Will Pallister’s gamble in Ottawa pay off?


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He's at it again.

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Hey there, time traveller!
This article was published 11/12/2016 (2124 days ago), so information in it may no longer be current.

He’s at it again.

For the second time in his short tenure as Manitoba premier, Brian Pallister has challenged the federal government to a game of high-stakes poker. This time, Pallister is withholding his province’s approval of a national carbon pricing scheme that is a top political priority for the federal Liberal government.

Following a meeting between Prime Minister Justin Trudeau and the premiers last Friday, Pallister announced Manitoba would not sign on to the pan-Canadian climate change framework being pushed by Ottawa without a federal commitment to continue increasing health care transfer payments by six per cent annually. The transfer payment escalator is scheduled to be cut in half next year.

Patrick Doyle / The Canadian Press Manitoba premier Brian Pallister speaks to the media at the Chateau Laurier hotel before the First Ministers' Meeting in Ottawa on Friday, December 9, 2016.

Pallister’s stand leaves Manitoba and Saskatchewan, where Premier Brad Wall has categorically rejected the whole notion of a national carbon pricing scheme, as the only holdouts.

Linking health care transfer payments with the climate change framework – under which Ottawa would impose a tax on carbon if any province could not come up with its own matching mechanism – is an intriguing strategy. The scheduled cut in annual increases in health care funding is the number one issue for the provinces right now. And despite complaints and urging from the provinces, the Liberal government has not given ground on plans to cut the annual increase in payments, a policy foisted on the premiers by the former federal Conservative government.

In a statement released Friday night after the conclusion of the first ministers’ summit, Pallister directly linked the two issues. “We remain hopeful that the same kind of focused commitment we saw today on addressing climate change at the first ministers’ table will be evident in our discussions on health. We will wait and see,” he said. “Our answer (on the carbon pricing framework) therefore remains – not yet.”

It’s not clear that Ottawa – or anyone else for that matter – is taking Pallister’s ploy all that seriously. The day after Pallister dug in his heels, federal Environment Minister Catherine McKenna more or less dismissed the gesture as a publicity stunt.

“Manitoba’s going to sign on,” McKenna said in an interview on CTV’s Question Period. “I had a great discussion with (Pallister). They have committed to climate action. They’re already acting. They committed to a price on carbon in the speech from the throne.”

Manitoba has in fact committed to some form of carbon pricing, although the details of his plan are still not known. Still, he has been consistent in acknowledging the environmental and economic impact of climate change, and supporting the notion that government must put a price on carbon to cut emissions. His commitment to this course of action was repeated on December 8 in his state of the province address to the Winnipeg Chamber of Commerce.

However, there has been some speculation that Pallister, a notorious enemy of tax increases of any kind for any reason, might prefer to have Ottawa impose the tax in Manitoba. Under the terms of the national framework, if Ottawa has to impose a carbon tax, the money would simply be remitted to the province in question. It would allow Pallister to collect the revenue while still maintaining his pristine record on rejecting tax increases.

A more likely explanation is that Pallister is simply trying to establish a national reputation as a formidable force within the tiny community of first ministers. He clearly wants to be seen a tough customer that won’t be bullied into participating in federal initiatives.

It was just over five months ago that Pallister withheld his province’s support for a national agreement on reforming Canada Pension Plan benefits. In late June, Pallister withheld his support, asking instead that federal Finance Minister Bill Morneau re-opened negotiations so that several proposals from Manitoba could be included in the final deal.

The strategy was mostly unsuccessful in getting any kind of movement from Ottawa, but it did rattle Morneau.

At the moment Manitoba withheld its support, Ottawa had already obtained the necessary combination of provinces and population to ensure the changes would go through. Still, Morneau was concerned about any speed bumps on the way to full approval, fearful that some of the larger provinces would get cold feet and back out. As such, Pallister’s ploy was a source of consternation.

After Pallister and Manitoba Finance Minister Cameron Friesen released a series of modest tweaks to the CPP reform plans, Morneau flatly refused to re-open negotiations. It appeared that Pallister would be left swinging in the breeze, a rookie premier that had tragically overestimated his influence on national issues.

Eventually, Morneau threw Pallister a lifeline, agreeing to discuss the Manitoba proposals at a later unspecified date. Pallister heralded this concession as a victory, but it was pretty clear Morneau’s gesture was little more than a forced smile and a pat on the head for a province that really doesn’t have the population or the economy to be a major player on the national stage.

Manitoba is not wrong to strategically withhold his support federal files as a way of leveraging consideration. The federal government has always been willing to engage in a little horse trading to get provincial support for national programs in exchange for concessions on provincial priorities. However, there are limits to that strategy, and Pallister does not seem to have realized that.

The hard reality is that Ottawa does not need Manitoba’s support to act on either CPP or health care. And although Pallister might get some grudging respect from the other premiers for taking a stand on health care transfers, he runs the risk of becoming little more than a bug on Trudeau’s windscreen in this instance.

The other first ministers have already made it abundantly clear that they are offended by the notion of slowing the annual growth in health transfers. The fate of transfer payments is scheduled to be discussed at a future showdown between the premiers and Trudeau. Pallister’s publicity stunt adds nothing of value to that struggle.

In CPP deliberations, Pallister was trying to punch above Manitoba’s weight in national affairs. He got a few headlines, and ultimately achieved a moral victory in the form of a nebulous pledge to consider his ideas at a later date. It is unlikely that Ottawa will throw Manitoba a lifeline in this instance.

Manitoba’s ability to make progress on matters of provincial significance is wholly dependant upon a strong relationship with Trudeau and the federal government. It doesn’t seem likely that volunteering to serve as the anchor on any manner of national files will build that strong, productive relationship.

Unless other premiers come to Manitoba’s aid, and support his protest against declining health transfers by withholding their support on this or other files, Pallister runs the risk of being type cast as a rookie that pitches a tantrum every time he wants something.

It’s all good and fine to challenge the federal government, but it’s important to remember that gamblers lose as much or more than they win.


Dan Lett

Dan Lett

Born and raised in and around Toronto, Dan Lett came to Winnipeg in 1986, less than a year out of journalism school with a lifelong dream to be a newspaper reporter.

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