There Is A Federal/Provincial Conflict Brewing

When you look at how we are organized politically, you discover that specific duties have been assigned to the federal government and others to the provinces or states. That makes some sense from an organizational standpoint. The federal government is likely the one you would choose to provide military, establish and control the border, negotiate with foreign countries, and establish oversight for national industries like banks.

The provinces and states have duties too. Education, roads, healthcare, some welfare programs, and police among them.

The allocation of duties creates a problem that many people, certainly me, have failed to notice. If the government charges more than they need to do their duty, what can we do? What will they do? Save it? Hardly.

Tax space

There is a limit to how much tax people will give up to governments. What if the federal government takes in more than they need to carry out its duties. It is exactly as if you gave a teenager far more money each month. They waste it. When anyone has more money than they need, they find ways to spend it.

The federal government carries it a step further. Once they notice the provinces are short of money, they can use their extra funds to increase their power. Here we have a program that pleases us for whatever reason. We want you to adopt it regardless of whether you think it is worthy or not. Her is some money to help you with it or maybe to shore up your healthcare problem.

Money is power.

The question

Does anyone know how much the federal government needs to carry out their assigned tasks? What would happen if they had to justify all their spending based on a constitutional assignment of tasks? My guess, and it is a guess, is that such an audit would uncover many programs that are not within their list of duties. Some of those programs are likely worthy in some way, but would the provinces do them if they did not exist otherwise?

It is not easy to assess what is allowed and what is helpful.

As an example, should the federal government be responsible for doing environmental and other assessments of new oil projects in Alberta? Is the response to climate science in their realm? I doubt what they do will have a measurable impact on the CO2 content of the atmosphere, yet they spend a lot of time talking and virtue signalling. . Why are they doing it, then? Is it to give them the ability to decide what should happen and aggrandize themselves simultaneously.

Their activity regulating this sector is beyond rational. Is it reasonable in your mind that a potential investor might spend a billion dollars on studies and approvals before giving up? New pipelines? Be serious; we are climate warriors. Businesses take a look and say, “Pass.”

A more pragmatic approach might be to notice that natural gas and oil will be with us for a very long time. That being the case, would it not make sense to make it as efficient as possible? Did you know that if all the combustion uses of oil and gas were eliminated, 70% of the production would still be necessary? Making it less efficient to take out the reserves is costly for all of us.

Alberta and Saskatchewan are exploring other options. Both are in the study stage of taking back their provincial powers. We could expect them to join Manitoba to build an ocean port on Hudson’s Bay.

The bit to take away.

If the federal government wanted to do the best for us, they would not spend more than they needed to accomplish it. Having extra money is a blessing for those who value power. The provinces then come out with too little money and are then subject to the federal government playing power games. P.J. O’Rourke seems to get it. “Giving money and power to government is like giving whiskey and car keys to teenage boys.”

 


I build strategic, fact-based estate and income plans. The plans identify alternate ways to achieve spending and estate distribution goals. In the past, I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software startup, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning and business matters. I have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, and Banks – from CIBC to the Federal Business Development Bank.

Be in touch at 705-927-4770 or by email at don.shaughnessy@gmail.com.

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