Mr. Speaker, I can easily pick up on the comments made by the previous member because there is much on which we agree.
I could not agree more with the member's remarks when he talked about federalism and what Canada was all about. It is about sharing; sharing our wealth and sharing the blessings we have.
From time to time many provinces do not as well as others. Some provinces that are doing very well today were not doing well in the past. One province I will point to is Alberta. Until Alberta struck oil it was doing just about as poorly as Atlantic Canada.
I want to focus so that the listening audience will have a sense of what we are talking about. We are talking about the equalization formula and the government putting a cap on it. Equalization is an unconditional transfer of payment from the federal government to eligible provinces that is determined by a formula which takes into account numerous economic, demographic and fiscal indicators.
Mr. Speaker, before I go any further, I will be sharing my time with the member for St. John's West.
The equalization formula was designed to make up for a province's inability to raise sufficient revenues from its own economy. Equalization payments are made so provinces have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation. That is quite important to understand.
Obviously the poorer provinces, to maintain health care, education and all the other services that governments deliver, simply cannot do that on their own. It is quite noticeable in my home province where equalization payments are the single largest source of revenue for the province of New Brunswick. I think I am being accurate when I say that also applies to Prince Edward Island, Newfoundland and Nova Scotia.
When the federal government arbitrarily, without consultation, takes off the cap or caps the payments, it creates a handicap for those provinces. Basically the government is taking away the very spirit of the Constitution Act of 1982, when it is guaranteed in our constitution that those payments will be there. When those payments are capped, the cap results in a handicap for us in the poorer provinces.