Robert Bourrassa once coined a term that defines everything that is wrong with the way this federation “functions.” He called it “la federalisme rentable,” which is usually translated as “profitable federalism.” But the french version is better, because the word “rent” captures the extractionary, illegitimate, and cynical aspect of what is going on. For economists, “rent seeking” is the practice of cutting yourself a bigger slice of the cake rather than making the cake bigger. Classic examples of rent-seeking include extortion, protection rackets, cartels, and regulatory policies that generally benefit the lobbyists at the expense of taxpayers or consumers or some other rivals. Unlike profit, which is consistent with growing more wealth for everyone, rent-seeking activities impose large deadweight costs on an economy.
The Canadian federation is essentially made up of rent-seekers, people who are happy to use the country as a mechanism for extracting a larger share of the pie, but who don’t really contribute much toward making the pie any larger, or even any sweeter, for the rest of us. Bombardier is a classic rent-seeking company, but there are dozens, if not hundreds, of others. Other rent-seekers include entire industries (e.g. dairy production), provinces (Quebec), and regions (the Atlantic provinces). The current idiocy going on between Newfoundland and the Federal government only proves the point. Today, “Newfoundland and Labrador’s premier ordered the removal of all Canadian flags from provincial government buildings Thursday in retaliation for an offer from the federal government on offshore royalties he calls a ‘slap in the face.'”
Ignore the question of who is right and who is wrong, and just think about what this means for a second. For Danny Williams (and the majority of callers to Newfoundland talk shows who agree with his actions), Canada is literally nothing more than a fiscal arrangement between two governments. On this view, the maple leaf is not a symbol of allegiance, solidarity, or even partial identity. It is not a sign of a committment to a broader project, nor an indication of goodwill and fellowfeeling for other Canadians. The Canadian flag represents one thing, and one thing only: A willingness to keep receiving cheques. If those cheques are not deemed big enough, down come the flags.
Canadians have spent the better part of the past century casting about for an identity. We should put Robert Bourassa on our money. He nailed us.
Update — more Federalisme Rentable, thanks to Inkless wells. Such a wonderful country we live in. Merry Christmas everyone.