Manitoba and Saskatchewan, as the member for Pictou—Antigonish—Guysborough just mentioned to me, are also recipients. In fact I will refer to my notes so this will be on the record. Seven provinces are currently recipients of equalization payments, namely: New Brunswick, Nova Scotia, Newfoundland, Prince Edward Island, Quebec, Manitoba and Saskatchewan.
Those payments are made by the federal government from federal revenue sources to which all taxpayers contribute. It is not coming out of one pot of money. It is coming out of general revenues.
Before my colleague from Newfoundland gets on his feet to drive home what I think is a more regional message—I may be mistaken on that, but I think it is—I do want to go through the history of equalization in the country.
It is a long established practice in the country to share the wealth, so to speak. I refer to an article written by Kenneth Norrie, Richard Simeon and Mark Krasnick entitled “Federalism and the Economic Union in Canada”. It is a summary of major developments with respect to equalization.
For the record, this practice began in 1867, at the very birth of our country, in the BNA Act, with what were then called the BNA Act statutory subsidies, payments made to provinces in return for surrendering indirect taxes to Ottawa. There was a formula already established, then, for having given up direct taxation. In 1940 that was renewed with what they called then the national adjustments grants, which were recommended by the Rowell-Sirois report. These grants were paid on the basis of fiscal need.
In 1957 there was another look at equalization. The first formal equalization plan was established in 1957. It was part of the 1957-62 fiscal arrangements. The federal government at that time agreed to bring per capita yields from three standard taxes up to the average yield in the two wealthiest provinces, hence bringing us up to a higher level based on the prosperity of some of the other provinces that happened to be doing better.
In 1958 there was another look at it, with increased equalization for personal income tax. Again it was a trade-off. The provincial share of personal income taxes paid to the provinces increased from 10% to 13%. This entered into the equalization formula.
Between 1958 and 1961 there was another look at it. The government came up with the Atlantic Provinces Adjustment Grants and Newfoundland Additional Grants Act, an act of parliament. Additional unconditional grants at that time to the Atlantic provinces were rationalized on the basis of the provinces' low fiscal capacity, in other words, not as much strength in their economies.
In 1962 we revisited again as a nation what was then called the 1962-67 fiscal arrangements agreement. Again the personal income tax share rose up to 16% in accordance with the tax arrangements and there was the introduction of 50% of the three year average of provincial revenues and taxes from natural resources. The equalization standard was again reduced to the national average level.
From 1962 to 1967 another look was taken at it. The provinces acquired an increased share of personal income tax. In 1964-65 there were some changes to the natural resources act. Then we move on to our centennial year and the federal government introduced the representative tax system of equalization. In 1972 the same thing occurred and that program was extended. An addition of three new tax sources brought the total level to 19 tax sources at the time. Revenues from these three tax sources, racetrack revenues, medical premiums and hospital premiums, were previously equalized under miscellaneous revenues. There were some changes there.
In 1973-74 school purpose taxes were included. In 1974-75 there was energy revenue modification. In 1977 the equalization component of the Fiscal Arrangements Act was passed by parliament. In 1981 Bill C-24 had two provisions: withdrawal of the sale of crown leases category from the program and a personal income over-ride with no province eligible for equalization if its per capita personal income exceeded the national average level in the current preceding two years.
As we can see, various Liberal and Conservative governments were taking steps all along the way and provincial governments were doing the same thing in recognition of equalization and how important it was for the stability of the country.
In 1982 a new tax source was added. In the 1982-87 fiscal arrangements there was the new representative five province standard equalization program.
I have one minute left and will conclude by saying that April 17, 1982 is a date every Canadian will remember. That was the date of the new Constitution Act. The new Constitution Act of 1982 was struck, signed onto by the provinces and the prime minister at the time. There was a provision in the act ensuring that equalization was enshrined in Canada's new constitution.
Canada has a long and good history of sharing the wealth in our country. I think the present government's position and attitude are very meanspirited. I look forward to hearing the comments of the member for St. John's West, who will carry on.