See text below.
EXCERPTS
Ottawa plans to use its current surplus to create a trust fund in the coming budget aimed at kick-starting its $5-billion national daycare program, sources have told The Globe and Mail.
Sources confirmed yesterday that federal officials have told provincial bureaucrats that Finance Minister Ralph Goodale intends to set up the fund in an effort to meet the commitment the government made during last year's election campaign.
Ottawa is hoping to carve out a portion of the fund for itself to pay for aboriginal children on reserves and other "national priorities."
In an interview yesterday, Mr. Goodale would not discuss the way money would be delivered, but hinted that the surplus, which stands at $9-billion, could be used to fund the program.
"We've got a little extra room," he said. "And obviously part of crafting the budget is making the right decision about what to do with the flexibility you've got."
The Martin government feels the need to demonstrate progress on the daycare file given the prominence of the pledge in the last election, a federal official said. Ottawa also wants to build a bullet-proof budget that could stand criticism during a campaign, should the minority government unexpectedly fall, and needs to say it has moved to keep its election promises.
According to sources, financial officials in Ottawa have not settled yet on the amount of the fund and the distribution of the cash. However, they have indicated that it would be a multiyear fund and that they want to "carve out" an amount for themselves to pay for daycares on reserves. Federal and provincial officials are expected to meet next week on the matter.
But provincial officials say earmarking money now for the program may be little more than a cosmetic move because there is yet no deal with Ottawa on how provinces access the money.
"It allows the feds to announce money without giving it to us," a provincial source said.
Another official said the negotiations, while positive, still have a substantial way to go. For example, the provinces will almost certainly ask for more money than the $5-billion over five years Prime Minister Paul Martin promised last spring. Ottawa must also iron out such details as what kind of reporting the provinces might be obliged to do to demonstrate that
they're using the money for the appropriate purposes.
"They're very good at the easy part," Conservative MP Monte Solberg said. "But not so good when it comes to the hard part of reform."
Mr. Solberg said it's also wrong for Ottawa to put money in a trust fund at the end of the fiscal year, when Canadian voters can't debate it.
Provinces are also concerned about the trust fund model because the federal money is not built into annual federal spending plans and could end suddenly.
"A trust fund raises concerns that it is not base funding, which seems incongruous with their demand for a national system."
Mr. Goodale said yesterday that the government would pursue daycare in the budget because it was a critical part of the Liberal campaign.
"This budget has to leave the very clear message that a flagship commitment is a flagship commitment and it will be honoured," he said.
Last week, Social Development Minister Ken Dryden said he expects a deal to be reached on a national daycare program when the provinces and territories meet Feb. 11 in Vancouver.
To do so, however, Mr. Dryden will have to overcome a number of hurdles, including the fact that many provinces will be asking for more money from the federal government because they have only minimal public child-care systems.
"For provinces that are coming to the table with very minimal child care systems, and being asked to commit to a national program that would require significant provincial investments, given that the federal money isn't adequate, they have more problems with what's on the table," a provincial source said.
- reprinted from the Globe and Mail