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Saskatchewan Premier Brad Wall gives an interview in Regina on Nov. 8, 2011. (Liam Richards/Liam Richards for The Globe and Mail)
Saskatchewan Premier Brad Wall gives an interview in Regina on Nov. 8, 2011. (Liam Richards/Liam Richards for The Globe and Mail)

Equalization and EI hurt Saskatchewan, Premier says Add to ...

Saskatchewan’s Premier wants Ottawa to revisit how it parcels out money to the provinces, arguing that equalization payments and the Employment Insurance program are hurting economies that are booming like his.

Bard Wall argues premiers are at a “crossroads” and says it’s time to choose between old and new federalism. His call comes on the eve of provincial meetings in Victoria that will focus on health care and equalization payments.

Mr. Wall is framing his argument in an op-ed piece sent to reporters in which he suggests now is not the time to be arguing “about exactly how much money from Ottawa is required on a given day.”

Not only does he call for more innovative ways to deal with health care, he characterizes the EI program as unfair to his province and criticizes the way in which equalization payments are made because they create “distortions, often of a significant scale, that impair the national economy and discourage people from moving to places of economic opportunity.”

He argues it’s time to for the provinces and Ottawa to “blaze trails that will lead to the far more effective and accountable government that Canadians truly deserve.”

Last month, Stephen Harper’s Conservatives shook up the federal provincial relationship with a surprise move on health-care funding. Finance Minister Jim Flaherty simply dropped a take-it-or-leave-it deal at a meeting with his provincial and territorial counterparts, leaving some provinces stunned and angry.

The 10-year deal, which is not up for negotiation, guarantees the provinces a 6 per cent annual increase in health-care transfers until 2016-2017. After that increases are tied to growth of the nominal gross domestic product, which is a measure of real GDP plus inflation.

“Our federal partners have clearly signaled their intent on health and social transfers and equalization,” Mr. Wall writes. “We can try to change this new dynamic, or focus talks on the path forward to achieving the best results for Canadians. I believe the latter path is more fruitful.”

On health care, Mr. Wall notes that Saskatchewan has tried to innovate by bringing in the private sector in an effort to reduce a surgical backlog. There has been some successes in reducing the wait times as a result, he writes.

Based on his example, he says the discussions in Victoria “must focus on better management of costs and improving results for patients.”

But he also talks about the need to revamp and re-imagine EI and equalization, which he says are unfair to his province. Noting that there is a serious labour shortage in Western Canada, Mr. Wall says his province is, nevertheless, paying for a program that “discourages Canadians from moving here.”

“In some regions , a person can work just over 10 weeks and receive almost a year’s worth of EI benefits,” he notes. “A worker in Regina will work roughly twice as long for significantly less. yet, employees and employers pay identical premiums into this $22-billion a year program.”

The current equalization system, he says, works “to discourage labour mobility in a way that hurts the national economy and ultimately individual Canadians.” It allows “hydro-rich” provinces (he does not name them but Quebec and Manitoba are considered hydro-rich) to subsidize artificially low power bills and it over-states B.C.’s ability to raise revenues from property taxes.”

The premiers meet in Victoria next Monday and Tuesday.

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