Shuffling the money

In the wake of this week's splashy federal budget, a destructive spat is brewing between the wealthier and the poorer provinces.In a dry discussion paper, Ottawa flatly concluded that provinces do not have enough money to fulfill their costly responsibilities, so it opened up talks on how to resolve the problem. Quebec welcomed that recognition, reading the budgetary tea leaves to conclude that equalization payments to the poorer provinces would be increased. Ontario Premier Dalton McGuinty, in turn, forcefully insisted that any new federal money should go into equal per-capita transfers to all provinces and that the equalization program should not be further distorted. That stance may be self-interested, but it is in the longer-term interests of the federation, if only because it is fairer.