that will be inevitably marked by demands for more federal transfers even if the meeting is supposed to be about “the economy”. Harper probably believes the provinces have more than enough resources to meet their own needs. As the two accompanying figures show, the provincial-territorial governments combined have larger revenue to GDP ratios than the federal government. The revenue data for these figures come from the Federal Fiscal Reference Tables. The figure on the left shows that the share of total federal revenue to GDP has declined from about 18 percent in 2000 to 14 percent in 2011. Total provincial-territorial revenues to GDP have stayed at about 21 percent.
The right-hand side figure tries to show "effective" revenue resources available once inter-governmental transfers are accounted for. Provincial revenues here subtract the transfers that they make to local government. Federal revenues subtract the transfers made to the provincial and territorial governments. This figure shows the provincial-territorial "effective" revenue share of GDP fluctuating between 17 and 19 percent over the period 2000 to 2011. Once transfers made to the provinces are subtracted, the federal "effective" revenue to GDP over the same period drops from 15 to 10 percent.
One can make the argument that the federal government’s declining revenue to GDP ratio is the result of its own tax policies and that it would be higher if it had reduced taxes less aggressively. Less aggressive tax reduction might have resulted in higher federal revenues and more money potentially available to hand over to the provinces. Or, you can ask if the provinces need more money for health and education why they do not move into the room vacated by the federal government by raising their own taxes? Why do they need Harper at a meeting to do that?