Cape Breton Post

Navigating the abyss: 2009 - 2018

Equalizati­on and its impact on Cape Breton

- John R. MacDonald

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.”

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