Winnipeg Free Press - PRINT EDITION

Canada is a country, not a set of provincial fiefdoms

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CALGARY -- Christy Clark's recent assertion British Columbia didn't need the federal government or Alberta reveals why Canada's founding fathers were concerned about provincial politicians: Thinking in isolation harms the interests of all Canadians.

The context of her remark, made during the election, was how B.C. could become an energy superpower if more natural gas was developed and delivered through pipelines, as opposed to "allowing" oil pipelines to criss-cross British Columbia more than they already do.

In particular, Clark's position on the Northern Gateway pipeline, articulated last year, is based on extracting compensation from Alberta or the federal government. (She also demanded deals with aboriginals and environmental protection but those are de rigeur these days and, thus, superfluous demands.)

Clark's pay-to-play ultimatum is silly and I say this as a temporarily exiled British Columbian. The constitution is clear resource revenues belong to the provinces. And should Ottawa begin paying off premiers to "allow" national resource development, there will be no end to diverted federal tax revenues or the impairment of national prosperity.

Then there's the risk of retaliation -- B.C.'s government might need a friendly Alberta government one day.

As Calgary Herald columnist Don Braid noted recently, courtesy of the Alberta premier's office, "50 per cent of B.C.'s growing natural gas production crosses Alberta to get to market."

Alberta's politicians could just as easily demand a cut of revenues from that interprovincial flow as B.C.'s politicians do from any proposed new oil pipeline.

What is good for the B.C. "goose" is just as easily extracted from the B.C. "gander."

When provincial politicians protect their own constitutional turf, or object to federal transfers that rob taxpayers in policy-smart provinces to subsidize policy-challenged governments in others, they are on solid ground.

But protectionist politicking undermines greater Canadian prosperity, which is why so many founding fathers opposed such provincialism.

In 1865, George Brown, the Upper Canada parliamentarian, complained a trip to Nova Scotia or New Brunswick was like visiting a foreign country, where a "customs officer meets you at the frontier, arrests your progress, and levies his imposts on your effects."

This led Brown to argue "heartily for the union, because it will throw down the barriers of trade, and give us control of a market of four million people."

As a royal commission from 1940 on Dominion-provincial relations looking back to 1867 noted: "Economically, the first objectives of Confederation were to establish a free-trade area comprising the five old provinces and to develop inter-provincial transportation facilities."

Before Confederation, the provinces imposed tariffs and duties on each other's goods, which punished consumers and businesses with higher prices and dampened the potential for greater economic growth in British North America.

Post-Confederation, provincial attempts to block interprovincial trade were annoyingly constant.

It is why the Dominion government disallowed 65 pieces of provincial legislation in the first 30 years after Confederation when such laws interfered with the greater prosperity of the country.

That power of disallowance is a power the federal government retains today, even though it is rarely exercised.

So what's the relevance to the present? At Confederation, duties and tariffs were the main hindrance to interprovincial trade. Today, provinces often use the environmental excuse to block investment and development, even though Canada has plenty of environmental safeguards.

Such provincial thinking is shortsighted and more history is helpful to make the point.

Provincial economies wax and wane and the provinces need each other more than some people think.

Prior to the opening of the Panama Canal in 1914, British Columbia's lumber was uneconomical to ship off the continent. The 1940 Royal Commission observed how British Columbia's forest industry, pre-Panama Canal, was "almost entirely dependent on the Prairie provinces" because the Prairies were the only accessible market.

Sound familiar?

When done right and accounting for the environment -- and it can be done right -- and whether lumber, mined materials, or the export of oil and natural gas, Canada's greater prosperity is enhanced when politicians follow the advice of Canada's founding fathers and consider the greater prosperity of the entire country.

The newly re-elected B.C. premier therefore has a choice: She can continue with provincial politicking or do what is best for all of Canada and, indeed, even for British Columbia -- take a national view.


Mark Milke is a senior fellow at the Fraser Institute.

--Troy Media

Republished from the Winnipeg Free Press print edition May 28, 2013 A9

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