Evidence of meeting #86 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was reits.
A recording is available from Parliament.
Conservative
The Chair Conservative Brian Pallister
It is six minutes for the question and response, sir, yes. We're following actually--
Premier of Saskatchewan
I see. I'd like to say that I'm going to try to meet the time schedule. I may have to complete this answer in response to a further question.
Premier of Saskatchewan
Let me first say to Mr. Goodale that we recognize progress was being made before the change in government, but it's not the progress we'd ultimately desire. The ultimate desire of the people of Saskatchewan has been to achieve an equalization formula wherein 100% of the non-renewable natural resource revenues would be excluded from the calculation. We have not achieved that.
It is in fact why many in Saskatchewan welcomed the promise made by the Conservative Party, the leader of the Conservative Party, and members of the Conservative Party in our province that this would be the case under a Conservative government.
Mr. Goodale asks, what does the value of this commitment amount to, and where did the number come from?
Well, through the calculations of economists and our own finance experts, the approximately $800 million figure that is generally assigned to this value is very bona fide in terms of the financial calculations. It will be done by economists and people in departments of finance across the country.
It was very much confirmed to us not by New Democrats in Saskatchewan or LIberals in Ottawa, but it was confirmed by members of Parliament of the Conservative Party at the time. I can begin with a number of quotes.
On March 23, 2005, Maurice Vellacott, member of Parliament, Saskatoon—Wanuskewin, said: “Over the past ten years, Saskatchewan would have been entitled to about $8 billion more”. Over 10 years, that's $800 million a year.
From Mr. Brad Trost, Saskatoon—Humboldt MP to the province of Saskatchewan: “To the province of Saskatchewan, this would mean $800 million a year according to Library of Parliament estimates”. Mr. Trost then very kindly explained what we might be able to accomplish with those kinds of revenues for the people of Saskatchewan.
Member of Parliament from Prince Albert, Brian Fitzpatrick, said: “Saskatchewan will continue to lose approximately $800 million per year in equalization”.
Up to and including a question from Mr. Stephen Harper, then leader of the opposition, to Mr. Paul Martin, then Prime Minister:
The Prime Minister is also failing Saskatchewan on equalization. The government promised to reform the equalization program in 2004 for Saskatchewan.
Note these words:
The government now says it will not get to that until at least 2006, costing Saskatchewan over $750 million in lost revenue.
The figure is confirmed by members of Parliament, in the Parliament. I'm told it's confirmed by the Library of Parliament. It's confirmed by our own Department of Finance and other economists in the country that to provide Saskatchewan with its fair benefit for those non-renewable natural resources would mean—and note this—about $800 million on an annual basis.
Mr. Goodale now refers to the current federal budget and benefits being provided to Saskatchewan, which we are told represent about $878 million. I heard it again today. I'm told this is supposed to be the best deal Saskatchewan has ever received. Well, I find that kind of an assessment to be very disingenuous.
Conservative
The Chair Conservative Brian Pallister
I'll let you elaborate in response to a subsequent question, sir, but we have to move on.
Mr. Crête, you have six minutes.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Thank you, Mr. Chairman.
Mr. Calvert, I understand how dissatisfied you are. Nevertheless, Quebec and the Bloc Québécois are supporting the budget and we intend to support it all the way.
You have been a provincial premier long enough to know that for decisions of this kind, if the budget were amended tomorrow morning, an election would have to be called.
Do you have any alternatives that are not related to the budget? Could you suggest what can be done in the future to effectively make things clear for you?
Premier of Saskatchewan
Clearly, the one step that has been taken is I think the recognition now that there is provincial ownership of resources. That's clearly been recognized. It has been recognized that 100% of those resource revenues, at least by option, should not be included. The most practical and tangible move forward is simply to eliminate this concept of a cap.
There is another alternative, which is to replicate, in Saskatchewan's case, something akin to the accord that has been signed with the Atlantic provinces of Newfoundland and Labrador and Nova Scotia.
We have always advocated first the fundamental change to the principle of equalization that recognizes that these resources are the property of the people of Saskatchewan or the property of the people of whichever province or territory, and that they are non-renewable resources because by definition they can only be extracted and their benefit can only be achieved on one occasion. If the people of Saskatchewan are not permitted to use these one-time resources to build infrastructure, to build for the educational needs, to build that capacity for a long-term prosperous economy now, that opportunity will never arise again.
I note that some many decades ago, the people of Alberta were afforded this opportunity through an arrangement with the then national government, to use those resources to build what has resulted in likely the strongest economy in North America. We have celebrated and rejoiced that Atlantic Canada, Newfoundland and Labrador and Nova Scotia, have been provided for their offshore resources an accord. It is better, we say, to get the principle right.
So if we've moved halfway in the recognition that 100% of resource revenue should be excluded, why then turn around and create exactly the same circumstance that existed before that recognition so that the people of Saskatchewan, unique in Canada, are left to export the value of their resources to other Canadians instead of allowing this province to do what others are being permitted to do?
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Thank you for your answer. I have many questions for you, but out of respect for the other witnesses...
Mr. Weir, in your presentation, you seem to be saying that provinces in charge of various social issues would not be able to cope with them adequately if the federal government did not impose standards.
Is this what you meant to say in your presentation?
Economist, Canadian Labour Congress
No, I do not think that you got my meaning.
I can answer your question more accurately in English.
Certainly I recognize that social programs, health care, and education are areas of provincial jurisdiction. However, the fiscal imbalance came about because labour and capital are far more mobile between provinces than they are between countries. As a result of that, there's much more tax competition between provincial governments than what the federal government faces, and provincial governments aren't raising enough tax revenue to finance public services appropriately.
So if the federal government transfers money to provincial governments in an effort to solve the fiscal imbalance, and the provincial governments just cut their taxes, then we won't have addressed the problem, which ultimately was a lack of funding for provincial public services. I'm not calling on the federal government to micromanage all of these provincial programs; I'm just saying the federal government needs to have some minimum standards in place to ensure that these increased transfers are actually devoted to public services. For example, I think it's important to enforce the key principles of the Canada Health Act. I don't see that as a major infringement on provincial jurisdiction. In fact, I think it's very much in line with what the population of Quebec wants from its provincial government.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Let us take child care services as an example. Quebec has developed a child care system which, I think, is envied by Canadians everywhere. Quebec did this within its provincial mandate, because child care is a provincial matter. There was no need for the federal government to set any standards.
Is it not up to each province to decide what its priorities are? People can have different priorities.
Conservative
The Chair Conservative Brian Pallister
Mr. Weir, you have time for only a brief response, unfortunately.
Economist, Canadian Labour Congress
Yes, I applaud Quebec's excellent day care system, and I'd like to see the federal government implement standards that would cause other provincial governments to pursue that excellent model.
Conservative
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Thank you, Mr. Chairman.
Mr. Premier, welcome to Ottawa.
Ladies and gentlemen, thank you for your presentations here today.
One of the statements you made at the opening, Mr. Premier, was that this is a commitment to the people of Saskatchewan, and I couldn't agree with you more. Certainly budgets at the federal and provincial levels serve the people of your electoral districts and your province or country.
You've also been advising my caucus colleagues to vote against the budget, simply because of some changes you say need to be made. I'm here to tell you I would never do that, sir. The people of Saskatchewan, from my understanding and the letters I've received and the meetings I've attended, are very happy with this budget. On top of the $878 million we're talking about, which is new money for the province of Saskatchewan, there's $756 million in health care funding. There's $342 million of secondary education, the social transfers. We haven't seen that level of money flowing to the province of Saskatchewan for years. There's also a 6% annual increase built into those.
The member for Wascana talked about the $100 billion booked to flow. Did you ever see any of that money, sir?
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Well, it's a start. Did you ever see any of that $100 billion he claims was booked to flow?
Premier of Saskatchewan
The first year of it is what we saw.
Since you've opened the floor to discussing the $878 million, let us have the committee understand with precision what this $878 million is.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
I think everybody is aware of what the $878 million is--
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
My next question to you would be, is there more than one way to deliver $800 million?
Premier of Saskatchewan
Mr. Ritz, if you'll permit me to discuss the issue of the $878 million that you just raised, I would appreciate the committee to understand that 85% of that $878 million is one-time money, one-time funding, which is a far cry from an annualized $800 million.
The members are shaking their heads; I'd like them to show me the documentation that will tell this committee--
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
It's an annual budget, sir. There will be another one next year.
Premier of Saskatchewan
It is not an annual budget.
About 60% of that money does not flow to the people of Saskatchewan through their provincial government, and 20% of that money goes to a corporate entity for a project that isn't even approved.
I will document, then, in precision. We start with $878 million; of that, $250 million is through agriculture, which is Saskatchewan's share on a national basis. Surely we're not calling that new money. That's a share based on a 60-40 split that we can have another discussion about.
There's $180 million to the Iogen project, which is not yet approved.
There is $87 million to income tax reductions. Fair enough: our people benefit--but so does every other Canadian citizen.
There is $10 million to a national program that we appreciate in our province, the Canadian Police Research Centre, and $8 million to the people of Saskatchewan for the patient wait-time guarantee, which I expect is available to every other Canadian.