The provinces have been severely impacted by the failure of Federal Governments to tax fairly in order to maintain the equalization system created after the Second World War to ensure that all Canadians enjoyed a similar level of services, no matter where they lived. Additional programs developed through the Sixties, above all Medicare, were designed to achieve a healthy and well-educated population that offered business an efficient work force.

The failure of the Trudeau Government to obtain more financial resources at the beginning of the Seventies left it more and more unable to support the new programs. The transition to Established-Programs Financing without any strings attached left provincial governments free to use the funds without regard to Federal intentions. Prime Minister Trudeau may have intended this to be the case, given Québec’s desire for provincial control of social programs.

As the Federal Government’s deficits grew and the Provinces were required to observe the Canada Health Act, the pressure on Provincial budgets became more and more severe. Other areas, such as education, could not be financed properly. The universities began to worry about the maintenance of buildings while students paid ever higher tuition fees and faculty numbers began to stagnate together with the rest of the economy.

The Chretien Liberal Government intensified the problem in the Nineties. Determined to wipe out the budget deficit that had developed through the preceding twenty years, Finance Minister Paul Martin resorted to draconian measures (never more obvious than in his seizure of the Unemployment Insurance Commission fund to reduce the deficit, despite the fact that this was money employees and employers had amassed to help the unemployed). Martin chose “structural adjustment” over fair taxation.

Martin also abolished the Canada Assistance Plan, which had been providing a social assistance framework for thirty years. Given this decision, one can understand a little better the viciousness of Mike Harris’s “Progressive Conservative” Government in reducing social assistance rates in Ontario as one of its first actions in 1995. The failure of the Eves Conservative and McGuinty Liberal Governments to improve matters for the poor over the next two decades compounded the devastation!

Other budgetary needs have become ever more difficult for Provincial Governments from coast to coast—and the Territories, too. As Medicare costs grow, other expenditures are held steady if they do not actually fall. In area after area, the mass of Canadians experience ruination. The economy stagnates, as has been noted above, and the society begins to come apart. Inequality grows in our country almost as much as in the United States and far more than in the advanced countries of Northern Europe.