Navigating the abyss: 2009 - 2018
Equalization and its impact on Cape Breton
Following the 2009 decision of the Nova Scotia Court of Appeal and the decision in the same year of the Supreme Court of Canada not to hear the case on appeal, there was very little further discussion of equalization. Any hope of a legal remedy had disappeared.
In place of a legal solution, there was some hope that Premier Darrell Dexter, whose government was elected in the summer of that year, would be somewhat sympathetic with Cape Breton’s predicament and might well find some political mechanism to address the situation.
This view was based upon, among other things, his statement in the provincial legislature in May of 2005. At that time, as Leader of the Official Opposition, Dexter said the following:
“Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:
Whereas the Union of Nova Scotia Municipalities has released a landmark report entitled: A Question of Balance: An Assessment of the State of Local Government in Nova Scotia; and
Whereas the report concludes that because the province equalizes to a standard of 40 per cent of normal expenditures, it does not enable municipalities to provide reasonably comparable services at reasonably comparable tax rates; and
Whereas the report also found that the province ignores the differences between commercial and residential assessment when measuring ability to pay;
Therefore be it resolved that the province should respond positively to the UNSM report by taking immediate steps to close the door to manipulation of the equalization formula and to close the widening gap in ability to pay for basic local services.” (Mr. Darrell Dexter, Nova Scotia Legislative Assembly, Oral Questions, May 5, 2005.)
These hopes were unfounded as evidenced by the correspondence first from Minister Graham Steele and, then in 2013 from then Finance Minister Maureen MacDonald. In correspondence to Charles Sampson of Nova Scotians for Equalization Fairness (NSEF), she stated: “Nova Scotia’s federal Equalization payment is an unconditional payment that has no bearing on how the Province distributes grants to its municipalities.”
There was also some renewed hope that the situation might be addressed when the Liberal government of Stephen McNeil won a majority victory in 2013. Unfortunately, once again, a political remedy seems impossible.
In fact, in recent correspondence (March and April of this year) from both Minister Derek Mombourquette and Minister Karen Casey there appears to be no real interest in considering the issue.
Minister Casey writes: “I will conclude by drawing your attention to the fact that the Nova Scotia Supreme Court, the Nova Scotia Court of Appeals, and the Supreme Court of Canada [2], have all dismissed or refused to hear the argument that the CBRM is not receiving the equalization funding to which it is entitled; municipalities are not entitled to federal equalization funding.”
Minister Mombourquette, who is the Minister of Municipal Affairs, wrote: “[t]he amounts paid to municipalities under this program [municipal equalization] have been frozen since fiscal 2015-16 while we explore other options that better support municipal service delivery.”
Obviously, Minister Mombourquette, who was also on CBRM council when the legal action was underway, knows that the municipal equalization fund was frozen long before 2015. It is troubling that he would try to mislead on this key fact.
His statement that there is an exploration for other options to replace the equalization program may suggest that the provincial government has become particularly embarrassed by the long-standing under-funding of municipalities and needs to eliminate the program altogether.
The irony of such a move at this time is that, as mentioned previously, the terms of the federal equalization program are to be renegotiated between the federal government and the provincial governments over the next year.
We knew as a region in 2009 that there was no legal remedy for the equalization underfunding and since 2009 it has become obvious that none of the political parties in Nova Scotia have any serious commitment to implement a political remedy.
Most surprisingly across the many years has been the almost complete silence of the provincial and federal elected representatives in Cape Breton within all parties. The silence really has been deafening particularly since the economic and social data is overwhelming in showing that Cape Breton is literally being strangled to death.
NEXT WEEK: Eight-part series will conclude with “Assessing the Future.”
“Most surprisingly across the many years has been the almost complete silence of the provincial and federal elected representatives in Cape Breton within all parties.”