Provinces spat over Harper's mystery promise
Last Updated: Thursday, January 19, 2006 | 6:14 PM ET
CBC News
A dispute has erupted between Saskatchewan and New Brunswick over a financial promise Conservative Leader Stephen Harper may or may not have made during the election campaign.
Premier Lorne Calvert said this week that Harper promised to change Canada's equalization formula to a system that's friendlier to Saskatchewan. Conservative candidates in the province are also repeating the pledge for a new approach to equalization that would benefit wealthy provinces.
- FROM JAN. 18, 2006: Conservative win would mean action on equalization: Calvert
- RELATED STORY: We need equalization deal now: Premier
But New Brunswick Premier Bernard Lord opposes that change, and doubts Saskatchewan has been promised anything of the sort by the Conservative leader.
Lord has been an excited backer of Harper through the entire election campaign. He's embraced Harper at rallies and endorsed his program of change for Canada.
Equalization is New Brunswick's most important federal government program. The program helps Canada's 'have not' provinces pay for basic services like health and education. More than 20 per cent of New Brunswick's entire revenue comes from equalization and any change in payments would have a dramatic effect on the province's ability to serve its citizens.
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The equalization formula is presently under review in Ottawa, and this week, Calvert and Conservative candidates said a Conservative government would change equalization to exempt provinces' non-renewable natural resource revenues when calculating payments to provinces.
"The Conservative party and its leader have made a very clear commitment to the province that if they form government, non-renewable resources will be excluded from the equalization calculation and that in essence solves our long term problem," Calvert told CBC News.
Exempting resources such as oil and gas from the equalization formula makes resource-rich provinces like Saskatchewan, British Columbia and Newfoundland appear poorer than they are and eligible for more equalization payments, at the expense of provinces without oil and gas like New Brunswick.
Bernard Lord is stiffly opposed to that kind of formula. Last year, New Brunswick Finance Minister Jeannot Volpé outlined the province's opposition in this official presentation on equalization to the federal government. "The removal of resource revenues from the program," Volpe told federal officials, "would have considerable adverse consequences on New Brunswick."
Thursday, Lord said he doesn't believe Stephen Harper has promised Saskatchewan anything on equalization. "These words come from Lorne Calvert, who I respect, he's a friend of mine, he's the NDP premier of Saskatchewan, and not from Mr. Harper. What Mr. Harper has said is these things will have to be negotiated after the fact."
But Saskatchewan Conservative incumbent MP Tom Lukiwski says just the opposite. "We've consistently stated that if we are elected into government we will be revising the equalization formula to remove the non-renewable natural resources which would result of course in Saskatchewan retaining 100 per cent of its oil and gas revenues among other things," said Lukiwski. "I think it's fair to say if we make those changes under current circumstances with current prices Saskatchewan would be $2 to $2.5 billion wealthier each and every year, so its a very significant program for Saskatchewan."
But the New Brunswick premier is adamant. Lord doesn't believe equalization promises have been made by Conservatives in Saskatchewan even though clearly voters and politicians in that province do.
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