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The premiers are about to gather in Halifax as the Council of the Federation to discuss the country's economic situation. No federal representative will be there. Invited to attend Thursday's and Friday's special conclave on the economy, his government's No. 1 priority, Prime Minister Stephen Harper declined.

No one seems particularly surprised or exercised by this decision. Six years after winning power with a platform calling for "a new relationship of open federalism" and a promise to "support the important contribution the Council of the Federation is making" Mr. Harper has held just one lunch session with premiers.

The Prime Minister's intergovernmental agenda has been quite transparent from the outset. He has funnelled loads of new money without debating core powers or roles and responsibilities; capped the rate of those transfers to get a grip on federal funding; moved to an equal per-capita funding formula that benefits Alberta and Ontario, mainstays of the Conservative Party's vote; and directed much of the federal treasury to new personal and corporate tax cuts, national defence, and core federal responsibilities to reduce longing provincial/territorial eyes for more. Oh yes, and no First Ministers Meetings to barter.

The easiest and cheapest form of open federalism is to avoid it all together. Engaging with premiers as a group is not just bad politics and risky financial management, but for the Harper government, quite contrary to how the country should actually be run. The Prime Minister has transmitted his intentions to stick to his own constitutional knitting and basically invited the premiers to do the same.

But the consequences of this remarkably compartmentalized approach to a federation like ours are profound. The country is, paradoxically, to be united by respecting provincial and cultural differences even at the cost of lost national opportunity.

Provinces and territories are not blameless, with predictable calls for more federal money. Yet, they have started to make new strides in doing their own work, together, on health care, energy, and now the economy.

But premiers need to face facts: A "watertight compartment" view of federalism by Ottawa means provinces are being increasingly left to their own devices. They are not now and will not become equal, collaborative partners for a pan-Canadian approach to addressing key economic and social issues any time soon. Ottawa's deficit militates against it and the fiscal transfer regime is now set for a decade ahead. Premiers need to fundamentally rethink their roles and fill in the vacuum Ottawa's approach creates.

Start with the Council of the Federation itself. The Council has never been a true Council of the Federation, of the two orders of government. Ottawa won't play. Premiers should drop the illusory "Federation" and forge a genuine Council of the Provinces and Territories with a more muscular inter-provincial mandate.

Yet, the current council is completely ill-suited to take this on. A neutral, administrative secretariat, it wields no power or authority beyond its membership. Its new role: become the premiers' think tank, knowledge broker, fact repository, and standing advisory body. Give it more staff and money to conduct new research that cuts across borders and powers to study and recommend collaborative measures for a stronger economic and social union. Give it authority and heft to challenge a diminishing federal policy capacity. Make it a standing body for new, innovative thinking. Let it forge partnerships with academic and business, social, and environmental organizations. Make it a resource for regional co-operation too in Atlantic Canada and the West even. Use it to level the playing field with the federal government of the day.

Halifax is the perfect place to start a new conversation on the new federalism reality of today. Premiers have chosen a topic important to most Canadians – the economy. They can drill down on skills and training standards; look to rationalize higher-education offerings; continue to eliminate internal trade and professional barriers; build more effective immigration integration measures; establish regional innovation and R&D clusters; define energy co-operation initiatives; co-ordinate tax rates and incentives, and so much more.

With boldness and vision, here's betting the next phone call comes from Ottawa.

David McLaughlin is a former provincial deputy minister of intergovernmental affairs, former chief of staff to the federal finance minister, and executive director of the Council's Advisory Panel on Fiscal Imbalance.