By Heather Scoffield
Without federal-provincial co-operation, Ottawa doesn’t meet its climate targets.
With out federal-provincial co-operation, provinces don’t get the right help they need in the next economic downturn.
Without federal-provincial co-operation, Ottawa can’t negotiate a national pharmacare program.
Without federal-provincial co-operation, provinces won’t get the infrastructure funding they have been counting on.
In each case, Canadians — who all live simultaneously in the federation and in a province — pay the price. And it’s why federal Liberals and provincial Conservatives, at least some of them, are slowly realizing they need to be generous with each other as they question each other and the state of the federation.
On the surface, it’s been a rough several days.
As the newly elected federal Liberals scrambled to figure out how to deal with the fact that no Liberals were elected in Alberta and Saskatchewan, premiers of both those provinces started laying down conditions.
Saskatchewan Premier Scott Moe immediately issued a terse list of demands, calling for an end to Justin Trudeau’s carbon tax regime, changes to the federal equalization program and a working pipeline.
Alberta Premier Jason Kenney followed up quickly with his own slightly different list, demanding action on the Trans Mountain pipeline, changes to equalization and an overhaul of the federal legislation that assesses resource development projects for their environmental impact.
Not a great start for the new government-in-waiting in Ottawa.
On Tuesday, even as Trudeau named former Liberal cabinet minister and Edmontonian Anne McLellan to his transition team to pave the way for a better conversation with the West, Kenney was busy stiffening his anti-Ottawa rhetoric in a post-budget speech in Edmonton.
The Alberta premier called federal-provincial fiscal arrangements “fundamentally unfair,” threatened to trigger a constitutional review of equalization if the federal government continues to sell the province “down the river,” and blamed federal policy for billions of losses of oil revenue.
But there seems to be at least the possibility of a less acrimonious relationship in the future.
On the federal side, McLellan’s appointment has signalled a serious willingness to work more closely with the West.
On the provincial side, even as Kenney was trash-talking Ottawa on Tuesday, his environment minister was more quietly rolling out changes to the rules for large, industrial greenhouse gas emitters — and the changes are in the direction that the federal Liberals could take some heart in.
In response to pressure from international investors who want to see more emissions reductions in the oilsands, Alberta will backtrack on some of the slackening of the rules that Kenney had campaigned on just a few months ago, keeping many of the previous NDP regime’s rules on industrial emissions and coal intact after all.
In his speech, Kenney also indicated that he was not angling for an end to the equalization system that sees the federal government top up have-not province’s revenue so that they can provide government services of the same quality as the national average.
Rather, he could make do with a lifting of the cap on the federal fiscal stabilization fund meant to help provinces dealing with a sudden downturn, and some retroactive money from Ottawa.
Kenney mentioned that $1.3 billion would be about right.
And there are many ways a new federal government could find to send some money to Alberta in the name of environmental progress and technological innovation.
And, while Alberta is still asking for some deep changes to Ottawa’s new federal environmental assessment framework, the provinces are watching closely to see how adeptly the new framework will handle its first proposal: the proposed Frontier oilsands mine project in northern Alberta.
Coupled with some concrete signals that the Trudeau government will get the TMX pipeline in working order, all sides just might be able to muster the political capital to occasionally work together — or at least not work against each other.
Because, beyond the Conservatives’ anger and the Liberals’ climate plans is an understanding that the federation needs quite urgently to figure out how to function better.
From the federal perspective, several key election promises hang in the balance.
Without aggressive innovation from the oil and gas sector, and Alberta’s concerted crackdown on coal, the Liberals have little hope of meeting their election commitment to move to net-zero emissions by 2050. The carbon tax and related measures on their own won’t get us there.
And Ottawa would find it next to impossible to negotiate affordable progress on pharmacare if it remains at loggerheads with every province headed by a Conservative.
The provinces need Ottawa, too, of course. Ottawa alone has the fiscal capacity to funnel money quickly through the provinces down to communities when the inevitable economic downturn is upon us.
Ottawa also holds the purse strings for big new rollouts in infrastructure, 5G and plans for connecting energy sources across the country.
The ingredients are all there.
Heather Scoffield is a columnist with Torstar Syndication Services.