ASYMMETRICAL FEDERALISM

I can barely pronounce the words, but the term "asymmetrical federalism" is certainly cause for concern. It means that all parties of the Canadian federation do not have to abide by the same rules to fully participate in federal funding for "national" programs. National programs are supposed to treat all participants equally, regardless of provincial locale. But that is not necessarily so, according to asymmetrical federalism. The term most recently came to prominence in the September 20 communique from the meeting of Prime Minister Martin and the Premiers on health care. As "The Hill Times" said, "in the end, Martin's summit produced not the promised landmark agreement on medicare but a watershed in federal-provincial relations. The communique spells out that 'asymmetrical federalism allows for the existence of separate agreements for any province."

Asymmetrical federalism gave Quebec a waiver from the accountability sections of the health care accord even though all other provinces must comply. Prime Minister Martin "described the emergence of a side deal for Quebec as a response to the province's distinctiveness." This side deal in the national health care program marks a very sharp expansion of special status for Quebec beyond the traditional realms of culture and education. But that is not the issue. The issue is that in the name of asymmetrical federalism (or provincial uniqueness), nationally funded programs do not require equity of treatment or delivery or program or result.

This concept that national programming permits 'different strokes for different folks,' although specifically mentioned in relation to health care in this instance, has enormous implications for agriculture. At the very least, asymmetrical federalism illuminates major flaws in the recently signed Agricultural Policy Framework (APF), especially the Business Risk Management (BRM) pillar dealing with safety net programs.

The architects and marketers of the APF were adamant that the philosophical cornerstone of the BRM pillar was "equity of treatment for all Canadian farmers." Regardless of where they farmed in Canada, all farmers would be treated the same under federally funded national safety net programs within the new APF In the name of national equity, the BRM salesmen, both federal and provincial, insisted that federal funds could only be used for two safety net programs: the Canadian Agricultural Income Stabilization (CAIS) program; and Production Insurance (PI). In the name of national equity, all other programs would be ineligible for federal funding. In the name of national equity, all other programs that had been developed and jointly funded in response to distinctive provincial conditions or sectoral circumstances would be terminated.

In Ontario, the BRM salesmen insisted that the Market Revenue Insurance (MRI) program end because it was not a national program available to all Canadian farmers. We were told that 'companion programs' unique to a specific province (such as MRI) had to end in order to achieve national equity as required by the APE Now, magically asymmetrical federalism makes clear that national equity as a requirement to access federal funding for national programs is not, and likely never was, a valid argument. Asymmetrical federalism makes clear that provincial uniqueness is not only permissible within national programs, but is to be promoted! Asymmetrical federalism makes clear that the true limiting factor is political will on the part of the province to maintain distinctiveness. Quebec obviously exudes that political will. In other words, asymmetrical federalism makes clear that MRI was terminated not because of legitimate national program funding requirements, but because of a lack of provincial political will to retain it.

Why is the loss of MRI of concern? Although far from perfect, MRI was the only program offsetting the prime source of financial risk in the Ontario grain and oilseed sector: the chronic artificial depression of price caused by U.S. subsidies. When our prices collapsed due to policy impacts from south of the border, MRI responded. Even the most vocal proponents of the BRM/APF admit that the new CAIS program does not, and was never designed to, offset the long-term injurious impact of U.S. policy decisions such as subsidies or border closures. In the name of national program equity, provincially distinct programming was terminated. Asymmetrical federalism makes that rationale a sham.

But the concept is also an opportunity. Ontario can no longer hide behind the federal government's unwillingness to participate in specific programs such as "production value insurance." Ontario can introduce such unique options and still access federal funding in the name of asymmetrical federalism ... if it has the political will.

There is more cause for concern. Under the BRM/APF, in the name of national equity, all provinces must put up 40 cents in order to access the full 60 cents of matching federal funding to cover every $1 of cost. Asymmetrical federalism means that is not necessarily so. The Prime Minister himself said, "asymmetrical federalism allows for the existence of separate agreements for any province." Under a separate deal within a national program, if a province (Saskatchewan) were to claim poverty (which it has) and declare that it will only put up 10 cents (which it has declared), it will still be eligible to attract the full 60 cents from Ottawa rather than only 15 cents as under the 60:40 formula of the BRM/APE Saskatchewan could receive 4 times the ratio of federal funding as other provinces. Ontario government officials say not to worry, Saskatchewan will have to balance out at 60:40 over the 5 years of the APF. That is not mathematically nor fiscally probable because Saskatchewan already has a $500 million crop insurance deficit. Of course, under a special deal within a national program, that too could be forgiven.

Asymmetrical federalism is both a concern and an opportunity, assuming there is the political will to ensure provincial uniqueness.