Stabilization seen as possible peace offering
Saskatchewan’s finance minister says swift action from Ottawa on a proposal to reform a federal program that provides financial assistance to provinces experiencing economic downturns would be a badly needed olive branch.
After meeting with his provincial and territorial counterparts in Ottawa on Tuesday, federal Finance Minister Bill Morneau committed to analyzing suggested tweaks to the Fiscal Stabilization Program and reporting back next month.
Saskatchewan Finance Minister Donna Harpauer said enacting the proposed reforms is likely the “first move” the Liberals can make when it comes to soothing tensions between Ottawa and alienated western provinces.
“It’ll be very telling about how sincere the federal government has been … They have said they will listen and they hopefully will act. I think this will be a measure of their sincerity,” Harpauer said Wednesday.
“This is maybe the first step that they could make to maybe put out an olive branch.”
Speaking with reporters after the finance ministers’ meeting, Morneau stopped short of making specific commitments but suggested his office is open to “potential changes (that could happen) in the near term.”
“I don’t think anyone would argue that Alberta and Saskatchewan and Newfoundland and Labrador are going through difficult financial times. I think we need to look at it in that context. We plan on doing that but we’ve got no conclusions until we do the analysis.”
At the same time, Morneau suggested that is the first step in a longer process.
“We have multiple demands on the federal government, as every one of the finance ministers behind me have as well. We talked about that reality today, we talked about the reality that we all face fiscal constraints,” he added.
Established in 1982, the Fiscal Stabilization Program operates like insurance.
Provinces that experience an annual decline in revenues — five per cent for non-resource revenues and 50 per cent for resource revenues — can make claims and receive reimbursement.
The Saskatchewan-led proposal includes a request to remove the $60-per-capita cap on payments as well as lower the qualifying threshold to an unspecified figure below five per cent.
It also asks the changes be made retroactive to 2015-16.
Saskatchewan did not qualify for fiscal stabilization payments between 1982-83 and 2015-16, and its claim for the 2016-17 fiscal year remains under review by Ottawa. It is thought the changes, if enacted, would qualify Saskatchewan for some payments.
Harpauer said those figures have yet to be worked out but in an ideal world it would be up to $200 million over the last five years.
Asked about her impressions of Morneau’s willingness to find common ground with the provinces following a federal election that saw the Conservatives come close to sweeping the west and the Liberals reduced to a minority, Harpauer said little has changed.
While her federal counterpart “seemed to be receptive” on issues related to fiscal stabilization, Ottawa seems less willing to move on other issues raised during the “fairly controlled” and presentation-dominated meeting, she said.