Nfld. & Labrador

Don't expect any equalization help from Ottawa, says Dwight Ball

Premier Dwight Ball says it's not realistic to expect Ottawa to ride to the rescue to help Newfoundland and Labrador deal with an unprecedented fiscal crisis, saying "we've got to do this on our own."

Premier says 'we've got to do this on our own'

Newfoundland and Labrador Premier Dwight Ball says the province should not bank on a financial bailout from Ottawa, noting "we've got to do this on our own." (CBC)

Premier Dwight Ball says it's not realistic to expect Ottawa to ride to the rescue to help Newfoundland and Labrador deal with an unprecedented fiscal crisis, saying "we've got to do this on our own."

Ball was questioned Tuesday following the throne speech about whether the province should push for a return to equalization payments from the federal government.

The province gained a so-called "have" status for the first time in its history in 2008, which put an end to equalization, a federal program that ensures comparable levels of public service are provided across the country.

There was a very good job done … of boxing this province out a few years ago.- Dwight Ball

It was largely the result of a treasury being stuffed with cash from oil royalties.

But the worldwide oil slump that began in 2014 has delivered a debilitating blow to the province's finances, with a $2 billion deficit projected for the current fiscal year.

Similar deficits are forecasted for the next five years unless drastic measures are taken.

Ball described the fiscal situation as "terrible," adding his government has signalled that everyone in the province will have to make sacrifices in the upcoming budget as measures are taken to increase revenues, find efficiencies and keep the cost of borrowing as low as possible.

'The program is what it is'

Ball raised the issue of equalization Tuesday, noting that Nova Scotia and New Brunswick will receive hundreds of millions of dollars in equalization payments this year.

A private member's motion is expected to be debated at the House of Assembly Wednesday, asking government to push Ottawa for changes to the equalization payments program. (CBC)

"We'd like to have some of that, but that is not something when you look at the track that we are on that we would even return to a situation where equalization would be available to us, so we've got to do this on our own," Ball told reporters.

When pressed about the circumstances under which Newfoundland and Labrador might again receive equalization payments, Ball said the complex formula makes it very unlikely.

"Given the current program, we could be receiving small amounts. There was a very good job done … of boxing this province out a few years ago," he said.

"Unfortunately right now it would be very limited any amount we would receive in equalization, based on the current formula."

So why isn't the government banging on Ottawa's door, fighting for changes to the formula?

Ball said there will be discussions in the future, but added "the program is what it is."

The issue will likely resurface during Wednesday's session of the House of Assembly, as debate on a private member's motion calling on government to request financial help from Ottawa is expected.

The motion also calls on the federal government to modernize the equalization program and the fiscal stabilization program.

About the Author

Terry Roberts is a journalist with CBC's bureau in St. John's.

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