It's about keeping Quebec happy, Ontario not too unhappy

Québec - prochaines élections 2007

Okay, now the fall political season starts in earnest. Enough shadow boxing. Let's get to the main event. What we might call the Great Triangulation will be central to the Harper government's fall agenda.
The Great What?
The three players - it does take three sides to make a triangle - are Ottawa, Ontario and Quebec. For the purposes of this triangulation, the Western provinces don't count. Neither do the Atlantic ones.
Why? Because Harperites already have the West locked up politically, and there aren't enough seats in Atlantic Canada to make the difference between a minority and majority. The Great Triangulation is essentially about keeping Quebec sufficiently happy that the Charest government can get re-elected, but not making Ontario so unhappy that the McGuinty government can credibly run against Ottawa.
Put another way, the Harper Conservatives need more seats in both Quebec and Ontario, and have the cash to try to bribe electors in both provinces. How to structure the bribes so that Quebec is sufficiently happy, whereas Ontario will not be grossly unhappy, is the essence of the Harper challenge.
Quebec, as we know, invented something called the "fiscal imbalance," a fancy phrase for Quebec not having enough money while Ottawa had too much. The essence of the Quebec demand: Hand over more cash, preferably through equalization increases.
Ontario, as we know, balked. Higher equalization wouldn't come from the Ontario government, since equalization is a federal program, but from Ontario (and Alberta) taxpayers. Those taxpayers, claimed Ontario Premier Dalton McGuinty, are already being squeezed by the entire fiscal transfer system.
What to do? Mr. Harper declared in the election campaign that he would fix this non-problem with a long-term solution based on "principles." His own Finance Minister, James Flaherty, upon entering the ministry thought the whole fiscal imbalance a crock. He hasn't changed his mind.
Mr. Flaherty has therefore been well pleased at meetings with his provincial counterparts and in media interviews to debunk the "fiscal imbalance" idea, or at least to lower expectations. This he did on instructions from the Prime Minister's Office, where the realization dawned (too late) that the government risked becoming prisoner to inflated expectations it had contributed to creating.
Happily for Ottawa, the premiers fell out among themselves on the "fiscal imbalance" at their grandiose confab in St. John's. Rather than facing a united front, the Harper government confronts a group of mewling premiers who can't agree on the definition of a "fiscal imbalance," let alone a solution.
This predictable provincial disunity leaves Mr. Harper lots of running room to craft a solution that will keep Quebec happy and Ontario not terribly unhappy. And last week, the PM pulled the plug from beneath an election promise to hold a first ministers conference on the "fiscal imbalance."
The Charest government is nothing if not stunningly brazen. A few weeks ago, it announced more than $300-million in spending for postsecondary education. That Quebec doesn't have the money mattered not, the ministers explained. It would be coming from Ottawa eventually, even though Ottawa has said nothing publicly. Spending somebody else's money before the money is announced could have something to do with pre-electoral politics in Quebec, and Premier Jean Charest's understanding of the emerging triangulation.
Quebeckers believe a fiscal imbalance exists. It's a myth, impervious to rational analysis, but almost universally believed. Because the myth is believed, it must be so, and because it is so, Mr. Harper must act - for his own political sake and that of Mr. Charest.
Quebec and other equalization-receiving provinces will get additional funds. Ontario will be peeved, but Ottawa will also announce more money for postsecondary education on a per capita basis. This change will please Ontario, whose government correctly thinks that most federal money is distributed in ways skewered to help poor provinces rather than on a straight-up, per-capita basis.
By adding the extra money for equalization, and the postsecondary cash - the sums Quebec has already announced - the Charest government can claim that it extracted a tribute from Ottawa sufficient to warrant re-election.
By getting more money for equalization on a per-capita basis, the McGuinty government, while not being happy, will at least receive something.
The Harper government, sniffing for votes, can insist it has spread around enough money to satisfy the demands of both provinces and should, accordingly, be politically rewarded. It's called the Great Triangulation.

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