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John Ibbitson: Harper’s 2013 budget courts confrontation with provinces

Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill on March 19, 2013.

CHRIS WATTIE/REUTERS

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The years of peace and quiet are over.

With its root-and-branch reform of job-training programs in Thursday's federal budget, the Conservative government is courting confrontation with the premiers. It is also determined to proceed with a national securities regulator, despite provincial opposition.

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First-nations leaders will be enraged by a new workfare-style program for natives on reserves.

And the Conservatives are risking a public-service strike, by demanding an end to bankable sick days.

Stephen Harper is willing to wage these wars because he believes he must. And because he believes he can.

For seven years, the Prime Minister has boasted of unparalleled peace on the federal-provincial front. No tortuous constitutional negotiations. No interfering in areas of provincial jurisdiction. No first ministers summits on health care, the environment or pretty much anything else.

No more.

The Harper government is fed up with handing over job-training money to provincial governments that then fail to train unemployed workers to fill job shortages.

Starting in 2014 and progressing over the next few years, Ottawa will replace existing programs with job grants for employers who are willing to pony up money to train workers. The employer contribution will be matched by federal and provincial contributions.

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Provinces will lose the ability to tailor job training to their own priorities, being dragooned instead into the new federally-directed program. How do you expect Quebec Premier Pauline Marois will react?

How will Alberta Premier Alison Redford respond to Finance Minister Jim Flaherty's determination to create a national securities regulator? The new regulator, according to the budget, will have a limited mandate to "monitor, prevent and respond to systemic risks emerging from capital markets."

But provinces that claim that securities regulations fall into their bailiwick will still see the new regulator as an encroachment, and they'll be right.

The government's moves to create on-reserve workfare could produce an explosion easily the equal of Idle No More. Reserves seeking access to job training funds will be compelled to impose a type of workfare as a condition of receiving Income Assistance.

The government is also determined to move forward with reforming education on reserve, through a First Nations Education Act, despite stiff opposition from many chiefs.

Those chiefs will be infuriated by this federal intrusion on their sovereignty. And they will fiercely resist being compelled to train those living on reserve to integrate into the larger Canadian economy.

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In past years, Mr. Harper actively courted co-operation with native leaders to improve aboriginal graduation and employment rates. But he appears to be abandoning the carrot in favour of the stick.

With the public service, the budget is best read between the lines. Promises to reform "disability and sick leave management" mean asking unions to negotiate away bankable sick days–which cost the government a great deal of money– in favour of a short-term disability benefit.

The leadership of the Public Service Alliance of Canada has ruled out even discussing the idea. The chances of a national public servants' strike have become tangible.

The Harper government is halfway through a majority government mandate. After years of extreme fragility, the economy is slowly improving. Last year's round of wholesale jobs-and-spending cuts have largely worked their way through the system.

There is time for one more round of substantial reform, before election preparations trump any policy agenda. Stephen Harper and Jim Flaherty have decided that reducing unemployment and encouraging growth through job training, some of it mandatory, while further reining in the costs of the public service is the way to go.

Those reforms could lead to federal-provincial fights, strikes and fresh native protests.

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But Mr. Harper must believe that voters will ultimately reward, not punish, his government for the aggravations to come. We'll see.

John Ibbitson is The Globe's chief political writer in Ottawa.

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