Madam Speaker, it gives me a great deal of pleasure to say a few words in this debate. Let me congratulate you on your elevation to the chair. I will be sharing my time with the member for Fundy—Royal.
In the throne speech debate today, let me touch briefly, if I may, on three very important points as they affect the province of Newfoundland and Labrador.
During the last parliament I spoke repeatedly about the devastating effect that cuts to the federal transfers for health and post-secondary education were having on the smaller provinces in Canada, but especially on the province of Newfoundland and Labrador. For many Canadians, those transfers have been restored to early nineties levels with the new agreement on health and post secondary education. However, in the case of Newfoundland and Labrador, we will not return to nineties levels until the year 2006. That is having a very devastating effect on poorer provinces. It is having a devastating effect on the people of Newfoundland and Labrador. That is one issue that I hope the regional minister for Newfoundland will be able to address. He is a very good friend of the Minister of Finance and the Prime Minister, so I know that he will be quite happy to deal with this particular item when it comes across his desk.
As a matter of fact, when he was premier of Newfoundland just a short time ago, he described the agreement that the federal government signed with the provinces as being no bonanza for the people of Newfoundland and Labrador. He pointed out that the funding formula was done on a per capita basis. When the population is declining like it is in Newfoundland and Labrador and when health care is funded on a per capita basis, that is bound to have a detrimental affect.
The old EPF funding formula in place prior to the CHST always had in place an equalization component that could be used for areas with small populations. The equalization formula in the old EPF scheme of things also took into account geographic differences. For instance, the province of Newfoundland and Labrador has hundreds of smaller communities scattered along thousands of miles of coastline. The old EPF formula ensured that an equalization component was built in so that it could take into account the geographic differences we have. We do not see that today in the CHST.
A second item I want to have a word on is an important item, an environmental problem currently being experienced in my riding in St. John's. It has to do with the cleanup of St. John's Harbour. This is an issue that is not only a very important environmental issue but an issue that came to the fore in the recent election campaign and I would be remiss if I did not say a few words about it. It is a matter I raised in the House on a number of different occasions in the last parliament and is an issue that I raised on a number of different occasions in the media. Of course in November it became an election issue.
I was pleased to hear the regional minister for the province of Newfoundland and Labrador, who is the present Minister of Industry, make the statement that he would be working very hard with the Prime Minister and with the Minister of Finance, who is a very close friend of the regional minister, to secure funding for the St. John's Harbour cleanup.
It is only a $100 million project, and the province has committed its $30 million. The city of St. John's, Mount Pearl, and the surrounding area, Paradise, have committed their $30 million. The only holdout in this whole funding problem is the federal government. I note that the federal government made available, just before the election campaign, $1.5 billion for the cleanup of Toronto Harbour.
None of us would begrudge Toronto its right to have its harbour beautified and what have you, but I would ask for similar treatment to be given to the province of Newfoundland and Labrador in the area of harbour cleanup, a very important environmental issue that needs a measly $30 million.
I note that the federal government had no problem coming up with $2 billion a couple of days ago for Bombardier. Again, we do not begrudge Quebec or any other province their windfalls, but surely an environmental problem of this proportion needs to be looked at very closely by the federal government. Hopefully the regional minister can get together with his good friend, the Minister of Finance, and have this problem looked after immediately.
The other subject that is very close to the people of Newfoundland and Labrador is the current equalization formula that we happen to be under. The Canadian equalization system is a really good system. It will keep us from drowning but it falls far short of helping us swim by ourselves. This is where the equalization formula, in the way it is drafted right now, fails the poorer provinces that have to be recipients of it.
Let me elaborate a little. Under the current equalization formula, new resource revenues raised by the provincial treasury are clawed back dollar for dollar by the federal government. That is not a very good way of doing business. A province is trying to develop resources, but for every dollar in resource revenue taken in by the province the federal government comes along and takes a dollar back. There are not too many incentives built into that kind of system for any province that wants to develop its resources in the manner it wishes.
I am very encouraged by the fact that today we have the premier of Nova Scotia, Mr. Hamm, in town to talk about the current equalization formula. Hopefully he will put forth a series of recommendations to help rejig or retool the formula we have at present.
In Newfoundland we had the Hibernia project, developed just recently. We were able to do a deal with the federal government in which the federal government said it would take back 70 cents instead of a dollar, thus allowing the province to develop the resource base a little more and to keep some of the revenues associated with that. On top of that, the federal government came up with a $1 billion loan guarantee and a $1.5 billion grant. In spite of that, it was able to say that we needed some kind of a better deal as it pertained to the Hibernia development. Of course that was done by the federal PC government.
We have had virtually no recognition from the federal government since that time that the equalization formula should be retooled and rejigged to help provinces like Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, Quebec, Saskatchewan and Manitoba. Only at the point when we have a new deal on equalization for Newfoundland and Labrador will we be able to rise above a beggar.