A lot of things went down this week.

The federal Liberals supported a Conservative budget, albeit with a Liberal amendment that requires the Government to report back to Parliament every three months on the status of its stimulus spending.

The Premier of Newfoundland & Labrador pressured federal members of Parliament from his Province to vote against the federal budget so the Liberal leader allowed his Newfoundland members to do so without consequence. Unfortunate precedent?

Newfoundland had expected to receive $2.7 billion in Atlantic Accord payments over the next three years but that will drop to $1.2 billion because of changes to the way the equalization formula is now calculated by the feds.

Williams has said the change will have a crippling effect on his province's economy. He says the move was designed to "deliver the maximum shaft to Newfoundland and Labrador" after the province failed to re-elect Conservatives in last year's federal election.

History recalls a series of one-off arrangements with provinces in recent years. In January 2005, then Prime Minister Paul Martin announced that his Government had reached an agreement in principle with Newfoundland and Labrador that would ensure the people of the province would be the primary beneficiaries of offshore resource revenues. The agreement was to deliver both 100% of offshore revenues to the province and 100% protection of federal government equalization payments.

In a 2007 play, Mr. Harper announced a one-off $700 million increase in equalization for Quebec. The provincial government promptly used it to cut Quebecers’ income taxes.

These actions beg the question, can or should a federation follow the notion of different strokes for different folks. Our federation is an amalgam of provinces and territories that is supposed to be united by the federal government, not divided by it. National unity is the quality of being one in spirit, sentiment and purpose.

The principle of equalization is that Canadians receive similar levels of public services at comparable levels of taxation, regardless of where they live. Side deals that favour one province or region, over another are counter to the notion of unity and counter to the principle of equalization.

In another sideshow this week, Canadians were perplexed by ‘Buy American’ provisions in U.S. stimulus legislation. Congress would require that all steel and iron used in U.S. funded infrastructure investments be American manufactured.

The Senate version went further, demanding that all goods used for infrastructure projects, be U.S. manufactured. Canada and much of the world reacted by warning that these provisions could spark international trade wars.

Many economists have already reminded us that it was U.S. protectionist measures in the 1930s that drove the world into depression.

Protectionism is the economic policy of restraining trade between nations, through methods such as the imposition of tariffs on imported goods, restrictive quotas on the import of goods and a variety of other restraints built into government regulations that are designed to discourage imports. This policy contrasts with the spirit and intent of free trade agreements such as NAFTA, where government barriers to trade are kept to a minimum.

There would be few winners in a trade war, particularly in a world that has become so economically interdependent. In some industries, like the auto industry (see Canada), production is now so globalized that it is no longer possible to pinpoint or measure nationality in any meaningful way.

The “Buy American” movement is a response to the loss of middle-income jobs, largely connected with traditional or high technology manufacturing. Many of those jobs have moved offshore but massive layoffs responding to the global recession have compounded the problem and jobs are now being lost in other sectors as demand for goods and services continue to fall. There may be light at the end of the tunnel.

The “Buy American” factor was partially mitigated Wednesday when the U.S. Senate added a clause to its stimulus legislation that would require that international trade agreements be honoured, thereby watering down the impact of a measure that threatened to ignite a cross-border trade war.

The fly in the ointment is that Senate Democrats do not have the votes to pass the stimulus package so it’s expected they will have to cut billions of dollars from the stimulus bill to attract Republican votes. The House of Representatives has already passed its own (iron and steel) version of the bill. It will have to be rationalized with the more judicious Senate bill.

One more tidbit, on Wednesday the U.S. Senate also voted to give a tax break of up to $15,000 to home buyers in hopes of revitalizing the U.S. housing industry.

That should be good news for our forest industry, particularly when compared to the paltry home-buying stimulus in Canada’s recent budget.

W.E. (Bill) Belliveau is a Shediac resident and Moncton business consultant. He can be contacted at bill.bellstrategic@nb.aibn.com Atlantic Insight is a published Blog inventory of opinion articles published weekly in New Brunswick's print media as written by W.E. (Bill) Belliveau, who is a resident of Shediac, New Brunswick, and small business owner, operating his Moncton-based marketing consultancy, Bell Strategic. He can be reached by e-mail at mailto:bill.bellstrategic@nb.aibn.com