The deconstruction of confederations - Chapter 2
NOTE - I made an error in part 1 – the shift of the Privy Council from the Governor General’s office to the Prime Minister’s office occurred in 1940, not 1941. Tip of the hat to a sharp-eyed reader.
The federal government has a long string of areas with announced funding for projects in the provincial domain. One particularly annoying area is housing. The federal government came up with protecting mortgages through the Canada Mortgage and Housing Corporation. People buying homes that met specific criteria such as a minimum level of down payment were insurable by the federal government, making it is easy to obtain a bank mortgage.
If a person buys a home for $450,000 with a 5% down payment, he will have an insurable mortgage of $427,500. The lender (bank) will pay an insurance premium of 4% or $17,100, which must be paid upfront, or the lender will add it to the mortgage bringing the mortgage amount to $444,600. Looking at a 25-year amortization and a five-year fixed term @ 2.09%, the insurance premium will increase the monthly mortgage payments by about $73.16. That comes to $4,389.60 over the first five years. The kicker is that the money goes to protecting the bank, not the purchaser.
Every federal political leader spouts nonsense about increasing affordable housing, which is another fairy tale. Property is in the provincial domain. The federal government has no business interfering.
Cities are wailing that they cannot meet housing demands or the costs of infrastructure. That is mainly due to a combination of greed and poor planning. Cities don’t want cheap housing. Their primary income is from property taxes, and if prices fall, they are in deep fiscal trouble. They make no effort to limit growth to allow the construction of infrastructure to meet demands. Most cities avoid spending on infrastructure maintenance and upgrades until they face failures. Then they demand the province step in to fix infrastructure deficiencies due to bad planning. We are subsidizing mediocre civic governance.
The federal government is all too willing to step up and offer to fund city infrastructure deficits. That presents numerous problems. First, the federal government cannot deal directly with cities without undermining the sovereignty of the provinces.
Second, the federal government uses a fictitious three-level funding model which required participation by the province and the city. That means the provinces and cities have less discretionary spending and less room to meet the needs of residents.
Third, every taxpayer is funding big-city deficits. Neither federal and provincial governments can justify requiring a pensioner in Yorkton, Saskatchewan, helping to pay for deficits in Calgary, Toronto and Montreal.
One solution is to turn cities with a population of 2.5 million or more into provinces. Then they can sink or swim on their own.
If the federal offer to subsidize daycare in British Columbia does not make you ill, it should. Once again, the federal government is off its reservation, trolling for votes with our money. Child care is a provincial responsibility. It is highly discriminatory as parents living outside of urban areas do not get equal funding or spaces, and low-income parents find spaces filled by high-income parents. Cities and the provinces are roped into participating in costs, diminishing their ability to govern without federal help.
The final piece to the puzzle is equalization, which the federal government has used to keep so-called have-not provinces on a federal subsidy leash. The best description for this program is that it rewards incompetence. The federal government has used it to squelch resource development outside of Ontario to prevent other provinces from becoming too successful. Envy is ugly.
The discrimination embodied in federal environmental policies is outrageous. The treatment of shipping policies between our east and west coasts, particularly respecting tankers, is appalling. Regulations should apply equally across the nation, and they are not.
The federal government will claim that equalization is embodied in the constitution, which is true. The formula for applying equalization is not. Section 33 of the constitution states that equalization is a joint effort of the federal and provincial governments (parliament and the legislatures). The current formula, which does not meet the objectives of Section 33, must be amended with the agreement of provinces without delay.
The federal government is on the road to incompetence and mediocrity. Like any government with totalitarian ambitions, our federal government has involved itself in everything and is doing it badly.
Mr. Trudeau loves to wrap himself in the flag while he ignores federal constitutional responsibilities. That charade must end.