Tuesday, June 12, 2007

 

BC'er in Toronto on equalization and the Atlantic Accord

Repost

BC'er in toronto does a good job of explaining what it means to be canadian.

I will just add that Marc Lalond said after the D-Equalization formula was changed back in 1957 to claw back non-renewable resource revenues no province will ever be allowed to achieve what Alberta did. Hence the CAP and claw backs to ensure have not provinces will remain that way. It is an economic way of keeping the colonies of Ontario and Quebec subservient and dependant upon Ottawa so as not to get to uppity and feel they can go it alone.

If you will recall Scott Reid said something similar after signing the 2005 Atlantic Accord. We will get it back in other ways by redesigning the system once again.



Decivin' Steven on the Atlantic Accord, circa 2004

God bless Hansard. Here’s what Decivin' Steven was saying about the Atlantic Accord and election promises less than three years ago...(h/t tony)

38th PARLIAMENT, 1st SESSION
EDITED HANSARD • NUMBER 022
CONTENTS
Thursday, November 4, 2004

Hon. Stephen Harper (Leader of the Opposition, CPC) moved:

That this House deplore the attitude of the Prime Minister of Canada at and following the First Ministers' Conference of October 26, 2004, and that it call on the federal government to immediately implement its pledges of June 5 and 27, 2004, to allow the provinces of Newfoundland and Labrador, and Nova Scotia to keep 100% of their provincial offshore oil and gas revenues.

He said: Mr. Speaker,I will be splitting my time with our deputy leader from Central Nova.

On June 5 of this year the Prime Minister arrived in St. John's, the capital of Newfoundland and Labrador. The context was the following. Obviously it was an election campaign when the Prime Minister was asked to respond to a longstanding Conservative commitment to ensure that the Atlantic provinces would enjoy 100% of their non-renewable resource royalties.

This is a commitment that was made by me in my capacity as leader of the Canadian Alliance when I first arrived here and has its origins in the intentions of the Atlantic accord signed by former Prime Minister Mulroney in the mid-1980s. These are longstanding commitments, our commitment to 100% of non-renewable resource royalties. It was our commitment during the election, before the election, and it remains our commitment today.

For the Prime Minister, this was something that he had opposed for 11 years and for most of his political career. But suddenly in the midst of an election campaign on June 5, he met with Newfoundland and Labrador Premier Danny Williams. He came out of that meeting and said the following:

"I believe that Newfoundland and Labrador ought to be the primary beneficiary of the offshore resources, and what I have said to the premier is that I believe the proposal that he has put forth certainly provides the basis of an agreement between the two of us."

Premier Williams specified in a letter dated June 10 that:

'The proposal my government made to you and your Minister of Natural Resources provides for 100% of direct provincial revenues generated by the petroleum resources in the Newfoundland and Labrador Offshore Area, to accrue to the government of Newfoundland and Labrador and be sheltered from the clawback provisions of the equalization formula--'

The Prime Minister said he agreed with the Premier's proposal and he gave his word as Prime Minister of Canada. Premier Williams was asked at the press conference announcing the deal how he could be sure the Prime Minister would keep his word after the election. He replied that as a man of honour, that the solemn word of the Prime Minister was sufficient. Premier Williams said: “It's by word of mouth, and I'm taking him at his word, and that's good enough for me”.

Unfortunately, the solemn word of this Prime Minister turned out to be not good enough. The Prime Minister ignored letters from Premier Williams on June 10, August 5 and August 24 urging him to confirm his promise. Suddenly, the Prime Minister and his Minister of Natural Resources fell silent.

Finally, on October 24, two days before the first ministers' conference, the Minister of Finance finally replied offering:

--additional annual payments that will ensure the province effectively retains 100 per cent of its offshore revenues--

Then the minister added two big exceptions limiting the offer:

--for an eight-year period covering 2004-05 through 2011-12, subject to the provision that no such additional payments result in the fiscal capacity of the province exceeding that of the province of Ontario in any given year.

The eight year time limit and the Ontario clause effectively gutted the commitment made to the people of Newfoundland and Labrador during the election campaign.

Why should Newfoundland's possibility of achieving levels of prosperity comparable to the rest of Canada be limited to an artificial eight year period? Remember in particular that these are in any case non-renewable resources that will run out. Why is the government so eager to ensure that Newfoundland and Labrador always remain below the economic level of Ontario?

The Ontario clause is unfair and insulting to the people of Newfoundland and Labrador, and its message to that province, to Nova Scotia and to all of Atlantic Canada is absolutely clear. They can only get what they were promised if they agree to remain have not provinces forever. That is absolutely unacceptable.

Hon. Stephen Harper (Calgary Southwest, CPC): Everyone in Canada would be happy if one day our Atlantic provinces could fully benefit from their natural resources, everyone except the federal Liberals.

The Liberal attitude is as typical as it is senseless. There is no point pulling back non-renewable resource revenues from a have not province. This is an opportunity and it is a one time opportunity. It is a short term opportunity to allow these provinces to kick-start their economic development, to get out of have not status, to grow this short run opportunity into long run growth and revenue that will be paid back to Ottawa over and over again and that will benefit the people of those regions of Canada for a very long time.

This is what happened in the case of my province of Alberta. Alberta discovered oil and gas in the 1940s and 1950s, Alberta was a have not province. From 1957 until 1965, Alberta received transfers from the equalization program. Alberta was allowed to keep 100% of its oil royalties and there was no federal clawback. This is what allowed Alberta to kick-start its economy, to expand and diversify, to build universities, to advance social services and to become one of the powerhouses of the 21st century Canadian economy.

Of course the Liberals expended endless effort to limit the growth of Alberta's revenues, culminating in the experience of the national energy program. Now we see already, with this opportunity in Atlantic Canada, the same attempts to limit the opportunity. The Prime Minister's Ontario cap effectively limits the maximum benefit of the offshore resource to $452 per person in the province of Newfoundland and Labrador. After that, every dollar will be clawed back by Ottawa, no matter how many billions the offshore resource turns out to be worth.

The Prime Minister, before he was here, was president of a company that largely depended on offshore activity. Does he not understand that energy resources are finite, temporary and a short term opportunity? The provinces of Newfoundland and Labrador and Nova Scotia should be allowed, indeed should be encouraged, to improve the living conditions of their citizens and to use this to attract new long term businesses to replace the temporary opportunities provided by the offshore resources.

Instead, when the Atlantic provinces rejected the latest federal offers, the caps, the limits and the exclusions, the government engaged in a clumsy divide and conquer tactic, a tactic which gave away its obvious objective of holding back the development of the Atlantic provinces. It has tried to negotiate with one province and not the other, but both Newfoundland and Labrador and Nova Scotia have made clear that their positions are the same and that they want to be dealt with fairly and at the same time.

Whether we live in Newfoundland and Labrador, Nova Scotia, Alberta or anywhere else, we are all Canadians. We all have a right to a better future. That future is not for the Liberal Party to decide to speed up or to slow down, to start or to stop. It is not to negotiate. The Prime Minister gave his word. The terms of his proposal were clear. Newfoundland and Labrador and Nova Scotia requested and were promised 100% of their offshore revenues without equalization clawback, period. There is nothing to negotiate.

What is at stake is the future of Atlantic Canada, an unprecedented and historic opportunity for those provinces to get out of the have not status that has bedevilled them for decades. What is at issue is very simple. It is the honour of the Prime Minister, and all he has to do is keep his word.

http://bcinto.blogspot.com/2007/06/decivin-steven-on-atlantic-accord-circa.html

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