Ontario premiers have harrumphed periodically about Ottawa since Oliver Mowat beat up on John A. Macdonald in the 1880s.
Ontarians reacted indifferently to these complaints. They kept voting for federal governments being attacked by the premiers, because, after all, Ontarians figured they ran both governments. Queen's Park was "their" government, but so was Ottawa.
Consider, therefore, Premier Dalton McGuinty's complaints, and the retorts from the Harper government in Ottawa, as part of a "been there, done that" yawn. Except the context is different, and thus so might the political consequences.
Ontario premiers bellyached before when the province's economy hit the skids, as Mitch Hepburn did during the Depression and Bob Rae during the 1991-92 economic downdraft. But even in those tough times, Ontario still seemed better off than almost everywhere else in Canada.
And when Canadian times were good, Ontario usually benefited more than other regions. So Ontario really didn't have all that much to bitch about: in statistical fact, and in the eyes of other regions.
Now, however, some structural changes are eating away at Ontario from outside Canada and from the fiscal arrangements of Confederation.
Ontario took a pasting in the 1970s with the spike in oil prices. Those prices eventually settled back, and its prosperity resumed. Today, there's no chance oil prices are going far lower, not with world supply and demand so finely balanced, and with huge countries driving up their demand.
Ontario has to absorb whatever the world price offers. Within its own grid, Ontario will be going nuclear, a very expensive option, and, to a lesser extent, using renewables that require subsidies.
So a basic element of the cost of production in Ontario - energy - has risen and will continue to rise at rates higher than inflation, without the government benefiting, as in oil-producing places.
Then there's the Canadian dollar. The whole country floated on a magic carpet of a low, sometimes very low, dollar vis-à-vis the U.S. currency from the late 1970s until recently. Now, the currencies' strengths have changed. Given the chronic U.S. trade deficit, America's insatiable appetite for imported oil and its massive international indebtedness, the U.S. dollar is likely to continue to sink.
It's hard to imagine our dollar falling even faster than the greenback, although the gap in productivity between Ontario and the U.S. cries out for a lower loonie. Then there are offshore pressures from low-wage, polluting countries such as China and India.
Energy prices, the dollar, productivity gaps and offshore competition mean structural trouble for Ontario's economy - more sustained trouble than the province has seen.
To this mix are added the fiscal burdens of Confederation: the massive fiscal flows from Ontario to Ottawa and, through it, to other parts of Canada, notably the five easternmost provinces. Those flows occur in all sorts of measurable ways: the unemployment insurance system, equalization, where Ottawa taxes and spends, immigration programs, even health care.
When Ontario was cock of the walk economically, it could carry this cost and carry on, although the cost stealthily accumulated in an infrastructure deficit and provincial budgets that, until recently, were mostly in deficit. Now Ontario faces the whammies of international pressures, the loonie and the straitjacket of fiscal federalism.
Other provinces, most notably Quebec, can find allies in a fight for new arrangements. No federal government can resist Quebec pressure that comes from the possible separation threat and Quebec's ability, unlike Ontario's, to mobilize its interest groups and parties around a cause.
Ontario, viewed with suspicion everywhere in Canada, has no natural allies, and no marriages of convenience. The West, now richer, suspects Ontario for historic reasons. Quebec (wrongly) thinks Ontario still gets the best deal from Ottawa. The Atlantic provinces, as the poorest in Canada, know that less from Ontario taxpayers would mean less money for theirs. So these provinces axiomatically refuse to consider any lessening of Ontario's burdens.
Ontario, therefore, is caught between threatening external forces and pinching domestic arrangements, both of which hurt the province that was once, but is less and less, the economic engine and financial milch cow of the country.

