Da Legal Stuff...

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Tuesday, April 10, 2007

Sue Kelland Dyer - Adding Sarcasm & Wit to the Equalization Fiasco

I’ve noticed that many of my readers also take the time to read the articles of local activist and commentator Sue Kelland-Dyer. While Sue and I may not always agree on issues of concern in Newfoundland and Labrador I believe that at heart we both want what's best for the province and the people here. This is why I was so pleased recently when I heard some comments from Ms. Dyer about the Harper equalization fiasco on an open line program. I was doubly pleased with the wonderful idea she proposed for resolving the current impasse.

I’m sure Ms. Dyer presented the plan with her tongue firmly planted in cheek, (I know she brought a smile to my face) but she also raised some good points in the process and since Sue hasn’t been doing much writing lately (and I was stuck for an article) I figured I’d share her thoughts with you all. (paraphrasing of course)

The idea was quite novel really.

First the background:

As we all know Stephen Harper promised on multiple occasions, in several locations and in two elections to remove non-renewable resource revenue from the equalization calculation. No Caps. No 50% inclusion. No limitations of any sort. 100% removal was the promise made and the promise broken. Harper claims the government didn't break any promises. Yes, He and the Conservative party did break a promise but since they weren't actually the government at the time he made the promise, technically I guess he's right. (Don't you just love the ease with which sleazy politicians twist the truth)

Anyway, enough said on that.

Another fact is that equalization is based in part on a province’s population. Essentially the federal government does a head count, identifies how much revenue a province has at its disposal and based on both of these figures calculates the amount of equalization to deliver (or not) to the province.

In the Newfoundland and Labrador context, we all need to understand that the backbone of our economy for centuries has been the fishing industry. A fishing industry that has been decimated because of mismanagement and trade negotiations carried out by the federal government. As a result of their mishandling of the file the province’s fishing industry collapsed a couple of decades ago resulting in a moratorium being instituted in 1992. Fifteen years later the cod still haven’t returned.

The moratorium saw over 20,000 people leave the province at the time and the exodus is still going on. As a result, thousands upon thousands of Newfoundlanders and Labradorians are now having their heads counted elsewhere and, in addition to working and paying taxes, are helping to increase the amount of equalization funding provided to other provinces. On the flip side of the coin, since the head count here has fallen so dramatically the amount of equalization available to Newfoundland and Labrador continues to fall.

The idea is simple according to Sue. (I just love this) Since the federal government presided over the collapse of our province’s main industry, Newfoundland and Labrador should simply agree to accept the equalization cap and even the inclusion of 50% of resource revenues, but only when the cod come back.

The federal government presided over the collapse of the province’s economic engine so the least they should do is allow Newfoundland and Labrador to generate economic stimulus needed to replace it.

Good one Sue. I doff my hat to you.


Anonymous said...

Thanks Patriot - A great tribute for a great mind! Sue Kelland Dyer should run for a Federal Post. What an excellent candidate we would have there!

Anonymous said...

Another great Article ,Patriot.

"Calling ALL Newfoundlander's And Labradorian's"You have a gift here from God .Its time to stand -up for your familys and your future.For the love of God people help her,help you.Befor it's to late.


Anonymous said...

I think Sue is on to something for sure. The feds destroy the fishery, try to control the offshore against the wishes of the people of NL and now they have the nerve to lie to us and break major promises.

It boggles the mind. Where else would people put up with this?

Hopefully we have turned the corner in our thinking and won't take this crap any longer...

Anonymous said...

"The federal government presided over the collapse of the province’s economic engine so the least they should do is allow Newfoundland and Labrador to generate economic stimulus needed to replace it."

With all respect Mrs Dyer,I agree with your statement,but I wouldn't hold your breath on that happening.Let's be honest,when was the last time that canada has helped Newfoundland and Labrador with anything.
58 years ,and I'm still waiting for the oppurnity to "Apply" for a job in my home province.Let's be truth with each other.Until we do it for ourselve's ,it just won't happen.

Anonymous said...

The Article below written by Walter Noel appeared in today's "The Telegram". Please take the time to read this great article, it is quite explanatory.


Equalization is sharing benefits, not generosity

April 9, 2007

Canada’s federal system confers costs and benefits. Equalization is the way the Government of Canada partially compensates provinces which are disadvantaged. Without it, the country would not exist because the disparity in benefits would be intolerable.

Ontario is not an equalization recipient because it has been the prime beneficiary in other ways. Quebec gains the most through equalization and ranks second in other assistance, such as the recent $900 million commitment to the aerospace industry. They have been the big winners because they control the House of Commons. They win through the concentration of business and government activities Ottawa bestows on them through national policies, subsidies and transfers.

The equalization compensation each province receives is determined by its fiscal capacity - its ability to tax. This may be a convenient formula, but is not an accurate measure of the relative economic health of provinces. Two could have the same fiscal capacity but much different levels of employment, debt, cost of providing services, etc.

Newfoundland and Labrador is on the verge of reaching Ontario’s fiscal capacity, but our economy remains far weaker. And taxing ability based on liquidating finite non-renewable resources is different from that based on renewable activities which continue producing indefinitely.

Ontario has not received equalization because it enjoys so many other benefits provided by Ottawa. Alberta is not presently receiving because its economy is doing well - as a result of its oil wealth. Unlike Ontario, its prosperity is not dependent on federal government favors. All the other provinces have been recipients, with Quebec consistently receiving the most, in addition to receiving the second highest share of other benefits. It only has 25 per cent of the population but will receive 33 per cent of all transfers this year.

New ways have to be found to better share the benefits of our federal system. The recent budget increased equalization payments, but also provides for other transfers more beneficial to the large provinces. The agreement to exclude non-renewable resource revenues from equalization helped the provinces affected, but, as a result of this budget, will in future be reduced by 50 per cent and capped. The combined changes will benefit Quebec most, and hurt Newfoundland and Labrador most.

Non-renewable resource revenues should not be included in the formula because they are different from other economic activities. All resources are capital assets, but non-renewables are finite. When they are depleted, when all the minerals or oil is gone, they will no longer provide jobs or revenues. They should not be treated the same as industries such as banking, farming and manufacturing which make Ontario wealthy, with Ottawa’s help.

Canada’s political history has been a fight for the benefits which would not exist if Canada was not a country. Ontario and Quebec would not be in the center of a country, they would not have the excessive concentration of government and industrial activities, and the rest of the country would not be their captive market. There would not be any vehicles built in Ontario; automobile manufacturing would not be the cornerstone of its economy. There would not be very costly financial assistance to help preserve the French identity.

The equalization program is either welfare, or it is an attempt to share the benefits of Confederation. If it is the former, as Ontario would have us believe, the recipients should be thankful for what they receive. If it is the latter, it should be equitable. Any proper study of Canada’s economy would demonstrate that it is the latter, and it fails to share adequately. Such a study would document just how much other Canadians contribute to Central Canada’s prosperity.

Years of equalization payments have not changed the fact that Newfoundland and Labrador contributes more financially to the country than it receives. The federal government might spend more than it collects here directly, but our contribution to the economies of other provinces far exceeds their contribution to ours.

We contribute through buying goods and services from Ontario and Quebec, instead of from other countries where they could be obtained more cheaply. We contribute our own taxes, in addition to those collected elsewhere because of economic activities we create. We contribute through exploitation of our resources, in particular through providing far more revenues for Quebec than for ourselves as a result of the Churchill Falls Hydro project - because Ottawa refused to enforce our right to transmit power across Quebec, or to compensate us for the loss. We contribute through the inflated food prices we pay to subsidize mainland businesses. We contribute through the enormous debt we’ve accumulated to finance the purchase of goods and services from Central Canada.

The country would cease to exist without equalization. Ontario and Quebec would be the biggest losers. The other provinces would be better off financially as independent countries or American states. As Americans, citizens of the smaller provinces would also have more say in national affairs through effective Senate representation.

The provinces which benefit least from Confederation made some progress in recent years through increasing their share of federal transfers and having non-renewable resource revenues kept out of equalization calculations.

Unfortunately, the latest Conservative budget reverses the progress made by these provinces. Prime Minister Harper is obsessed with winning a majority government. Voters in the large provinces of Ontario, Quebec and Alberta are the constituency he is courting. His recent budget initiatives to win votes in those provinces will be very costly for the others. The country needs more equitable sharing of the economic consequences of Confederation, but the Harper government is moving in the opposite direction.