Pardon me? Did the hon. member say double dipping? No, I am not one of the individuals who double dip. I can say to the member that I am not one of them.
I served for about 14 years as a member of the Newfoundland House of Assembly. In that period of time I served during the administration of the PCs and of the Liberals. I remember both those governments making the case year after year after year to the federal government for a change in the way the equalization formula was written so that the province could have an opportunity to catch up to other provinces in Canada. I believe that was brought into focus by the massive Hibernia oil development on the Grand Banks of Newfoundland. When the particular resource was discovered back in 1979 Newfoundland held a promise of jobs and revenues for its beleaguered provincial economy.
In the early eighties oil prices were high and the prospect of annual oil revenues were not out of the realm of reaching billions of dollars. Given that fact, overcoming the equalization hump was at least a possibility for the province of Newfoundland and Labrador. It would lose probably the first billion but we would keep subsequent billions and millions of dollars as the case may be.
It proved impossible for the government of the day to negotiate an offshore oil deal with the Trudeau administration when oil prices were very high. An agreement had to be held up until the PC government came in power under Brian Mulroney and there was a decent offshore contract negotiated with his government. By that time oil prices had fallen dramatically. There was not any possibility of a multibillion dollar oil revenue, so we could see all oil revenues simply going to replace equalization payments.
At about that time the government of the day negotiated with the federal government a change in equalization entitlements as they applied to the Hibernia resource development. Instead of having the dollar for dollar clawback it was negotiated that the federal government would only take 70 cents. Some recognition was given to the fact that oil prices were low at the time and Newfoundland would not be receiving all that much revenue from resource development in that project. That could be easily done again for other developments in Atlantic Canada like Sable Island, Voisey's Bay and other developments in general.
We are quite pleased to have an equalization program that keeps us from economic disaster, but we are not at all pleased it is the formula that keeps the receiving province from getting ahead. How can we ever catch up if every new dollar we earn is subtracted from our equalization payments? We have to catch up.
For as long as I have been in public life in Newfoundland the unemployment rate has been double the national rate. During that same time the federal government has cut transfers to the provinces by 35%. Not only do we have to use our equalization payments to help the province get ahead. We also have to use them to make up for the fact that the federal government has cut transfers to the provinces by 35%.
When that was done, in Newfoundland's case thousands of provincial public servants were laid off. The public services are now under a great deal of strain especially in rural Newfoundland. The federal government has cut the federal public service in the province by a full 30% as compared with 15% nationally. It is hard to believe but the province with double the national unemployment rate was saddled with double the rate of federal job cuts.
Because the public service in general plays a larger than usual role in Newfoundland's economy, the cumulative effect of these cuts has been very devastating upon the province and probably more devastating on Newfoundland than it has been on other provinces in Canada.
We need a new deal. Atlantic Canada generally needs a new deal in Confederation. If we are to move out of park and into high gear, the federal government needs to recognize we are a have not province which needs a greater say over the resource revenues that come into our province. We need revenues that would more than merely replace equalization. We need revenues to augment our economic situation, to catch up and to make progress. That will never happen unless the federal government is willing to recognize the plight of Atlantic Canadians generally.
To sum up, we need economic development and jobs. We need to maximize the impact of any resource development on our economy and the provincial treasury. The federal government has not helped today by invoking closure on the bill.