Thursday, June 21, 2007


Rodney Macdonald's Testimony to the Senate, Atlantic Accord Economic Development Agreement


Rodney Macdonald's Testimony to the Senate

For those of you who haven't heard or read Nova Scotia Premier Rodney MacDonaland's speech, before the Senate committee reviewing the budget implementation bill, I've posted the full text here. It says all that should need to be said on the subject to any thinking individual. Whether the Senate will hear his words is in doubt however.


Rodney MacDonald:

“Good Afternoon Mr. Chair and Thank You. It is an honour to be here."

“I have with me Nova Scotia's Minister of Finance, Michael Baker, and his assistant deputy minister, Liz Cody. You will hear from them later."

“While I am grateful for the opportunity to appear before your committee, I deeply regret the need to."

“Having exhausted every diplomatic effort to have the Government of Canada right an egregious wrong, I am here to appeal to the Senate to use all of its power and all of its authority to restore the Honour of the Crown, by requiring the Parliament of Canada to honour the terms and conditions set out in the 2005 Canada/Nova Scotia Offshore Accord."

“I will be brief, and I will be blunt."

“The Federal Government's efforts to tear up the 2005 Canada/Nova Scotia accord are not only extremely harmful to Nova Scotia, they do great damage to the reputation of the Parliament of Canada, they fuel public cynicism, create regional divides, and they cast a dark shadow over the future of our federation."


“By demonstrating to Canadians, that the word of their government is to be questioned - and the contracts it signs on their behalf - not worth the paper they are written on."

“Strong words I know, but words that cannot be challenged when you examine the evidence in black and white taken against the standard of honour, integrity, or legitimate concern for the national good."

“Let there be absolutely no misunderstanding, the Canada/Nova Scotia Offshore Agreement is very clear. There is not a lick of ambiguity in the wording...not a speck of doubt about its intent."

“The Accord was expressly written and specifically designed to support Nova Scotia's efforts to grow its economy, to become more self-reliant, and over-time, self-sufficient."

“And let there be absolutely no misunderstanding, the Federal budget - Bill C52 - is also very clear. Again, there is not a lick of ambiguity in the wording...not a speck of doubt about its intent."

“It was intended to appeal to vote-rich areas of the country by rendering null and void signed agreements with Nova Scotia and Newfoundland and Labrador; agreements that are not widely popular with either the federal finance department or with those who mistakenly believe Atlantic Canada got something special."

“Before I respond to that particular and misleading allegation, I want to address what can only be characterized as a deliberate attempt by the Federal Government to confuse and confound Canadians about the facts of the offshore accord and the effects of the 2007 budget."

“Let me take a moment to set the record straight by putting the facts on the table."

“Fact: The 2005 Canada/Nova Scotia Offshore Accord bears the signature of the Government of Canada and the Government of Nova Scotia, two legally-constituted authorities under the Canadian Constitution.:

“Fact: The Accord is an economic development agreement between the Federal and Provincial governments and is rooted in the Government of Canada's constitutional obligation under section 36.1 which provides the federal government with the power to further economic development in all regions of our country."

“Fact: Clause four of the Accord guarantees that Nova Scotia will be the full beneficiary of its offshore resources with no clawback of equalization benefits at any time over the life of the agreement, no matter what equalization formula is in effect at any time, over the life of the agreement."

“Fact: Section 81(a) of the Federal budget strips clause four out of the Accord by imposing a cap that claws back equalization payments to Nova Scotia without any corresponding compensation in offset payments, in direct violation of the Accord."

“Fact: The Federal Government's ultimatum to Nova Scotia, either stick with the Accord and sacrifice equalization dollars it is constitutionally entitled to, or opt into the new equalization formula and surrender the full benefits of its offshore revenues violates both the principle and provisions of the Accord."

“Fact: The Prime Minister has repeatedly said Nova Scotia and Newfoundland and Labrador are asking him to sign new side deals. Not true. We're asking the Prime Minister to honour an agreement that is already in place. An agreement he didn’t just tacitly support ...but actively campaigned on while in opposition."

“Fact: When he led the Opposition, Prime Minister Harper came to Nova Scotia just days before the Accord was officially signed and said "Don't trust the Liberals they will find a way to claw it back." The Prime Minister clearly understood the dangers we were facing in placing our trust in the federal government."

“Fact: The Federal budget violates not just the spirit and intent of the Accord, it violates the letter of the Accord in every way, shape and form."

“Fact: If the federal government can tear up its agreement with Nova Scotia... if it can tear to shreds its agreement with Newfoundland and Labrador, it can and likely no doubt will, tear up others."

“Those, Mr. Chair, are some of the indisputable facts, and the reason I am here today."

“Mr. Chair, I'd like to now address some of the "urban myths" spinning out of the Prime Minister's Office and the Office of the Minister of Finance. Both Prime Minister Harper and Minister Flaherty have repeatedly stated that "not one comma of the Accord has been changed, and that it remains in its original, pristine form."

“Again, absolutely not true and they know it."

“The federal government has unilaterally wiped out an entire clause of the agreement - in fact, the most important clause of the agreement - clause four."

“The Accord, post-budget, is nowhere close to being in its original form."

“In fact, for all intents and purposes, it doesn't exist anymore. And if C-52 passes through the Senate Chamber without amendment, the final nail will have been driven into the casket that holds the Atlantic Accord."

“The Prime Minister also said that the federal government is being more than generous to Nova Scotia by giving it a choice. We can keep the Accord as it was or we can forfeit the enriched equalization benefits flowing from the new EQ formula. Pick one or the other he said, adding it is a choice between "a better deal and an even better deal."“Actually, it is more like pick your poison."

“Clause four of the Accord guaranteed Nova Scotia that it would never have to make that choice."

“Let me repeat that, Clause four of the Accord guaranteed Nova Scotia would never have to make that choice."

“It reads "Commencing in 2006-07, and continuing through 2011-12 the annual offset payments shall be equal to 100% of any reductions in equalization payments resulting from offshore resource revenues. The amount of additional offset payment of a year shall be calculated as the difference between the Equalization payment that would be received by the province under the Equalization formula as it exists at the time."

“Mr. Chair, neither of the two options the Federal Government has put on the table comes close to being acceptable."

“Here's why."

“Neither of them come within a country mile of meeting the Federal Government's obligations as spelled out under the Accord."

“The difference between option one, the so-called O'Brien formula and the Accord would mean Nova Scotia would lose an estimated $1.3 billion over the life of the agreement.."

“The difference between option two, the so-called fixed framework and the Accord would mean Nova Scotia would lose an estimated $793 million."

“In either case, Nova Scotia stands to lose hundreds of millions of dollars...dollars the federal government promised we would have to support our efforts...our determined efforts grow our become a have province and to begin leveling the playing field so our citizens pay roughly the same taxes for roughly the same services as other Canadians."

“But beyond the financial hit Nova Scotia will take as a result of the federal budget - is something equally, if not more troubling to me and to many Atlantic Canadians, and that is the underlying insinuation that we Maritimers want to have our cake and to eat it too - as some are suggesting....that the Accord was some kind of special, sweetheart deal others didn't get, and we don't deserve. Well, did other provinces deserve their economic development agreements?"

“Again, Mr. Chair, the 2005 Canada/Nova Scotia Accord is an economic development agreement. It is not double equalization."

“The Accord was meant to allow Nova Scotia to use the full benefits of its offshore resources - resources that have a limited shelf-life - to gain some economic momentum - and to put us on the road to greater self-sufficiency - and to making an even greater contribution to Canada."

“So why is it that Nova Scotia's economic agreement is under such harsh attack when the financial benefits to our province pale in comparison to so many others across our country? They pale in comparison to the billions of federal dollars that have gone into supporting Quebec's aerospace industry... They pale in comparison to the billions of federal dollars that support Ontario’s automotive industry...And they pale in comparison to the billions of federal dollars that were poured into western grain subsidies. Or the Alberta tar sands."

“Why is it that just two years ago when the federal government supported economic development opportunities in the Province of Ontario with a cheque worth 5.75 billion dollars - roughly seven times the value of Nova Scotia's Accord - and Nova Scotia did not object because economic development in one part of the country is good for all Canadians in all parts of Canada."

“And why is it that just days after the Federal budget was introduced - a budget that gutted our Accord (NS's economic development agreement) the Federal government pumped another 900 million dollars into Quebec's aerospace industry and nobody batted an eye?"

“Mr. Chair, let me be clear. I don't want anyone around this table, or anywhere else for that matter, to think that I am against any of the examples I just cited."

“It's the exact opposite."

“I strongly believe that the Federal Government has an important role, indeed an obligation, to support economic opportunities in all regions, provinces and territories within our country. In fact, that is what section 36.1 of the Constitution is all about and our accord is rooted in."

“I strongly believe - that a strong Ontario is good for Canada and good for Nova Scotia."

“I strongly believe - that a strong Alberta is good for Canada and good for Nova Scotia."

“I strongly believe that a strong Quebec is good for Canada and good for Nova Scotia."

“I fully support the government's efforts to help Western grain farmers, and despite the fact that we still don't have a formal commitment from the Federal Government to support our Atlantic Gateway initiative, I fully support the Federal Government's investment in the Pacific Gateway."

“All of these economic development agreements are essentially federal transfers. For that reason they are not subject to clawback. But the 2005 Accord, also a transfer, is clawed back in the 2007 Budget. In fact, the 2005 Accord is the only transfer in federal history, that we are aware of, that is clawed back."

“Mr. Chair it comes down to an issue of fairness.“It took more than 25 years, five Prime Ministers and a promise by Nova Scotia to put aside its jurisdictional claim over the offshore - for us to get to where we were on February 14th 2005 - the day the offshore accord agreement was signed by the Government of Canada and the Government of Nova Scotia."

“Only two years later, in an agreement that was supposed to last at least fifteen years, we find ourselves back at square one."

“By tearing up the Nova Scotia and Newfoundland and Labrador accords, the federal government has sent the wrong message to Atlantic Canada."

“They've broken faith with the people of Atlantic Canada and created divisions within our country that will not be settled until the problem is fixed."

“So, Mr. Chair, I hope you, and all of the members of your committee, fully appreciate how much is at stake here....not just for Nova Scotia ...not just for Newfoundland and Labrador but for the future of federal-provincial relations within our Country."

“For Atlantic Canadians, this is about more than dollars and's about equality of opportunity for all's about fairness and respect for all Canadians's about harmony within our federation... it's about what value we can put on the Government of Canadas signature."

“And for Nova Scotians, it's about a lot more than a political dust-up over a two-page, 9 paragraph agreement between two levels of government. Nova Scotians know that our Accord presented a rare window of opportunity to achieve greater prosperity, to provide a better future for our children and to contribute to a stronger Canada."

“Today, they feel betrayed - and so do I.“Mr. Chair shortly, I'm going to cede the floor to my colleague, Minister Baker, who will put forward - for the consideration of this committee and all members of the Senate - amendments to Bill C-52."

“Before I do, I want to end with a few brief comments and a request."

“All of you here today are proud Canadians representing different regions of our country... all with the best interests of your fellow citizens top of mind and our nation’s interests at heart."

“I am confident that, like me, you know that nation-building does not begin on the Pacific coast and stop at the border to Atlantic Canada. Nation building recognizes and supports the legitimate interests of every Canadian citizen and supports the economic potential of every province and territory."

“I know that you can make the case that no matter what the federal government does, there's always one province or one region crying foul."

“Fair enough."

“But after hearing the full testimony of the Province of Nova Scotia and examining in full the evidence we put before you today, I ask you to ask yourselves: has Atlantic Canada been treated fairly?"

“And I ask that you ask yourselves this: How can the average Canadian, any other level of government, or any other country for that matter, trust the Government of Canada to keep its word when signed contracts can be so easily dismissed and disposed of?"

“I urge you to consider our amendments and to take whatever steps within your power to restore the 2005 Canada-Nova Scotia Offshore Accord and the Honour of the Crown."

"Mr. Chair, the issue of fairness for a small region of Canada - and Confederation partners - means a great deal to who we are and what we think of ourselves. The value of our agreements must mean more than here-today, gone-tomorrow."

“The Atlantic Accord was designed to last at least 15 years. It will survive about two years unless Bill C-52 is amended. I ask you to consider Minister Baker's amendments that will restore the benefits of the 2005 Atlantic Accord. Benefits that will put us further down the road to self-sufficiency."

“Thank you.”


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I am starting up an email campaign for the Atlantic Accord. The biggest problem is that we do not know why the federal government has chosen this route and Peter MacKay refuses to appear and explain their position.
I have sent email messages to Stephan Harper and have heard nothing back so I am hoping if enough people email him he will respond. Get the full details at Blogging Nova Scotia at the following link:
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