The Conservative government of Stephen Harper is committed to cutting federal spending in an effort to balance the budget, and it has announced that it will be conducting a comprehensive, government-wide program review to determine where those cuts can or should be made. This is a welcome initiative that's long overdue. Unfortunately, this review threatens to ignore one of the greatest sources of waste and inefficiency: duplication between federal and provincial departments and programs.
Sections 91 and 92 of our Constitution specify the division of spending powers between different levels of government. According to a study recently prepared for the Canadian Centre for Policy Studies, if the federal government were to limit its spending to only those areas under its exclusive jurisdiction and vacate all others, it could reduce its costs by an estimated $44-billion a year. Even under the most liberal interpretation of the division of powers, the federal government could reduce its spending by approximately $23.4-billion annually.
Of course, not all of the savings would end up in taxpayers' pockets. The provinces would have to assume some responsibilities currently fulfilled by the federal government -such as in the areas of health and education. Increases in provincial spending and taxes needed to pay for these, however, could be more than offset by the reduction in federal spending and taxes since, in most cases, whole duplicate bureaucracies would be eliminated.
What about equalization and shared-cost programs? Politicians justify equalization on the basis that provinces with larger populations and more productive economies can afford a level of public services that other provinces cannot. To compensate for this, the federal government transfers a larger proportion of its tax revenue to so-called "have not" provinces than it does to the others.
But why should the federal government act as the "great equalizer"? This oversight comes with several costs: large, centralized bureaucracies removed from taxpayers' everyday realities, meddling in sectors of provincial jurisdiction and the obliteration of any semblance of accountability in our system.
Consider health care. If inequality is truly a problem, shouldn't the provinces be able to agree on a common standard of care and create a national health-care fund, fully paid for with provincial taxes, that they administer and disburse themselves, without restrictions from Ottawa? Why must we have a Canada Health Act and a federal ministry to do this? And wouldn't it be preferable to hold one level of government responsible for both successes and failures, as opposed to playing the blame game between jurisdictions?
Health care could provide the litmus test for ending unnecessary duplication. In 2014, the federal funding agreement governing equalization and health transfer payments is due to expire. Ottawa will have an important opportunity to restore constitutional integrity to the division of powers in our country -and the allocation of funding.
As the federal government undertakes its program review, it should not only look at how it does business, but what it is doing. With the restoration of political stability in Ottawa, the time has come for Canadians to have an open, honest and intelligent debate about which governments should deliver -and pay -for public services. What better place to start, than by using our own Constitution as a guide?