Harper’s Divide and Conquer Strategy on Equalization
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According to the most recent Statistics Canada Census, Newfoundland and Labrador’s population is continuing its free fall, a situation that has existed since the collapse of the federally mismanaged cod fishery in the early 1990′s.
Newfoundland and Labrador, which last year had the distinction of being the only province in Canada to see the number of deaths match the number of births, for the first time in the Country’s history, has been reporting a net population loss ever since the economic turmoil created by the dismal failure of Ottawa to protect and preserve Atlantic fish stocks began to hit home.
Interestingly Statistics Canada noted that population losses were reported in only two Canadian provinces, Newfoundland and Labrador and Saskatchewan. Is it a coincidence that these are the same two provinces fighting tooth and nail to ensure that Ottawa allows them to recieve the full benefits of local non-renewable resource revenues in an effort to grow their economies?
Most certainly not!
With the ability to increase revenues these provinces would have an opportunity to improve their economies, foster development, pay down debt and attract and retain citizens.
Unfortunately it’s beginning to look more and more like Prime Minister Stephen Harper is about to walk away from the promise he made to Canada on this issue prior to the last two federal elections and will soon kill any hope the two provinces have of ensuring their very survival.
Over the past few days Harper has announced $1.5 billion for Ontario’s transit system and $350 million will go to Quebec for environmental improvements. Clearly an attempt to buy support for his new budget, scheduled to come down on March 19th, and to ensure that the two provinces don’t fight too hard over his likely exclusion of 50% of non-renewable resource revenue in the equalization formula. Both would prefer to see 100% of the revenues included since their economies are not dependent on natural resources.
On the other side of the battle front Harper has announced hundreds of millions for Alberta, after which Alberta immediately backed away from their support of exclusion of non-renewable resources. A stand they had taken in support of Saskatchewan and Newfoundland and Labrador. This has left only these two provinces and BC to fight on. Of course with this divide and conquer approach happening one has to wonder how long it will be before Newfoundland and Labrador is left to twist in the wind on its own.
In addition to buying off Ontario and Quebec, Harper has also announced $200 million for BC, a fairly quiet ally of Premiers Williams and Calvert. He has also announceder $1 Billion in aid for farmers in Saskatchewan, obviously an effort to buy off voters there and weaken the position of Premier Lorne Calvert who wasn’t even invited to attend the press conference held in his province. Perhaps BC and Alberta should have been more vocal on the issue early on. Looking at the numbers being thrown around lately it seems they might have gotten a bigger bribe if they had been more vocally opposed to Harper’s flip flop on this issue.
With all of this to consider, the message should be very clear to Premier Danny Williams and the people of Newfoundland and Labrador. Sorry folks but once again you’re on you own. Say goodbye to the victory gained during the Atlantic Accord battle because if 50% of non-renewable resource revenues are included in the new formula and a cap is put in place to ensure that no equalization receiving province can have a greater fiscal capacity than Ontario (the sacred cow of politicians) then any gains made on that front will disappear into the darkness faster than a politician the day after winning an election campaign.
By Myles Higgins
@ March 27, 2007