subsidies

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Over fifty years, observers have become inured to troubling reports of Atlantic Canada's economic difficulties.

Even the most jaundiced observer would recognize, however, that data for the last two years describes something different. The regional economy is not experiencing continued slow decline: it is starting to implode.


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For many years, Ontario has been the quiet enabler for the vast system of subsidies the federal government provides to Atlantic Canada, Quebec and Manitoba. With rare exceptions, it has stood by as equalization grew and as the federal government incorporated subsidies to regions in more and more of its regular programming.

In recent years, evidence has been accumulating that the regional subsidy system is much bigger than it appears on the surface, unsustainable for both Alberta and Ontario and entirely counterproductive because it discourages growth in all recipient provinces.


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Most people wait until December 25th for Christmas presents. Apparently, the exception is Canada’s aerospace sector, recently the recipient of an early-season gift from former federal cabinet minister David Emerson. Emerson chaired a federally-commissioned review of the aerospace sector. The resulting report ostensibly challenges “companies, academic and research institutions, unions and governments” to “understand and adapt to changing realities.”


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For those fortunate enough to travel to Europe this summer, or even some of North America’s older cities, take a good look at the train stations. They reveal much about architecture and cities, but also provide a clue to historic regional economies and the preferences of past travellers.

On a purely visual level, some stations are works of art. For those familiar with New York City, consider Grand Central Station, built in the golden age of rail travel and decorated with Tiffany glass and French sculptures.


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In the 1992 referendum on the Charlottetown Accord, British Columbians rejected the proposed amendments to Canada’s constitution with the highest “no” vote in the country (68.3%). Also in the “no” camp were Manitoba (61.6%) and then Alberta (60.2%). Four other provinces also turned it down and the package barely passed in Ontario.  

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Milton Friedman once said his greatest fear about the 1979 bailout of Chrysler by the U.S. federal government was not that it would fail, but that it would succeed. Friedman didn’t mean he was wrong to oppose it. What concerned him was how Chrysler’s rescue (approved by the U.S. Congress in late 1979 and signed into law by President Jimmy Carter in 1980) might lead some to draw the wrong conclusion: the notion that such actions save jobs, among other illusions.