Time to fix the equal­iza­tion im­bal­ance

The Packet (Clarenville) - - Editorial -

Dear Edi­tor,

While New­found­land and Labrador is be­ing told to make do with zero in equal­iza­tion fund­ing again this year, Que­bec’s cut of the equal­iza­tion pie will in­crease again this fis­cal year to $11.7 bil­lion.

Last year, Que­bec re­ceived $11.1 bil­lion in equal­iza­tion. With that wind­fall, they brought in a bud­get with a $2.5 bil­lion sur­plus, cut taxes and strength­ened pub­lic ser­vices.

Que­bec Hy­dro con­tin­ues to gen­er­ate mas­sive rev­enue in the bil­lions from the 1969 Up­per Churchill con­tract which re­cently hit a 25-year au­to­matic re­newal clause which low­ers what they are pay­ing N.L. for hy­dro power, pay­ing just a fifth of a cent per kilo­watt hour and re­selling that power for a bo­nanza on the mar­ket. This rev­enue is not in­cluded in the cal­cu­la­tions for Que­bec’s en­ti­tle­ment to equal­iza­tion.

Over the past decade, Que­bec has re­ceived $91.6 bil­lion in equal­iza­tion pay­ments. No other prov­ince even comes close. Our prov­ince re­ceived zero.

When oil prices fell through the floor, as they did for Saskatchewan and Al­berta, equal­iza­tion should have been there to cush­ion the down­turn.

That’s be­cause the Con­sti­tu­tion of the coun­try guar­an­tees it. Sub­sec­tion 36(2) of the Con­sti­tu­tion states: “Par­lia­ment and the govern­ment of Canada are com­mit­ted to the prin­ci­ple of mak­ing equal­iza­tion pay­ments to en­sure that pro­vin­cial gov­ern­ments have sufficient rev­enues to pro­vide rea­son­ably com­pa­ra­ble lev­els of pub­lic ser­vices at rea­son­ably com­pa­ra­ble lev­els of taxation.”

That means we should not have to raise taxes through the roof to main­tain ser­vice delivery at rea­son­able taxation lev­els. Equal­iza­tion’s role is to kick in to bridge the gap for all of the equal part­ners of this fed­er­a­tion we call Canada.

Has the cur­rent for­mula been mod­ern­ized to re­flect the de­mo­graphic changes in At­lantic Canada and the delivery of ser­vices? Has it evolved to al­low prov­inces to reap greater rev­enues from nat­u­ral re­sources?

We are fac­ing a third pro­vin­cial bud­get un­der the Ball govern­ment. The first two, taxed us to neg­a­tive rates of growth in our econ­omy and most eco­nomic in­di­ca­tors are go­ing in the wrong di­rec­tion. We have great op­por­tu­ni­ties in our prov­ince for eco­nomic suc­cess but gov­ern­ments help cre­ate that cli­mate. Be­ing un­com­pet­i­tive in taxation pol­icy is not a good start.

Canada pro­vides trans­fer pro­grams to as­sist with the above but un­for­tu­nately we are not even heard in Ot­tawa as no one is speak­ing for us.

Que­bec, on the other hand, is liv­ing on the spoils of all the fights of the past. In an Oc­to­ber 2017 re­port, Ot­tawa’s Par­lia­men­tary Bud­get Of­fi­cer (PBO) pro­jected that, by 2091, Que­bec’s share of Equal­iza­tion will have grown from 60 per cent in

2017 to 75 per cent of the to­tal pot. The un­fair­ness is bla­tantly ob­vi­ous. New­found­land and Labrador can make a great case, if we had those to make it.

In fact, western prov­inces were pre­pared to fight, but Dwight Ball re­fused to take up their of­fer to make it a joint na­tional cam­paign for fair­ness.

In­stead, he forced our peo­ple to pick up the slack for lost oil rev­enues by shoul­der­ing more than

300 tax and fee hikes — most of which will prob­a­bly stay in place in Bud­get 2018.

Those tax hikes have crushed our econ­omy, crushed fam­i­lies, busi­nesses, com­mu­ni­ties and sent our peo­ple away.

There’s a real im­bal­ance in this coun­try, and some­one ought to be rais­ing their voice to point it out and get it fixed.

It won’t be easy to get equal­iza­tion fixed, but it will be ab­so­lutely im­pos­si­ble to fix things if no one both­ers to stand up to make the case for New­found­land and Labrador.

On Pre­mier Ball’s third bud­get and over two years as govern­ment it should soon be time to make the case for New­found­lan­ders and Labrado­ri­ans at the Ot­tawa ta­ble.

Keith Hutch­ings,

PC MHA Fer­ry­land, Op­po­si­tion Fi­nance critic

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