Strategy

Meeting of the ministers

Canada's premiers get ready to sit down with Stephen Harper to talk economy.

When Prime Minister Stephen Harper meets with his provincial counterparts on Ottawa on Thursday and Friday, you can bet the economy is going to top the agenda, if it’s not the only issue on it.

Unlike past First Ministers’ meetings, which often sees the country’s premiers asking the federal government for money and more attention, this year’s conference should be one of the most focused and more collaborative sessions since the different levels of government started meeting in 1906.

“The economy forces these governments to play straight,” says Andrew Steele, a senior consultant at Toronto-based StrategyCorp. “Usually it’s like herding cats, but this time they’ll come in looking for a deal rather than make political points.”

The main topic of conversation will likely revolve around infrastructure spending — one of the main ways that governments can directly help kickstart a flailing economy. If people are building roads and hospitals, jobs can be saved and even created. The problem, however, is that these types of projects are mired in red tape, which makes it extremely difficult to speed up a much-need development.

“Infrastructure spending is good for the economy over the long haul, so if you can accelerate it and do it sooner, that would be positive,” says Craig Alexander vice-president and deputy chief economist with TD Bank. “But if you want this to be a fiscal stimulus you’ll need to speed up projects you already had planned because it takes time to do environmental assessments and draw up plans.”

It’s likely the premiers and the prime minister will try to figure out ways to cut through the red tape, but that’s easier said than done. Steele points out that environmental assessments, which often take up a lot of time, can cost a political party major points if not done correctly.

“In a lot of cases this involves people saying they don’t want a subway running through their backyard,” he explains. “That’s a legitimate complaint with political consequences.”

Besides figuring out a way to get projects done faster, the various governments will also want to share what types of infrastructure spending they’re planning and how the federal government can support them.

Since every province has different needs, it’s not enough for Harper to suggest that every province upgrades its bridges. “The types of projects would be different from province to province,” says Alexander. “So they’ll have to talk about how to coordinate fiscal policy on federal and provincial levels. They’ll also want to make sure one group’s initiatives aren’t conflicting with another group’s.

“The answer is that federal and provincial governments should provide some stimulus,” adds Alexander. “The question is, though, what regional policies will have the most desirable impact?”

Employment insurance

Infrastructure spending won’t be the only economy-related topic on the agenda. Steele says a big issue today, especially with so many layoffs, is the speed at which people can start collecting employment insurance.

“There’s a lot of paperwork with EI and a lot of nuances to the way it works in different provinces,” Steele explains. “But everyone is in agreement that the process needs to be streamlined so people can get insurance faster and get it when they need it.”

The challenge, though, is that the provinces aren’t on the same page as to how they can create similar rules across all jurisdictions. For example, people in Ontario and Alberta get less EI and for a shorter time period so “that inequity could be a stumbling block,” says Steele, “but all the provinces are committed to making the process easier, so that’s where they’ll focus their attention.”

If these other issues are taken care before the meeting ends, the idea of a single regulator will likely pop up — especially since the Expert Panel on Securities Regulation recommended that the government implement one person to oversee the financial industry yesterday — but there’s wildly dissenting opinion on this topic. With Ontario, B.C. and Nova Scotia interested in a single regulator and Alberta and Quebec vehemently opposed to one, it’s unlikely this long-standing financial issue will get resolved any time soon.

Will anything else be discussed at the First Minister’s conference this week? “Probably not,” says Steele. “It’s going to be the economy, almost exclusively.”