Ottawa's Ambitious Agenda to Expand Power

IT WASN'T QUITE what Paul MARTIN had promised. Instead of an uplifting exercise in televised democracy, his summit with the premiers lapsed into behind-closed-doors horse trading.

This article was originally published in Maclean's Magazine on September 27, 2004

Ottawa's Ambitious Agenda to Expand Power

IT WASN'T QUITE what Paul MARTIN had promised. Instead of an uplifting exercise in televised democracy, his summit with the premiers lapsed into behind-closed-doors horse trading. Rather than truly fixing Canadian health care for a generation, the agreement they reached followed the familiar formula of pumping more money into the system, though with the added twist of a new plan for tracking how provinces make improvements. But for a Prime Minister whose political skills were in doubt, and whose policy vision looked fuzzy, the moment was sweet: premier after premier praising his leadership at the end of last week's marathon bargaining sessions. Even better, the payoff might not end with this pact. The Liberals' two other big goals are to create a national child-care plan and deliver a so-called new deal for cities. Like health, both these files fall under provincial jurisdiction - and Martin suddenly has credibility when it comes to cutting deals with the premiers.

That troika of Liberal policy priorities - health, children and cities - adds up to an extraordinarily ambitious federal agenda. If Martin comes close to attaining his goals in all three, any snickering over his "transformative change" aspirations would be silenced. Yet the scope of what he wants to do is not widely understood. Maybe that's because as a speechmaker Martin rarely frames his aims in inspiring terms. Or maybe, to avoid alarming the premiers, he has held back on putting the pieces together: they amount to a permanent federal incursion into increasingly important areas that have always been mainly provincial turf. Those who find fascination in the arcane field of fed-prov relations suspect something momentous is unfolding. "This is a defining moment, I think, on how federalism is going to function," says Tom Courchene, the Queen's University public policy professor widely viewed as a guru on relations between Ottawa and the provinces.

Canadians might be forgiven for suspecting that what experts on Confederation's shifting power balances find momentous might turn out to be a yawn. But in this case, policy matters in real life. Take what happened on health. Martin got the premiers to move toward creating a system that will allow patients to find out how provinces stack up against each other on delivering basic services. If it works, a patient waiting for a hip replacement in, say, Saskatchewan, will be able to easily discover if Nova Scotia has done better in shrinking its wait time for the same surgery - a pan-Canadian comparison scheme that some provincial governments resisted. They finally accepted the accountability Martin demanded for an old-fashioned reason: he paid. The Prime Minister put up $18 billion in new health transfers over six years, well above his roughly $12-billion opening offer. Perhaps even sweeter is the six per cent a year "escalator clause" that will guarantee the federal funding keeps growing.

Health is not the only costly element of the federal agenda. On day care, the long-term price tag could be huge. Last spring's Liberal platform vowed to "ensure that children have access to high-quality, government-regulated spaces at affordable cost to parents." That amounts to an unprecedented bid to take the lead and set the standards in an area previously run almost entirely by the provinces. For cities and towns, the Liberals promised to funnel at least $2 billion in gas-tax revenue to municipalities within five years, and negotiate a series of three-way federal-provincial-municipal agreements designed to give Ottawa a voice for the first time in many aspects of urban development. "I think this all amounts to a bigger vision of where the country is going," says John Godfrey, Martin's minister of state for infrastructure and communities. "All the interesting files have to be collaborative and involve all layers of government."

As the health summit showed, getting that collaboration is easier if you have some money to spread around - and Ottawa has the luxury of multi-billion-dollar surpluses. Yet most provinces remain mired in deficit. Courchene argues that imbalance puts the Liberals in a position to buy a say in responsibilities assigned to the provinces under the Constitution. "Ottawa is using the fiscal imbalance to invade provincial jurisdiction," he says. "That doesn't mean it's not appropriate. Canadians would probably like Ottawa to take more of a role."

Most premiers are aching to win concessions from Ottawa to put them on a more secure financial footing. That was the main reason for creating the premiers' Council of the Federation last year. Until the health summit, though, it wasn't clear if the council had really changed the fed-prov game. But the fact that the premiers stood together through three days of increasingly intense negotiations - including an eye-glazing, nerve-fraying night of pizza-fuelled talks at Martin's 24 Sussex Drive residence - strongly suggests the council is a meaningful new institution. It will make it harder for the feds to follow a divide-and-conquer strategy.

Quebec's Jean Charest signed a separate, though similar, health deal from the rest of the provinces. Martin not only accepted the special terms, he also crowed, "This is really what Canada is all about." Among veteran watchers of these summits, memories of the Meech Lake accord, and the controversial "distinct society" recognition for Quebec that largely led to its downfall, were strong. With that history so palpable, Charest had served notice that he meant to fiercely guard his jurisdiction. "What is the role of the federal government in health care?" he said. "Its role is to fund, based on the values set out in the Canada Health Act."

But Martin managed to assert a role somewhat beyond merely being banker to the provinces. The premiers agreed to come up with ways to measure access to doctors and procedures, on a comparable basis, by the end of next year. By the same time, they will institute benchmarks for acceptable waiting times for cancer and heart procedures, diagnostic imaging, and joint replacements and sight restoration. Targets to achieve those benchmarks will be set by the end of 2007, the provinces will report every year on their progress toward meeting them, and the Canadian Institute for Health Information will produce a national report on shrinking waiting times. And beyond the waiting times issue, the Health Council of Canada, established late last year, will report on all elements of the health deal, which includes a range of other commitments, from boosting the number of doctors to improving home care. Ottawa will not penalize a province that lags behind the pack, leaving it to a better informed public to apply the pressure to perform.

Some observers dispute how significant the deal really is. Alberta Premier Ralph Klein, who attended only the first day of the three-day summit, sniped afterwards from Edmonton that the meetings failed to address the toughest issues. "The whole conference was about money, nothing else," he said. "There were no conversations relative to innovative and imaginative ways to deliver health care." Still, the fact that premiers of all partisan stripes signed on with no qualms made it hard to deny Martin his moment of glory. Even the opposition leaders voiced muted approval. "In general," said Conservative Leader Stephen Harper, "this is a deal that the Conservative party can easily support." NDP Leader Jack Layton mildly complained that the deal was silent on the future of private, for-profit health care.

That doesn't mean Martin can expect smooth sailing as he tries to move on to the next two big items on his agenda, cities and children. Cities could be the easier file to chart progress on. Godfrey hopes to hammer out agreements with several provinces before the end of this year that would see a slice of Ottawa's gas-tax money flow to municipalities after next year's federal budget. British Columbia, Alberta, Saskatchewan and Ontario have asked to be early signers. "The first deals will tend to set the template, but there has to be flexibility to reflect the different provincial priorities," Godfrey said. The plan is to earmark new money mainly for transportation infrastructure. Beyond that, negotiating many three-way federal-provincial-municipal deals is his other key objective. "In a sense," he says, "the gas tax is the most concrete part of the new deal, but the long-term story is going to be these new tripartite relationships."

The child-care strategy looks more likely to generate significant controversy. Social Development Minister Ken Dryden, hockey legend but political novice, has been handed the tough task of making good on the Liberal campaign promise to set up a national program. The party ran on a vow to pass legislation to make sure child care is universal, affordable, staffed by qualified professionals, and provides learning along with care. To get funding, provinces "will be invited" to pass their own laws to implement the federal government's aims. While Dryden has so far kept a low profile, daycare advocates were encouraged by the Liberal platform. "I was very impressed," says Martha Friendly, coordinator of the University of Toronto's Childcare Resource and Research Unit, although she cautioned: "You can't set up a program that's universal overnight."

Others will be less enthusiastic. So far, the health deal has mainly been seen in isolation. The government's Oct. 5 Speech from the Throne could change that by drawing attention to the broader strategy. Already those who oppose widening the federal sphere of influence are growing alarmed. Barry Cooper, a University of Calgary political science professor, argues the problems plaguing Canada's health system derive from the way Ottawa stifles innovation by forcing provinces to follow its principles to qualify for funding. He fears the same thing will happen to cities and child care. "We've seen what centralized health care has given us - the Canada Health Act is the problem, not a model for solutions," Cooper says. "If there is going to be a Canada Cities Act, or a Canada Early Learning Act, the same thing will happen - a disaster."

Hard-edged criticism of that sort was not heard much in the afterglow of last week's health agreement. But if Martin really means to keep extending Ottawa's influence, he'll have to brace for real resistance. That's the problem with proving he can deliver a deal: it's bound to awaken those who won't want him to do it again.


Maclean's September 27, 2004