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Saturday, Feb. 4, 2006

Dalton's dreams are made of this

Globe and Mail
Wednesday, Oct. 1, 2003

Dalton McGuinty believes that a Liberal victory tomorrow will herald a new era in federal-provincial co-operation.And he thinks a nice way to launch that new era would be for Paul Martin to give his province $1-billion for energy conversion.

We are witnessing a remarkable confluence of personalities at the federal-provincial level. Jean Charest has arrived as a (sort of) federalist Liberal Premier of Quebec, even as Paul Martin gets ready to take over in Ottawa, determined to improve federal-provincial relations.

And within 10 days or so, Mr. McGuinty will be sworn in as Ontario premier, pledged to ending the civil war of words that has characterized relations between Queen's Park and Parliament Hill in recent years.

"The change of personalities creates a wonderful opportunity for the three of us," Mr. McGuinty asserted in an interview. Specifically, he believes it will allow him to move quickly on several fronts currently obstructed by Ontario-Ottawa bickering.

A McGuinty government will strike a deal with Ottawa that the Liberal leader hopes will lead to the construction of 20,000 units of subsidized housing. Ontario will also conclude long-delayed labour market and immigration agreements.

And then, to the considerable surprise of this writer, Mr. McGuinty raised the issue of electricity.

"The federal government is committed to helping Canada meet its Kyoto obligations," Mr. McGuinty said. "Eliminating coal-fired plants will fulfill 75 per cent of Ontario's obligation. We want to work with Ottawa to meet these targets, and we will be asking for federal support."

How much support? "Significant dollars" is all he'll say. However, party officials, speaking for purposes of background, were happy to infill.

The Liberals are committed to shutting down Ontario's five coal-fired power plants by 2007. Environmentally, this is sound policy. Along with carbon dioxide, coal-fired plants emit a broad range of noxious chemicals that contribute to smog.

But Ontario's coal-fired generating stations satisfy almost 30 per cent of the province's electricity demand. Taking them offline will lead to a shortfall of up to 8,000 megawatts of electricity. Talking to reporters earlier this week, Mr. McGuinty waxed eloquent about meeting that shortfall by replacing coal with natural gas, with expanded hydro capacity, and with green technologies such as wind.

In reality, Ontario will probably need to expand its nuclear capacity. In the shorter term, it will need to reach deals with Quebec and Manitoba to import electricity.

But constructing transmission lines for the increased imports would not be cheap, which is why previous Ontario governments nixed earlier deals with both provinces. A rough estimate puts the cost of providing the infrastructure to import 2,200 megawatts worth of electricity from Manitoba and Quebec at about $2-billion. Ontario will be asking the federal government to provide half the financing.

It would be extraordinary if Mr. Martin agreed. After all, the ironclad rule of this federation is that Ontario gives, and the rest of Canada receives. Ottawa will throw money at a declining fishery, and forest fires in the British Columbia interior constitute a disaster requiring federal aid. Even Alberta, the richest place in the country, is deemed worthy of federal assistance in the wake of the mad-cow crisis. But in the past year Ontario has weathered the SARS outbreak and the power blackout, without so much as a dollop of federal aid. Why should anything be different under Paul Martin?

In reply, Mr. McGuinty points to previous Ottawa commitments to help the provinces meet their Kyoto obligations to reduce greenhouse gases. The Liberal energy plan will largely fulfill Ontario's obligation, Mr. McGuinty argues, therefore Ontario is entitled to much of the federal Kyoto funds.

Indeed, last month the federal government did unveil a $1-billion strategy to help move the country closer to meeting its Kyoto targets. But only $321-million of that money was devoted to joint federal-provincial initiatives. Even on a per-capita basis, Ontario would only be entitled to about $120-million of that money. And most federal-provincial programs are skewed to disproportionately benefit poorer provinces.

So there is a small discrepancy between what Ontario wants and what the feds, thus far, are willing to give.

Perhaps the new era of goodwill that arrives with a Martin-McGuinty partnership will overcome these obstacles. Perhaps the rest of the country won't mind if Ontario starts receiving a great deal more federal aid than it enjoyed in the past. Perhaps the Western premiers won't object to a cozy, Liberal-centric entente between Ottawa and the two big provinces.

Or perhaps, plus ça change . . . Application Error

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