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Jeffrey Simpson (Bill Grimshaw)
Jeffrey Simpson (Bill Grimshaw)

Jeffrey Simpson

Alberta and Quebec, the axis of provincialism Add to ...

If holding the G20 in Canada does nothing else domestically, apart from provide an easy target for cost excesses, the summit might demonstrate how the world has changed and how Canada's role in it has necessarily shrunk.

India, Brazil and China were scarcely on Canadian radar screens as economic competitors 10 or 15 years ago. These countries and others will loom larger as time goes on. In other words, the world's economy is a more competitive place, and that old, comfortable way of doing things will guarantee only our slow decline.

Put another way: Canada has to realize how small it is becoming, a country of 33 million far away from any market other than the faltering United States. In the world of tomorrow, Canada will need to husband whatever economies of scale exist within the country. Balkanization is a recipe for decline.

Which bring us to a national securities regulator. Every other major industrialized country has one for the whole country, not one for every constituent part of the country. To do otherwise is to impose additional costs of doing business in a country that needs to underscore its competitiveness internationally.

A pile of studies has recommended one regulator, but previous federal governments balked in the face of provincial recalcitrance. Now, finally, the federal government, with a Prime Minister from Alberta, is pushing ahead with a national regulator. For this, the government deserves kudos.

Predictably, however, there are small-minded governments in Canada on whom the realities of the world have not yet dawned. Quebec and Alberta want no part of a national regulator. They like the existing system of 10 regulators with a "passport" for moving from one provincial system to another.

The very word "passport" illustrates the absurdity of this system. Passports are for travelling between countries, not within them.

The Harper government, sensitive to provincial dissent, has agreed to refer the constitutionality of a national securities regulator to the Supreme Court. Courts are unpredictable, so it can only be hoped that the justices will understand the way of the world, the jurisprudence that enlarged the Interstate Commerce Clause in the United States, and rule in favour of the federal government.

If Quebec and Alberta lose and continue to insist on playing small ball, let them. They will be the losers as the world evolves. Over time, their parochialism will seem increasingly anachronistic.

Ottawa could offer to establish offices of the national regulator in Montreal and Calgary to deal with local concerns, but if that doesn't satisfy them, Ottawa should proceed anyway.

Alberta's opposition to a national regulator is part of the provincialism on display this week in the national discussions over pensions. Nearly every other province (Quebec is on the fence so far) wants to proceed with raising premiums to produce stronger pensions, with details to be worked out.

But Alberta treasurer Ted Morton said no, because higher premiums would be a form of tax.

The province's previous finance minister was touting a voluntary, add-on private investment plan for the Canada Pension Plan. As we see with the Registered Retirement Savings Plan, only a minority of Canadians participate. If you want more secure pensions, the best way is higher contributions from employees and employers, and good returns from the CPP Investment Board.

Another idea to help the CPP's long-term solvency would be to raise the retirement age, as almost every industrialized country has done. But ministers here are apparently too afraid of the public reaction, which is a pity, really, since Canadians are living so much longer than when the national plan was negotiated in the 1960s.

In any event, Alberta is not with the majority of provinces, and disagrees with the federal government led by an Albertan Prime Minister.

Whatever the substance of Alberta's arguments (and they are weak), they are partly explained by the political fact that Alberta's Conservatives are being harried by the upstart, even more right-wing Wildrose Alliance. It's always been the case in Alberta that bashing Ottawa never hurt any provincial government, especially one in political distress.

This time, though, Alberta finds itself alone in the West and allied only with Quebec - by definition an unstable, fabricated marriage of convenience.

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