The Cape Breton Post, June 8, 2007:

The Cape Breton Regional Municipality rehearsed its litany of grievances this week before a Senate committee that found the case interesting if not persuasive. Mayor John Morgan, chief administrative officer Jerry Ryan and economic development manager John Whalley appeared before the national finance committee which is studying so-called vertical fiscal balance among orders of government in Canada.

Morgan and Whalley did all the talking, outlining the case that CBRM’s comparatively high taxes and low service expenditures are the result of the provincial government’s failure to follow through on the constitutional intent behind the federal equalization program. It is “provincial government policy that causes our residents to have dramatically lower service levels while at the same time higher tax rates within the municipal jurisdiction,” Morgan told the senators.

He argued that the principle of equalization as stated in Section 36 of the Constitution obliges both the federal government and a recipient province to track where the money goes so as to ensure that it is being used to reduce disparities. “What is happening in Nova Scotia is the funding is overwhelmingly being forwarded not to the poorest areas of the province but to the wealthiest,” Morgan contended.

It fell to Sen. Lowell Murray, the New Waterford native who retained his Progressive Conservative label after the merger that created the federal Conservative Party, to explain that persuading Ottawa to engage in such monitoring within a province is a political non-starter. “Once the cheque is sent to the provincial capital,” he said, “the federal government does not look behind it. I do not think you would ever find any federal government that would take such a look.”

Murray, the committee member who showed the most interest in the presentation, was more intrigued by arguments that the federal government is neglecting in its constitutional obligation directly by failing to focus its own economic development efforts in the areas most in need of them. He was especially taken with CBRM’s comparisons between itself (pop. 102,000) and Prince Edward Island (pop. 135,000). Total federal development spending in P.E.I. through the Atlantic Canada Opportunities Agency in the last fiscal year was $42 million, versus $19 million in CBRM (including Enterprise Cape Breton Corp.), Whalley said.

Murray noted that the CBRM-P.E.I. argument could not be properly analyzed at one brief sitting of the committee.

Murray, along with Manitoba Tory Senator Terry Stratton, mused about whether some deficiency within the region itself — some lack of private sector initiative, perhaps — could be part of CBRM’s problem. Morgan and Whalley would have none of it. “This is not about individual effort,” said Whalley. “This is about a system of policies and structures that has tilted the whole field.”

Nothing was resolved, of course, but it was a real discussion, free of hysteria and partisan bickering — the sort of discussion of the CBRM complaint that we almost never hear. It’s a pity it had to happen in such an obscure forum so far away. We’ll leave to the bean-counting councillors and letter-writers to tell us now whether the trip was worth it.