Recent columns: Nova Scotia's sweetheart deal

I am trying to decide which is the more outrageous: the Atlantic premiers’ phoney grievance over the new equalization formula contained in this year’s budget, or the Harper government’s phoney promises with regard to same before the last election. It’s a near thing, but I’d give the premiers’ preposterousness the edge over the Harperites’ hypocrisy...

Indeed, it is only the Harper government’s well-earned reputation for deviousness that has allowed the premiers’ campaign to get as far as it has. Were the Conservatives less distrusted, premiers Williams and MacDonald would be seen for what they are: shakedown artists, in the grand tradition.

The facts are these. Constitutionally, offshore resources are under federal, not provincial ownership. Twenty-odd years ago, however, the Mulroney government agreed to pretend they were provincial, giving the Atlantic provinces first crack at the royalties.

In 2005, the Martin government took this a step further, agreeing not only that the provinces of Nova Scotia and Newfoundland were entitled to collect royalties on resources they don’t own, but that they should continue to collect equalization payments as if they did not also collect royalties. Many experts had argued that the “clawback” on equalization payments should be less confiscatory. But the Atlantic Accords stipulated there should be no clawback at all. Sweet.

Too sweet: they should never have been signed. Under the accords, the two provinces will still be entitled to equalization even after their governments, aready awash in oil revenues, have grown wealthier than Ontario’s. When is that far-off day? In Newfoundland’s case, it’s today: for 2007-08, Newfoundland’s per capita revenues, equalization included, total $7,094, to Ontario’s $6,631. This is simply untenable -- which is why the O’Brien report, on which the new equalization formula is based, proposed a “cap” on equalization payments at this point, ensuring Ontarians will not be paying for services in provinces that are richer than their own.

So it is with not a little chagrin that I can report that the 2007 budget did nothing whatever to disturb the accords. The “contract,” as both sides have taken to calling it (Contract? What did Newfoundland or Nova Scotia bring to the table? What did they offer in return?), is alas wholly intact. The issue is not whether the new equalization formula, with its “10-province standard” and “50% inclusion-rate,” is better or worse for the Atlantic provinces. (It depends on the price of oil, among other things.) The issue is that nothing compels either province to adopt it.

As it has been described in the press, they have a choice. They can stick with the existing formula, and remain covered by the Atlantic Accords. Or they can switch to the new formula, which promises to pay out more in the short term -- but which includes the cap. Newfoundland, for instance, chose to stay with the old formula for this year, meaning it is no better and no worse off than before. Nova Scotia, on the other hand, received $95 million more in equalization this year by opting for the new formula.

But in fact they don’t have to choose even then. Even after taking the new formula -- and the extra cash -- Nova Scotia can still go back to the old one next year. And even if they stay with the new formula, the Accord still applies. They remain exempt from the clawback -- as long as their fiscal capacity does not exceed that of Ontario’s. Only then does the cap kick in.

It’s hard to see the injustice in any of this. The most that can be said for the premiers’ position is that the Accords say payments should be based on “the Equalization formula as it applies at the time.” On the premiers’ reading, this means they should be entitled both to the protections of the Accord and the new formula’s enriched payments. But the new formula isn’t just about higher payouts. It also includes the cap.

What the premiers are demanding is some mythical third option, one with higher payments, no clawback, and no cap. They want the best of three worlds: to have their cake, eat it, and spin it above their heads.

Which would be more outrageous, were that not what Stephen Harper, in effect, promised them. As Opposition leader, Mr. Harper was not only unequivocal in committing to full exclusion of resource revenues from any new equalization formula -- meaning no clawbacks -- but that this should apply, well, forever: i.e. sans cap. Here he is in the House of Commons on November 4, 2004:

“Why should Newfoundland's possibility of achieving levels of prosperity comparable to the rest of Canada be limited to an artificial eight year period? … 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.”

It is not true, then, to say that the Accord has been violated. It is true that Mr. Harper played Atlantic Canadians for suckers. At least he is paying the price.

Previous Columns

47 Comments

Meany:: Yep. Time to ditch the rose coloured lenses, this "genius", "strategist", "policy-wonk" Harper, is nothing more than a bumbling idiot. I'm truly surprised him and Martin didn't get along better.; 12/6/07 10:47 PM
ron in kelowna:: Good analysis Andrew.

Now why does this kind of thing always happen in Canada ??

Could it be partly because of the media ??

'Hey !! I'm not happy over here' Media runs over with microphones, looking to stir the pot.

'Ok, I'll give you this much'. Media immeadiately runs around to find someone who says it is too much. Controversy, print print.

When the Premier of NS was unhappy, media jumped on the story. 'How unhappy are ya ? Pry pry. 'You better be real mad or your voters will be mad at you. Doesn't matter if you are being unreasonable. Good story, ya see.'

One may vote against the budget. 'Caucus revolt !!' 'Constitutional crisis !! Buy dead trees here !!'

Sorry to say, but it is that pathetic. The MSM has gone Tabloid.

Anyhow, does anyone out there know how other countries treat off shore resourse jurisdictions ??; 12/6/07 11:02 PM
Howard:: Thanks for the facts Andrew. I understand what Ron is saying. In my case I'd just say that it is interesting to me that I came to andrewcoyne.com (a columnist) to get the facts that aren't available from any of the msm outlets who count among their tasks the reporting of news and facts. Here I am getting the facts from Andrew the columnist instead of from a news reporter.; 13/6/07 12:19 AM
FDuquette:: As long as the federal government is awash in surplus revenue, everyone can have their cake, eat it, spin it, whatever it takes. I wonder how long those revenues are projected to continue...; 13/6/07 12:28 AM
ron in kelowna:: The point that the media is partly(mostly?) responsible for a lot of the political misques ?? on all sides ??

Tony Blair makes the point well. And, well, we all know it is true so why does this garbage continue ??

"In a sweeping critique of the industry, Mr Blair claimed newspapers, locked into an increasingly bitter sales war in a 24 hour news environment, indulged in "impact jourmalism" in which truth and balance had become secondary to the desire for stories to boast sales and be taken up by other outlets."

Hard to argue with that.

"He said the fierce competition for stories has lead to the media now hunting in a pack. In these modes it is like a feral beast, just tearing people and reputations to bits, but no one dare miss out."

Not even Oliver, Todd, Galloway or the 'Badger' ??; 13/6/07 12:33 AM
Luke:: *Sigh* Is there ever going to be a day when federal politics doesn't revolve around petulant disputes with premiers? Did that day ever exist in the past? Was I just born into the wrong generation?

Someone...help me.

I'm completely confused on the whole Atlantic Accords/Equalization deal. As far as I could tell, until I read Coyne's article, Harper was living up to his word. He should never have promised, or said he would eliminate natural resource revenue from the formula, but I understand the nature of politics, and that eventually your going to end up getting trapped by your own words at some point. I think its too bad he has to pay a political price for that, especially given how many politicians don't pay a price for that.; 13/6/07 12:59 AM
paul.obeda@:: I don't see where you find Harper (2004) suggesting that the wealth of NL et al should exceed the wealth of (say) Ontario under equalization. That there should be no cap, ever. I see only that equalization shouldn't prevent them from achieving that level of wealth.

And once their per-capita revenues exceed Ontario's (as you suggest occurs for 2007-08), how can they be called "have-not" provinces? How does this violate Harper 2004?; 13/6/07 3:55 AM
Steve L.:: wow Harper really said that in November 2004? then he really is justified in playing Atlantic Canadians for suckers, considering the still-lackluster political fortunes of the federal Conservatives east of Quebec. rot in your precious (mostly) federal Liberal establishment, Nova Scotia. no offense, Premier McDonald.

that said, i don't think the Conservatives should've dumped Bill Casey. Canada's obsession with party discipline on budgetary votes is beyond detrimental to democratic freedoms.; 13/6/07 4:19 AM
Grithater:: This is Harper at his politically dumbest. The mess was Martin's fault (or at least he did it), Harper could have just let it go. Sure it wasn't fair, but life is not fair. The things that makes these things livable is that they sunset so they will solve themselves soon enough. In NS's cae it is up to a billion dollars over the life of the accord. What fraction of federal revenues over that time is that? 0.0000 something or other so who cares?; 13/6/07 7:23 AM
Joan Tintor:: Thanks AC, I was waiting for you to weigh in on this.

In defense of party discipline, it's what makes Parliamentary government work. When you vote for the candidate of the party/leader whose platform you like, you know that platform is what you're (likely) going to get if they form government.; 13/6/07 9:21 AM
DW:: AC,

This was a useful, informative column, but I think your analysis of the present dispute is clouded by your (correct) assessment that the Atlantic Accords were a bad idea and that the current budgetary proposal is a better one. This is because the current brouhaha is not at all about what is the best policy. The controversy is one over keeping one's word. On that score, Harper is clearly the villain of the piece and MacDonald the victim.

It is also worth noting that on the honesty front Peter MacKay is scoring poorly. He not only is defending the dishonest dealings of Harper, but told his own reckless lie in promising that no one would be kicked out of caucus for voting against the budget. Of course they would, and Bill Casey was.

You describe in your column Williams and MacDonald as "shakedown artists", but it is hard to see how they could be called that when it is unclear just what leverage they (or their predecessor, in MacDonald's case) had in making the deals in the first place. If I demand that you share half your income with me and threaten to whine to the media if you refuse, I am not much of a shakedown artist and you not much of a victim if you agree.

And one final question. When you write, "Newfoundland’s per capita revenues, equalization included, total $7,094, to Ontario’s $6,631" are you talking about the provincial budgets per capita or the per capita gross provincial income? If its the former, then then it is not true to say that Newfoundlanders are "wealthier than" Ontarians. That would only be true if the latter were the case. So actually, for the clawback clause to be truly a fair one, it should not be based on when the two provinces have the same per capita tax burden, but when the two provinces are equally "have" provinces, for which per capita gross provincial income is the right measure.; 13/6/07 9:39 AM
Mark:: This is the most factually accurate column on this subject that I have read anywhere. Devoid of the mythology in the local press or the condescension in some of the national papers.

There are a few points, however worth mentioning.

First, the Accords of the mid-1980 DID allow for certain amounts of the resource revenues to be shielded from this purported "clawback" through off-set provisions. This is not a new thing. In both accords, these offset provisions were set to a declining scale. The argument 20 years later was that they had triggered the declining value of those provisions prematurely with a small natural gas development, well ahead of the Sable project coming on stream. In Newfoundland's case, it was more a matter of the rest of the province's economy tanking in the 1990s that made the impact of first oil simply maintain the province's fiscal capcity, rather than propelling it to the levels so gleefully promised by Corsbie, Peckford et al.

What is not in question, however, is that the federal government followed these accords to the letter. In fact, they sweetened the deal for the provinces by introducing a "generic provision" in the equalization program which allowed provinces with incomparable revenue streams to exempt 30% of those revenues from the Equalization calculation OR choose the going rate of their Accord off set provision. They even allowed the provinces to make that election after the fact, so they would never lose out by making the wrong choice in the face of fluctuating commodity prices, production values, etc.

Still, when facts aren't written about, mythology prevails, and soon enough, politicans of every stripe were counting things like the federal government's collection of sales tax and EI premiums as "stealing" the provinces' oil money. It was preposterous, but any proposition supported by all and renounced by none quickly becomes gospel. Even today, papers regularly wriet about the "billions" collected by Ottawa, when in fact, they collect zero in royalties. Except of course, the Hibernia Holding Corp., a crown corporation created to save the first major project from dying for lack of a willing partner. Fat chance the feds will ever get credit for that. But I digress.

That being said, there is a legitimate reason for Newfoundland and NS's oil and gas resources to be afforded special treatemt. Primarily it is because, unlike the oil and gas industry on land, the investment required for entry into this field is in the hundreds of millions of dollars. Unlike Texas or Alberta, where there is room for small investors, land speculators, and property owners (think Beverly Hillbillies) the only exploratory and producing interests in the offshore are big oil. NL and NS will only ever realize royalty income, and whatever spinoff industry activity the local market will provide. Hence the desire to maximize royalties and the provisions in all of these projects to maximize local contracts for everything from catering to diving, to fabrication and supply. The chances for local equity investment in the production side of this industry are virtually nil.

Here again, the provinces have defeated their own premise. The argument that offshore revenues were "different" was a sound one, but now that they've thrown their lot in with Premier Calvert in Saskatchewan they've put their own argument on shaky ground.

Similarly, after spending years arguing for a ten-province standard (when oil prices rose), these provinces were essentially saying that they wanted Alberta's fiscal capcity (from oi revenues) included in the calculation of the national average. Yet here they are three years later holding Harper to a promise to remove those very same revenues from the national calculation. Again, either position has merit, but when you argue both in the span of three years, you look a bit ridiculous.

Umm, I'm rambling now, but there's much more.

But good on AC for pointing at least one finger in Harper's direction on this one. Afterall, he, more than anyone, spent all of 2003-04 stumping in St. John's and Halifax stirring this pot.

Another question - of course - is if this is so patently unfair, whether one way or the other - why are the other Premiers so silent on this issue? Where's the vaunted Council of the Federation? Hwy are they afraid to touch this with a ten-foot pole?; 13/6/07 9:58 AM
Sean:: DOn't forget that when revamping equalization, Harper had Alberta and Ontario breathing down his back.

Mcguinty in particular was none too pleased (and rightly so) about the patchwork of deals that Martin had put together that effectively fleeced Ontario.; 13/6/07 11:55 AM
ron in kelowna:: How are off-shore resourse jurisdictions treated in other countries --- Federal/Secondary gov'ts ??

Meanwhile, on the other end of the country, there are also, apparently, huge oil and gas reserves off/on the BC coast. Just ask David Suzuki :); 13/6/07 1:15 PM
NB taxpayer:: Harper turned his back on the spirit of this agreement. He must pay the price.; 13/6/07 3:31 PM
DW:: Paul wrote: "And once their per-capita revenues exceed Ontario's (as you suggest occurs for 2007-08), how can they be called "have-not" provinces?"

Whether or not a particular province is rich or poor ("have" or "have not") is not a function of the size of the budget of the government. It is a function of the size of the income of the population.

For example, if the average income in province "A" were $100,000 but they paid on average $5,000 in taxes while the average income in province "B" were $10,000 but they paid on average $5,100 in taxes, it would make no sense to say that the people in province "B" are richer than those in province "A". If either province needs help with equalization, it is province "B" if for no other reason than to allow them to reduce the tax burden on their already struggling people.

What I described above is actually not far off from the actual Ontario - NL situation. Only the numbers have been exaggerated to make the point more clear. Anyone who thinks that NL is more of a "have" province than Ontario based on the size of their budgets is delusional. (That includes you, AC :-); 13/6/07 4:18 PM
paul.obeda@:: DW, what you describe would be fine if equalization were an attempt to balance personal income across the country.

It is not.

It is an attempt to allow governments to provide comparable levels of largesse - er - programs across the country.

Local tax burdens are a consideration, since nobody wants to be excessively burdened in order to a province which has an exceptionally light tax burden. But it's the government's - not the citizen's - fiscal capacity which matters most for equalization.; 13/6/07 4:37 PM
Anonymous:: That was a very pedestrian view AC.; 13/6/07 4:38 PM
Anonymous:: DW,

You are incorrect. The formula is based on the fiscal capacity (read: potential to raise funds) of each province at comparable levels of taxation. Emphasis on comparable.

Your analogy is wrong.; 13/6/07 4:53 PM
KRB:: Ron and others who deplore the depravity of our mainstream media, should check out Tony Blair's speech about the modern media, from yesterday:

http://www.number-10.gov.uk/output/Page11923.asp

Best parts, for me:

"First, scandal or controversy beats ordinary reporting hands down. News is rarely news unless it generates heat as much as or more than light. Second, attacking motive is far more potent than attacking judgment. It is not enough for someone to make an error, it has to be venal, conspiratorial. Watergate was a great piece of journalism, but is a PhD thesis all on its own to examine the consequences for journalism of standing one conspiracy up. What creates cynicism is not mistakes, it is allegations of misconduct, but misconduct is what has impact. Third, the fear of missing out means that today's media, more than ever before, hunts in a pack. In these modes it is like a feral beast, just tearing people and reputations to bits, but no-one dares miss out. Fourth, rather than just report news, even if sensational or controversial, the new technique is commentary on the news being as, if not more, important than the news itself. So for example there will often be as much interpretation of what a politician is saying, as there is coverage of them actually saying it. And in the end what matters is not what they mean, but what they can be taken to mean."; 13/6/07 6:04 PM
KRB:: That link again:

http://www.number-10.gov.uk/output/Page11923.asp; 13/6/07 6:06 PM
Robert:: This post has been removed by the author.; 13/6/07 8:54 PM
r a:: "Contract? What did Newfoundland or Nova Scotia bring to the table? What did they offer in return?"

A good point. Formally there is no contract in the sense of an exchange. But in political terms the underlying contract is that the government will deliver cash and the recipients will deliver their votes in return. In practice even this exchange of corrupt favours has not worked out well. How were Prime Ministers Mulroney and Martin rewarded for the gouts of Central Canada's tax dollars which they rendered up to the so-called have-not regions? They got nothing.

The iron law of welfare is that the more is dished out, the worse the behaviour of the recipients. Hence the outrage being vented at the Feds for what is really a very sweet deal. But even if the Conservatives rolled on their backs with their legs in the air and gave in to every East Coast demand without qualification - they still wouldn't reap any kind of electoral dividend.

Bribing the voters with welfare is a mug's game. The recipients become more unreasonable the more you give them and the electoral payout is minimal. Why should they vote for you when what you're giving them is their right? Unfortunately, as long as politicians sniff even the prospect of a marginal improvement in their seat count they will continue to dole out the cash - even at the cost to the public of tens of billions of dollars per riding gained for the governing party. A sorry mess indeed.; 13/6/07 9:01 PM
Mark:: Sean said:

"...when revamping equalization, Harper had Alberta and Ontario breathing down his back..."

Actually, quite the opposite. Dalton McGuinty was sending encouraging hand written notes to Williams at a First Ministers meeting egging him on and encouraging him to "keep up the fight", while Alberta premiers Klein and Lougheed were giving keynote speeches in St. John's professing their glee at Danny W's "taking on the feds".

Ontario and Alberta had three years to complain about anything Martin was doing, Harper was proposing, or Williams was demanding. Instead they chose to rub salt in the wounds.

Look it up.; 13/6/07 10:11 PM
Stephen:: I a for goving Newfoundland ful control of off shore resources and 10 years of equalization if they would JUST SHUT UP.

I want to be clear of any future obligation in case they do the ineveitable and screw it up, like they always do.; 13/6/07 10:47 PM
Sean:: Mark:

"Actually, quite the opposite"

Give me a break.

Ontario was completely against exclusion of resource revenue.

Alberta was schizophrenic, at times saying they wanted resources revenues excluded, but at the same time saying they pay too much so they should not have to pay more.

Here ya go:

Mar 20, 2007:

"Stelmach thrilled 'double equalization' is over: Alberta no longer penalized in payout of federal dollars for health, education"
http://www.uofaweb.ualberta.ca/govrel/news.cfm?story=58105

http://www.uofaweb.ualberta.ca/govrel/news.cfm?story=57971
"Alberta and other petroleum-rich provinces objected to a 2006 report recommending a new formula for Canada's equalization program that gives poorer provinces an extra $900-million a year with two-thirds for Quebec"

Nov 11, 2005:
"Equalization payments shortchange Ontario: McGuinty"
http://www.cbc.ca/canada/story/2005/02/11/mcguinty-equalization050211.html

April 12, 2006
"Ontario premier under fire for equalization plan"
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20060412/ont_equalization_060412/20060412?hub=Canada

May 10, 2006:
"Using equalization to fix so-called fiscal gap unfair to Ontario: McGuinty"
http://www.canada.com/topics/news/national/story.html?id=763cc2b3-3dce-4ec4-871a-1b37f5ce4351&k=49784&p=1

May 30 2006:
"Ontario's premier kicks off cross-country provincial equalization crusade this week"
http://www.uofaweb.ualberta.ca/govrel/news.cfm?story=46388

June 9, 2006:
"Mr. McGuinty said equalization has increased 30 per cent over the past four years and he sees no need to hike it further"; 13/6/07 10:51 PM
Mark:: Sean,

all of those quotes are from AFTER Harper's promise and FOLLOWING the Atlantic Accord deals of 2005.

Go look at their comments beforehand. At one point Pierre Bourqe posted a .pdf of Dalton's hand-written note to Williams. It was priceless.; 13/6/07 11:01 PM
Paul:: Typical Central Canadian attitude. How about some history? How do you suppose Alberta and Ontario ever got as BIG as they are now, land-wise? Answer, they were GIVEN huge swaths of land in the early 1900s. Why didn't Nova Scotia get bigger? C'mon, this one's easier. Right, there was no more land. Just ocean. More history. Alberta was helped out enormously when it was in poor financial condition with federal equalization-type payments. Look where they are today.

What a joke to say Newfoundland and Nova Scotia are better off than Ontario. I suppose we'll soon be seeing all those Ontarians heading east, then, looking for jobs in the gold-covered streets of Halifax and St. John's. Oh yeah, it's actually the other way around.

Those two provinces are so debt-ridden right now, their level of services in no way compares with Ontario, let alone Alberta. The accord was seen as a chance to help pay off that debt, climb out of their economic hole, but no, Ontarians and Albertans are worried about being taken ADVANTAGE of by their poor Eastern cousins. The self-righteousness and ignorance here is sickening.; 14/6/07 3:07 PM
Mike Jr:: ....what?

Ontario should pay equalization payments to Nova Scotia because there was land west of Ontario and ocean east of Nova Scotia? I suppose it makes as much sense as any other argument for the Atlantic Accords.

On equalization, the whole point is that provinces with cash help out those who have less. If the offshore resources that we all pretend belongs to Newfoundland & Labrador makes them wealthier, isn't it logical that their share of equalization goes down?

As for Ontario, it has NEVER benefitted from equalization. When the formula dictated that Ontario should receive payments, it was replaced by a formula that didn't. Outside of Dalton McGuinty, no one really complains about the multibillion dollar annual drain on Ontario. Nova Scotia loses $1 billion over 10-15 years offset by $97 million in new annual equalization and they complain. (well they actually SUPPORTED it before Danny Williams started campaigning against Harper.)

Furthermore, while it's nice to pretend that the Accords were some calculated attempt to accomplish a noble end, in reality Paul Martin threw money at Atlantic Canada to shore up support before an election, much like he did with the Kelowna Accord. We can't run a country like that ('like that' meaning 'like Paul Martin').

If there were a good reason for the Accords, Calvert and Williams would have mentioned it by now. Instead they keep talking about a broken promise, regardless of whether or not that promise was dumb. Calvert and Williams know that no one who acts in the best interests of Canada can support their claim, which why they can never say the Martin-era side deals were good for Canada.

Even the Liberals and Dippecrats assail the Tories for breaking a promise, because they are opposed to the side deals as much as the Tories.; 14/6/07 8:46 PM
Mike Jr:: PS

for all of the equalization payments they received, Alberta is swimming in money because it aggressively developed its oil fields. No one should want to receive equalization payments, everyone should endeavour to build their economy.

Oh, if ONLY there was some oil in that big ocean east of Nova Scotia! Surely that could be used to make the lowly Atlantic provinces an economic powerhouse, capable of escaping from under the heel of Ontario!

Unless some incompetent loudmouth Premier scared all the oil companies away. But who could be THAT incompetent?; 14/6/07 8:54 PM
Sean:: What is truly sickening is the recipients of an annual gift for 50 consecutive years, claiming the moral high ground when they complain that they are not getting enough.; 14/6/07 10:25 PM
paul.obeda@:: "How do you suppose Alberta and Ontario ever got as BIG as they are now, land-wise?"

Because, after all, Ontario's wealth is derived from its vast size.

If a small fraction of its landmass, say, south of the Trans-Canada Highway (or even south of the 49th Parallel) were severed from the Rest of Ontario, that larger northern landmass would be better off for it.

Or maybe not.

Anyone care to compare the landmass of NS or NB (or even PEI) to comparable land areas in Southern Ontario? In Southern Quebec? In the Northeastern United States?

AC: great At-Issue panel tonight. I certainly agree with you regarding the Libs (via C-288) making themselves look a bit foolish for saying that the Conservatives should accomplish in eight months what the Liberals couldn't get done in ten years. (Including, by extension, the clause that C-288 excluded: that the Kyoto Protocol requires countries to "make significant progress" by 2005).

(Interesting that on the budget, M. Dion seems to either claim no influence over the Liberal Senators, or have no desire to influence them, to get the Senate to pass Canada's budget as passed by the HoC.)

Then, given the importance today of the Environment file, I'm surprised nobody on the panel seemed bothered by the fact that more than 50% of Canadians seem to Not want M. Dion to achieve his sole political goal as leader of the opposition - to govern. If that doesn't make him the most over-rated politician, who else possibly could be?; 15/6/07 12:25 AM
Rsimpson:: Lets get something straight here...its not "other province's money"...its Government of Canada money and GovCan is not subject to the wishes of any province as to how it spends its revenues. This notion that somehow its Alberta's money or Ontario's money and has some prior claim is simply foolish, self-serving and beside the point.
That being said, Nova Scotia and Newfoundland are surely trying to have their cake etc. etc.
On the other matter no one including AC should expect that what is said in Opposition or even on the Campaign Trail binds the Government to a strict course of action, agreeable to all.; 15/6/07 6:35 AM
Anonymous:: You are nothing but a right-wing shill. I'm from NS, and we are tired of being screwed by you f**king *ssholes.; 15/6/07 6:49 AM
Paul:: You've got to be seriously deluded if you think, for a second, that Nova Scotia and Newfoundland are wealthier than Ontario. If you believe that fairy tale, I suppose, the rest of the supposed "logic" feels right. Personal taxes and the sales tax are way higher and services are considerably poorer. That's not whining, those are facts.

As someone else mentioned, Ontario and Alberta taxpayers are not paying equalization to anyone. All federal taxes go to Ottawa. Ottawa sends certain payments, called equalization, to some provinces to try to reduce the disparity in services. Taxpayers in Nova Scotia are no further ahead, and still end up with poorer services, just not AS poor.

Of course, no one in central Canada wants to talk about other supports Ottawa provides to their region, other flows of federal money into Ontario that aren't called equalization, or, heaven forbid, things like the Auto Pact. Those are national "investments," after all.

N.S. was screwed by Confederation, when central Canada, under MacDonald, immediately put in place tariff policies that hugely benefited their manufacturing base but destroyed Nova Scotia's north-south trade with New England.

Dismiss the land differences all you like, AFTER you do the research.

Nova Scotia has the oldest population in Canada, because young people leave to find work and older folks like to retire there. That makes health care expenses higher but hurts the government's take from income taxes. Of course, the province wants to climb out of debt and forego equalization. The offshore was seen as an opportunity to perhaps do so. By clawing back whatever income is generated, Ottawa is merely ensuring equalization will be needed in Nova Scotia for many, many years to come.; 15/6/07 8:25 AM
Anonymous:: Hey Ron Jr.

Alberta would have been developed with or without Albertans. Besides most of the people working the fields are frome somewhere else. The capitial behind the fields are Americans

You just happen to be lucky enough to be born on top of the largest petroleum resource on the planet that is so easty to process all you do is dig.

Offshore oil fields are a bit more tricky. A land exxploration well cost $3 million to dig- An offshore one costs $100 million.

As for equalization Ontario and Alberta pay jack shit. Its a federal program.; 15/6/07 9:12 AM
Raging Ranter:: Check this out. Michael Harris at his sneering best dismisses Andrew Coyne's statistics that show "incomes" are higher in Newfoundland than in Ontario. Maybe Harris should read the article before writing one of his own in rebuttal. I could have sworn AC was talking about government revenue per capita, not income.

http://tinyurl.com/2w6mwk; 15/6/07 10:49 AM
Mike Jr:: True, it's not the provincial government that pays into equalization, but the money is taxed from people in all provinces and sent to provincial governments except Alberta, Ontario, and BC this year.

Good point about Ontario's wealth being concentrated in a small land mass which outproduces almost any other similar land mass in Canada.

As for the Auto-Pact, it's dead, and has been since Jean Chretien and Mike Harris were in office. Furthermore, the Auto-Pact didn't require any taxpayer money to subsidize the auto industry, it merely allowed Canada-made cars to be sold tariff-free to the US.

As for the thing Macdonald did over 100 years ago to screw NS, you have to remember that the National Policy had to be implemented only because the Reciprocity Treaty was cancelled by the USA when Canada got a trade surplus, and they tariffed the hell out of the hated British (which was us back then).

Not only were Macdonald's tariffs weren't as high as the Americans' tariffs, but they didn't slow down exports to the US AT ALL. Tariffs work the OTHER way, and it was the American tariffs we had no control over that slowed NS exports. Remember, back in those days everyone was mercantilist, and there wouldn't be an American who successfully freed up trade with us until the mid-1930's, and that was because the Depression left FDR with no other option.

So after having done the research on the historical economic relations of Canada and the United States, as well as interprovincial disparities I feel confident in dismissing the land thing. Especially since the largest province (Quebec) receives the biggest payout.

If you want a valid complaint about equalization, it is that it ignores debt. It should calculate all provinces' revenues from all sources, then subtract 115%(or a number based on scrupulous calculation as I pulled it out of nowhere,) of the amount paid on debt service. This would help provinces hurt by debt (not historical injustices caused by evil Ontario as some would claim,) while keeping the damn formula objective. (NO SIDE DEALS) Of course, we would need a lower deduction for all those who run deficits, but I'm done with thinking for today. All that research made me tired. And I kind of want to slap Jack Granatstein and Michael Bliss for some reason...; 15/6/07 3:18 PM
Sean:: The assertion that equalization is a federal program is irrelevant.
All Canadians are taxed but the taxes are directed towards only some Canadians. All the feds do is act as a middle-man.

One thing is for sure, equalization is a concept that pits one province against another. But since the feds run it the provinces attack the feds instead of each other.

I don't think I could do a better job than AC explaining the issue. Once you get past the seemingly small issue of Harper's comments, it seems to me that the three premiers are showing a lot of arrogance and a lack of respect for the principle of equalization, and a lack of respect for all Canadians outside their own borders.; 16/6/07 3:53 PM
Anonymous:: Equalization was a putrid vote buying scheme from the get-go. It's as mean and perverse as every other welfare program, because it is the transfer of wealth at gunpoint from one group of people to another, disguised as "compassion" and "generosity".

Anyone - say, for example a certain Prime Minister of allegedly fiscal conservative leanings - who does not acknowledge these essential facts about the interprovincial welfare program, who pretends that he can make it "smart" or "balanced", is either a fool or a cynical power-grabber. Not that I really blame him if he's the latter ... what with the tremendous salary, gold-plated benefits, party slush fund, and post-political lobbying and directorship gigs, it's clearly a smart way to get ahead. Just utterly bankrupt from a moral point of view.

Lets get something straight here...its not "other province's money"...its Government of Canada money

To those Canadians who thought there was some kind of connection between work and reward: Pwned!; 17/6/07 10:40 PM
Observer:: Harper found himself between a Rock and a Hard Place on this one. Give Williams what he wanted and McGuinty would crucify Harper in Ontario .. or ditch the Newfies and run with the prospect of gaining in Ontario.

This was a no-brainer ... bye bye fishheads .. hello 50+ CPC MPs from Quebec and a pile more from Ontario and a chance to rack up a majority government.

With only 9 CPC MPs in the Maritimes and no prospect of gaining anything there, Harper did what was necessary to go for the bigger prize ... the coveted majority government .. and bye bye Peter Mackay ..!!; 18/6/07 12:22 AM
Chuck:: I feel confident in dismissing the land thing. Especially since the largest province (Quebec) receives the biggest payout.

Not to dismiss the rest of your argument but the fact that the largest province receives the most federal money doesn't negate the importance of size (thus available resources). It simply proves that in spite of being endowed by nature and governments with every advantage imaginable it's still possible to squander one's opportunities.; 19/6/07 8:09 AM
Derek Pearce:: "What the premiers are demanding is some mythical third option, one with higher payments, no clawback, and no cap. They want the best of three worlds: to have their cake, eat it, and spin it above their heads."

This completely sums it up. And any arguments saying "it's not robbing Ont and Alb because it's a federally taxed and distributed program" is rubbish-- if equalization didn't exist then that would mean more money in the pockets of Alb and Ont taxpayers. And as for the Nova Scotian above who said he's sick of getting screwed, talk to your own provincial government buddy, it's not Ontario or Alberta's fault that 8 out of ten provinces can't run a real economy.; 20/6/07 9:31 PM
Derek Pearce:: I wish to somewhat correct myself-- without equalization there would be more money in the pockets of ALL Canadian taxpayers, or if the same amount of taxation occured but still no equalization occured then Ont and Alb would recieve more federal spending at least. Nevertheless I'm puzzled how in this age of free trade/globalization (ie no domestic tarriff protected markets and therefore no tradeoff), Ontarians aren't pissed off at this ongoing fleecing we endure.; 21/6/07 1:48 AM
KRB:: To hear the leaders of NL, NS and any other "have-not" province speak, it's as though the example of Iceland didn't even exist.

$38,100 GDP per capita (PPP), higher than Canada's.

All with little mineral or resource wealth.; 21/6/07 1:27 PM
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Nova Scotia's sweetheart deal

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