Calvert, Williams join forces in Saskatoon over equalization fight

Last Updated: Tuesday, January 23, 2007 | 9:38 AM CT

CBC News

Saskatchewan Premier Lorne Calvert and Newfoundland and Labrador Premier Danny Williams joined forces in Saskatoon Tuesday to air their concerns about the federal equalization program.

Ottawa is looking at changing the $11-billion program that is supposed to close the gap between "have" and "have-not" provinces, prompting the premiers to form what Williams called "an alliance of accountability."

Both premiers are worried their provinces will lose money under a revised plan and they spoke to students at the University of Saskatchewan about the issue.

One of their concerns is how a new equalization formula would factor non-renewable resources into the calculations.

"The issue for Premier Calvert and me is not about handouts from Ottawa," Williams said. "The issue is about enabling each and every one of us to use the natural resources at our disposal to achieve sustainable self-reliance within the federation."

In Saskatchewan's case, surging oil and gas revenues mean the province will get nothing from equalization in the next fiscal year.

Newfoundland and Labrador, which has a special deal called the Atlantic Accord that exempts those revenues from the formula, is scheduled to receive at least $477 million. Williams is worried about seeing that equalization cash clawed back.

"What we are seeing, of course, is a tremendous economic growth in Newfoundland and Labrador. We're seeing the same kind of economic growth here," Calvert said. "Let's seize it for all Canadians for our future."

During the election campaign, the Conservatives said they'd take non-renewable resources out of the equalization formula and make other changes that Calvert says would give Saskatchewan an extra $800 million a year. Although Saskatchewan's Conservative MPs have said Harper will live up to his commitments, Calvert has fretted that they're planning to break that promise.

Williams said he has counted six times when Harper committed to taking non-renewable resources out of equalization.

In recent days, Saskatchewan Finance Minister Andrew Thomson has accused Ottawa of trying to buy Quebec votes with Western oil. Quebec will get more than $6 billion in equalization payments next year, more than half the $11 billion in the program.

Williams said he doesn't want to see province pitted against province. If living up to his campaign promises affects other provinces, the only solution for Harper is to increase the overall pool of money, he said.

"He has to move the other provinces up," Williams said.