The principle of “subordination” requires society to defer as much as possible to the decisions of individuals and families. Obviously there are decisions and actions that must be taken collectively. But subordination means that we must first rely on local and voluntary organizations such as charities rather than government.
If we are to use government, the default should be local and regional governments, then provincial, then federal, with international as a last resort. At almost every turn, Prime Minister Justin Trudeau has rejected this principle in favor of ever greater centralization of decision-making in Ottawa. And Trudeau’s increased centralism is sure to end in costly failure.
Subsidiarity is essential for federal countries like Canada, and yet the Trudeau government has consistently chosen to intervene in areas that are not only better for the provinces, but in many cases our constitution, especially the provincial authority areas. describes as The Trudeau government’s $10-a-day day care, dental care, pharmacare, and expanded health care and social transfers are all areas of provincial responsibility.
Spending on these initiatives is significant. gave Health and social transition In 2022-23, this amount is over $61.1 billion. According to estimates, New day care programs About $8.0 billion will be spent annually while A new dental benefit It will cost $1.7 billion annually.
Ottawa also plans to introduce national pharmacare legislation next year, but the specific price tag has not been disclosed, although the federal government’s The Hoskins Report It is estimated that once fully implemented, national pharmacare could cost up to $15.3 billion annually.
All of this new spending in provincial areas of responsibility is occurring at a time when Ottawa cannot regain control of federal finances despite increased revenue. this year Ottawa expects. To spend $52.8 billion more than its income, the total national debt reached $1.8 trillion. and are based on these estimates. Economic assumptions This includes 3.9% real growth in the economy and 3.9% inflation. Given how flawed these economic assumptions are, the federal finances could be in worse shape with spending and borrowing far above budget.
Of course, some functions are most effectively accomplished by the federal government, including defense, foreign affairs, and national justice. However, these areas of federal jurisdiction represent much lower costs than those incurred in provincial areas of responsibility.
For example, consider that according to Public Accounts for 2020-21, Ottawa spent $29.0 billion on national defense and $2.0 billion on justice, with $40.9 billion in health transfers to the provinces and another $14.6 billion in social transfers. And once again, Trudeau continued to increase spending and introduce new programs in areas of provincial responsibility.
Perhaps most disappointing is the collective response of the prime minister as Ottawa further encroaches on provincial responsibilities. Instead of defending his sovereignty, the prime minister, regardless of political stripe, has embraced the extra federal money.
The current state of federal finances (and fiscal history) predicts that the Prime Minister will regret these decisions because it is highly likely that Ottawa will cut transfers to support these programs, such as Did it in the pastwhen economic reality required Ottawa to take control of its finances.
Federal countries work best—economically, fiscally, and practically—when governments follow subordination and respect specific areas of responsibility. Trudeau’s continued rejection of both will almost certainly end in failure, with significant costs imposed on Canadians.
Jason Clemens and Jack Foss are economists at the Fraser Institute.