House of Commons Hansard #22 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was province.

Topics

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10:40 a.m.

Conservative

Peter MacKay Conservative Central Nova, NS

Madam Speaker, I am very honoured as a Nova Scotian and as a member of the Conservative Party to take part in what I believe is a critically important debate for the future of our province, for the future of Atlantic Canada and in fact for the best economic future of the country, because it is in everyone's interest, the interest of our entire country, to have the improvements to the economies of Atlantic Canada that we see happening elsewhere in this country.

I want to begin my remarks by congratulating the Leader of the Opposition for the passionate and poignant case he has made before Canadians today in defence of Atlantic Canada. As he has done on numerous occasions since the House has resumed, whether it be on BSE or on trade issues, issues that affect the lives of Canadians, he has put forward in a very articulate and straightforward way what should happen. That is the type of national leadership we need in this country and I applaud his actions on this file.

There has been a lot of discussion, even early in this debate, about the numbers and how equalization factors into the formula when it comes to the provision of the royalties scheme and the flow that we would see in Atlantic Canada from our own natural resources, mainly oil and gas.

A number of accords and agreements are in place already, signed by previous governments, as alluded to by the Leader of the Opposition, going back to the 1980s when there was a recognition by a Liberal government at that time and subsequently by Brian Mulroney's government that Atlantic Canada and Nova Scotia and Newfoundland in particular were entitled to the same treatment and the same benefits that they would receive from their natural resources as other provinces were, such as Alberta.

There was also a recognition that when an industry is started there is a lag time before those benefits actually begin, as in the province of Alberta, which was permitted to continue to receive equalization. And equalization is just that: it is meant to equalize opportunities, both financial and otherwise, for citizens of that region.

Alberta was permitted to have that industry kick start, to have that exploration that has to take place, the difference being--and I want to highlight this issue--that underground technology, the ability to extract oil from under the ground, is not nearly as expensive as it is to go down hundreds of fathoms in the ocean and extract it from the ocean floor. So there is a parallel here, an important issue, and that is the ability for Nova Scotia and Newfoundland to have that exploration and continue to receive the support of a revenue stream that will allow them to truly develop in the area of offshore oil and gas technology. It costs up to $100 million in some cases to drill a single well on the ocean floor. Equalization is about giving our region the ability to reach our potential and our future growth.

What we have in this instance is the Prime Minister making a desperate attempt to ameliorate things with voters in that region of the country by promising something that he now is reneging on, by promising something that was meant to simply buy votes from Atlantic Canadians. Now, in the stark light of day, faced with the reality that he has to keep his promise, he is pulling back. He is putting qualifications in place. He is indicating to Atlantic Canada, “On second thought, I don't think we can do just that”.

That is not good enough. That is not the type of deal that can be struck when it comes to the important matter of Atlantic Canada's future.

We in the Conservative Party have been putting forward this issue since the House resumed for this simple reason: we understand fully that Atlantic Canada wants to be a full participant in Confederation. We no longer want to have the status of have not. We no longer want to carry the stigma that our people are not able to attain the same level of success that people in this country in other regions have attained.

This issue is of historic proportions for Atlantic Canada. In the past, we have seen attempts made to put forward what I would describe as “election amnesia”. That is what the government seems to be suffering from today. It is not cognizant of the fact that it is on the record. It has been recorded as to what it put forward to Atlantic Canada. And the only number that counts--not the percentages, not the equalization formula, not the type of rhetoric we are hearing already from the government side--is 100%. One hundred per cent of our revenue.

The Minister of Fisheries, who is from the province of Nova Scotia, said back in September of this year:

The idea of the offshore accord...that we're looking forward to is one that allows each of the provinces to keep 100 per cent of their offshore oil and gas royalties.

This echoes the same words of the Prime Minister.

As well, he went on to say:

I've heard talk of working toward a deal in Newfoundland by the end of the summer, and that sounds like a good time frame for me...

That came from the federal minister of fisheries, who is from Nova Scotia.

Summer has come and gone and now we are faced with a situation where we are seeing the same type of provision, the clawback which is currently in place and takes 81¢ of every dollar generated from our offshore. In the Province of Newfoundland and Labrador, it is more. This results in billions of dollars coming to Ottawa that potentially would go into those regions, coming to Ottawa as opposed to the region that would build for the future and build the economic prosperity of that region. That is the dollar amount which will affect our provinces.

This type of folly, an election fortune that was so important to the Prime Minister, now appears to be falling away because people are realizing that without that true commitment, without the follow-through from the Prime Minister, we will not be able to enjoy that potential.

Therefore, Premier John Hamm of Nova Scotia and Premier Williams are very, very serious about holding the Prime Minister to his very, very serious commitment. That is what we in the official opposition want to see as well. These premiers understand, as does the leader of the opposition, that this issue is principally an issue of people. It would allow people to stay in the region in which they currently live to enjoy the future spinoffs that would come from this industry.

I want to refer to a study put forward by the Canada-Nova Scotia Offshore Petroleum Resources Accord. This study speaks very much to the impact that this would have on a province like Nova Scotia. In 2002, the Greater Halifax Partnership released this study by the Conference Board of Canada on the economic impact this would have on the province. The study predicts a steady rise of employment in Nova Scotia, with the creation of 57,000 additional jobs by the year 2020.

The study goes on to see the growth in the construction, manufacturing, utilities and services sectors. As for rural Nova Scotia, we know there is an increasing divide between rural and urban Canada, but the impact of this would be in the construction and manufacturing sectors while growth in the retail and services sector would be almost as pronounced as we see in our capital, Halifax. The study predicts a gain of $1 billion by 2020 in the construction industry alone.

That is the type of impact this would have. It would allow young people, our best natural resource, to stay at home, our young, educated, motivated Canadians who now have to leave their homes and go elsewhere, sadly, and sometimes out of Canada, to find employment, to find their future. For example, the Leader of the Opposition's roots go back to Atlantic Canada; his family, like many others, left that region to seek a future elsewhere. What Atlantic Canadians want is the ability to stay at home, to contribute to the growth of their own region, which they know and love, with the passion that they feel for their home, for their ground where they grew up.

That is very much tied to the ability of Nova Scotia and Newfoundland and Labrador and in fact all the provinces to benefit from their own natural resource, a non-renewable natural resource as has been pointed out. There is a finite time in which we can truly enjoy the benefits of this. To suggest that we should accept anything less, that we should now accept this qualified clawback of the Prime Minister's commitment, is ludicrous.

Premiers Williams and Hamm will continue to insist that the Prime Minister do what is right, what is fair, what is equitable and what is in the interests of all Canadians: to keep his word and allow the provinces of Nova and Newfoundland and Labrador to attain the same level of economic future and the same type of prosperity that exist elsewhere in this great country of ours.

We will continue on behalf of the official opposition to make that case passionately, with a great deal of support coming from all Canadians. I think that is a concept implicit in this debate. It is one of fairness. It is one that all Canadians respect and understand.

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10:50 a.m.

Avalon Newfoundland & Labrador

Liberal

R. John Efford LiberalMinister of Natural Resources

Madam Speaker, in 1985 I was elected for the first time and was on the opposition side from 1985-89, but two of my colleagues opposite were on the government side. I never ever asked a question or made a comment in the House of Assembly in Newfoundland and Labrador that I did not know the answer to. So I am going to ask a question of the hon. member opposite who just gave his speech about the offshore accord.

Could the member tell me, the people of Canada and the people of Newfoundland what the four components are that make up the offer we have on the table for Newfoundland and Nova Scotia?

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10:50 a.m.

Conservative

Peter MacKay Conservative Central Nova, NS

Madam Speaker, I am not sure where the hon. minister is going with this issue. The only number that matters, the only component of the offer from the Prime Minister, is 100%, and 100% means 100%, 100% of the time. That is it.

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10:55 a.m.

Humber—St. Barbe—Baie Verte Newfoundland & Labrador

Liberal

Gerry Byrne LiberalParliamentary Secretary to the Minister of Intergovernmental Affairs

Madam Speaker, I want to say how all members of the House reflect that this is an extremely serious issue. I, for one, and many, many others are looking to have it resolved. I will approach this from a slightly different point of view. I will take the seriousness and the discussion that has occurred not only over 10 days but over several months and several years since 1985. I will try to raise this to a different level.

A context for a resolution of this must be found. One of the things we have discovered in the last little while is that the devil is sometimes in the details and the angel is in the details as well. In order to provide clarity to all of this, because I think this is why we are in the situation we are in today, the issue here is that the language must be clear. I would simply ask if we can provide some clarity to the language. For the hon. members, the mover, the Leader of the Opposition, the leader of the potential government in waiting, which all leaders of the official opposition are, could we get some clarification that is consistent with what the premier is asking?

I will say this. The issue here is not 100% of provincial offshore oil and gas revenues. Equalization is not oil and gas revenue. It is a public transfer provided through the people of Canada, and of course it is central to the issue that is important to the premier, and the offset formula and the other revenues that flow from it. What is unclear to me is that we are taking a general issue and we are not providing a technical framework to actually enable the ideal to be translated into a deal that fulfills the basic principles.

Would the Leader of the Opposition and the deputy leader actually entertain an amendment--because this could only be done by the mover--to first off provide a full and clear synopsis of the technical parameters which the Conservative Party of Canada would be able to offer the people of Newfoundland and Labrador and Nova Scotia? Furthermore, in the spirit that Premier Danny Williams has shown, would they consider just simply sticking to the issue at hand? The premier has said that he wants to entertain discussions. Can we just stick to the technical issues at hand?

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10:55 a.m.

Conservative

Peter MacKay Conservative Central Nova, NS

Madam Speaker, clearly the Premier of Newfoundland and Labrador provided this technical detail in his discussions with the Prime Minister. Those discussions took place at that high level four months ago. The problem now is that the Prime Minister is backing away from that commitment.

This debate is not about providing further clarity. This is about shedding light on what the Prime Minister has already committed to. This is about ensuring that the Prime Minister keeps that commitment.

We, very clearly, in our words and actions, support the region and the premiers who are simply looking for the Prime Minister to now deliver on that commitment. This would allow us to get away from scenarios that we see in a province such as Nova Scotia where 43% of the revenues generated in that province go to a single issue, health care.

How are we supposed to deal with infrastructure, education and other important matters if we cannot generate some revenue independent of this sad scenario where we find ourselves now able to generate revenue but have 81¢ on every dollar generated in that province clawed back by the federal government?

It is a clear issue. The technical detail exists. The Prime Minister promised that 100% of those royalties would go to the province of Nova Scotia and to the province Newfoundland and Labrador. The simple solution is for the Prime Minister to keep his word.

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10:55 a.m.

Avalon Newfoundland & Labrador

Liberal

R. John Efford LiberalMinister of Natural Resources

Madam Speaker, I will use the time allotted to me this morning to speak to the people of Newfoundland and Labrador, to stay away from the politics, to stay away--

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10:55 a.m.

Conservative

James Lunney Conservative Nanaimo—Alberni, BC

Stay away from the politics.

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10:55 a.m.

Liberal

R. John Efford Liberal Avalon, NL

Madam Speaker, I never spoke once during the hon. member's speech, nor did I speak during the deputy leader's speech. I would ask for the same respect and the same courtesy.

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11 a.m.

The Acting Speaker (Hon. Jean Augustine)

Order, please. The Minister of Natural Resources.

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11 a.m.

Liberal

R. John Efford Liberal Avalon, NL

When the hon. opposition leader stood up he tried to promote his feelings toward Newfoundland and Labrador in a passionate way. I think the deputy opposition leader said the same thing.

Let me go back to the June election of this past year and before that when the opposition leader spoke very clearly about the defeatist attitude of Newfoundlanders and Labradorians. Now he is saying that the Prime Minister of the country is not keeping his word.

When I asked the deputy opposition leader to explain the four components of the proposed deal that was on the table for Newfoundland and Nova Scotia, he could not explain them. That is what I find most disturbing about this issue. The proposed deal is on the table. If people disagree with it, then they should know exactly what they disagree with. It is very simple.

Let me explain for members opposite what is on the table. First, Newfoundland and Labrador is receiving 100% of the provincial share of revenues, that includes royalties, corporate tax, personal tax and all other fees having to do with the offshore oil and gas industry. Those things have been there since day one.

Now we add to those revenues, the equalization as well as the offset mechanism clause that was put in the Atlantic accord in 1997, which is that 30% is exempt from equalization forever. That 30% is then added to the provincial share of the royalties and the revenues, which is 47%, and that is added to the equalization.

In the Atlantic accord that was signed in 1987 there was also the 70¢ of every dollar that we have to talk about. From 1999 until 2003 only 7% of that 70¢ was clawed back. In other words, we were receiving 93% up until the end of 2003. In 2004 we did it on a declining formula, where from 2004 to 2011 it will go down to zero. In other words, we will be losing 100% of that 70¢ if the Atlantic accord is not reopened.

The Atlantic accord is under my responsibility as Minister of Natural Resources. The Prime Minister, through the Minister of Finance, has committed to reopen the Atlantic accord which has seven years of life left. It is supposed to terminate in 2011 at which time another accord would be negotiated for the future. However, even though the accord has another seven years left, we have reopened it and added 100% of the provincial share of the royalties and revenues, with equalization of 30% on top of that. Now it is 100% of that 70¢ on top of that. We must clearly understand.

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11 a.m.

Conservative

Norman Doyle Conservative St. John's North, NL

Is there a clawback?

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11 a.m.

Liberal

R. John Efford Liberal Avalon, NL

No, there is no clawback. Give me a chance to explain.

We have 100% of the provincial share of the revenues. We have the equalization that we are now receiving. We have the 30% in the offset mechanism that is there and is enshrined. Now we have 100% of the 70¢. In other words, all of those combined is 100%.

That is there for eight years, keeping in mind there are seven years left in the offset mechanism in the Atlantic accord. There is one year of grace to renegotiate a deal for the future, if that is necessary. I will get to that in a second. Those four components should and could bring Newfoundland and Labrador up to the Ontario standard. That is a notch above the standard of five provinces, which sets the equalization formula.

I know all Newfoundlanders and Labradorians on both sides of the House and everyone who supports this deal for Newfoundland hope we continue to get more oil. I do not believe the oil and gas will end. I think there are a lot more opportunities out there. I will be an optimist on this, as I always have been. We have a long, bright future ahead of us.

Let us suppose that we strike two or three more wells and our revenues grow. We will still keep 100% of the revenues regardless, the same as Alberta and Ontario, and the revenues will continue to grow. As we go above the threshold set by the equalization formula across Canada, the only thing that will start to depreciate is the equalization payments. The revenues will keep growing as long as revenues continue to go to Newfoundland and Labrador.

If at some point in time the revenues climb up to the same level as Ontario, the five province formula, this will not be worth discussing because we will be self-sufficient and we will not need to receive equalization payments. The Newfoundland minister of finance and I talked about that.

Speaking on behalf of every Newfoundlander and Labradorian, we all have pride. We do not want to be a receiving province. We want to contribute to Canada's economy which is what the equalization formula is based on, to bring all provinces up to a reasonable standard of parity across this country. We have dreamed about that all our lives.

Members say there is a cap. The only cap is on equalization and that will only be capped when revenues start to climb. Let me say this very clearly. Even when the revenues start climbing, that 30% and the 70¢ on the dollar in the offshore mechanism will still stay there for eight years. There will be no decline in that for the next eight years even though our revenues would continue to climb.

I am not being critical but I do believe there is a real misunderstanding of what is on the table, which is why I believe that we need to sit down and go through this again. It is very clear that Newfoundland and Labrador will not lose on this deal. What all people want to receive is 100% of their revenues. We are receiving 100% of the revenues and we want continue to receive 100% of the revenues. We also want to continue to receive equalization as long as it is within the standard set down by the country, a standard which makes this country one of the greatest places in the world to live. No one part of Canada should be better off than another part.

As a citizen of Newfoundland and Labrador, I feel very strongly that at some point in time our revenues will climb above the standard and we will become like Ontario and Alberta, proud people contributing to the economy of this great country.

What is on the table is exactly what was committed to by the Prime Minister. I would like to make a couple of points about the letters the premier sent to the Prime Minister.

The one thing the Premier of Newfoundland and Labrador and the Prime Minister agreed to after they had talked on June 5 was to go forward with the deal. There is no argument about that. However, what the Premier of Newfoundland and Labrador said very clearly, and it is on the record and he will not deny it I am sure, was that he would appoint his minister of finance, not the minister of natural resources, Ed Byrne, a good friend of mine. The Prime Minister said that he would appoint his Minister of Finance. If the deal had been completed in June, why would the leader of the Government of Newfoundland and Labrador and the Prime Minister of the Government of Canada say that the finance ministers need to be at the table? It was because they had the basis for a deal. Did they talk about timelines? Absolutely. I can assure members that the premier talked about timelines to me.

Did the Prime Minister talk about a ceiling on how far we could go? Yes, I believe what the Prime Minister said. Nevertheless, the negotiations between ministers of finance had to be on a day to day or week to week basis, either in person or by phone. Negotiations cannot continue in any other way. Do not tell me that they only spoke once after June and no more until the deal was completed. That is not possible. I spoke to the minister of finance of Newfoundland in Ottawa. I spoke to him by phone on several occasions. I spoke to the premier on several occasions.

Let us go ahead to when the deal was supposed to have been concluded. There is a disagreement. We will not argue about that fact. On the Friday morning, I was briefed by the finance minister on this deal. I believe in it very strongly, otherwise, as a Newfoundland and Labradorian, I would accept it. I am putting my reputation of 20 years on the line, on this deal, because I believe it is the right deal for Newfoundland and Labrador. This is what I understood from that briefing. Our finance minister and the finance minister from Newfoundland and Labrador had concluded their discussions. The Minister of Finance was supposed to go to the Prime Minister with the conclusion of the deal and sign-off. The finance minister of Newfoundland and Labrador was supposed to go back to the premier.

I went home that weekend full of excitement, but not saying a word because it still had to be completed by the two leaders. When I got to Halifax airport, I got the call that the deal had fallen apart. We had agreed not to talk about it on the weekend. On the Monday we would, either by phone or in person, go over what both leaders had said and discuss any problems. That is exactly what happened. Since then, all we have heard is rhetoric. We need to get past that. I will not point fingers at the premier, his minister or anyone else. We will all take full responsibility.

This deal matters to the future of our province. Do all of us want Newfoundland and Labrador to be a have province? Absolutely. We are a very proud people. We are limited to what we can do on our own on the Atlantic coast. We have lost our fisheries. There have been major economic differences and other problems in our province, but now we have a chance. The offshore oil and gas will give us that chance to get there.

Can we break up the equalization formula that has kept the country together and kept all parts of it at a reasonable parity and with a reasonable standard of living? No, we cannot do that. Nobody in their right mind would suggest that we do that. Can Newfoundland and Labrador reach a have province status? Absolutely. This deal will allow it the benefit and the ability to get there.

Let me just reference a deal that was put together back in 1984. I could photocopy this and give it to every member of the House. Jean Chrétien was minister of mines and managed by the Government of Canada. He went to Newfoundland and Labrador and offered almost exactly the same deal in 1984 as is being offered now. I will photocopy it and send it. The government of the day refused it. Then in 1987 that same government signed a deal with another government and accepted 30%. This deal is 100% of the revenues go to Newfoundland and Labrador. That was 20 years ago. Let us add all of the royalties, the revenues and the loss of income since 1984. Let us say it is $200 million a year: $200 million times 20 years is $4 billion.

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11:10 a.m.

Conservative

Peter MacKay Conservative Central Nova, NS

There were no rigs in 1984. They weren't drilling in 1984.

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11:10 a.m.

Liberal

R. John Efford Liberal Avalon, NL

We are talking about royalties and revenues.

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11:10 a.m.

Conservative

Peter MacKay Conservative Central Nova, NS

What revenues were coming from oil and gas in 1984? You don't know what you're talking about.

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11:10 a.m.

Liberal

R. John Efford Liberal Avalon, NL

I will explain it again. In 1984 this deal was on the table. We will be drilling and receiving oil and gas for another hundred years. This will not end in a year. Why did we sign it in 1987 and accept 30%?

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11:10 a.m.

Conservative

Peter MacKay Conservative Central Nova, NS

There was no reduction in 1987. There was no production in 1987. Get a grip. You're having a brain cramp.

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11:10 a.m.

Liberal

R. John Efford Liberal Avalon, NL

The hon. member does not know what he is talking about. With all due respect, the deal was signed in 1987 by the Hon. John Crosbie, the Right Hon. Brian Mulroney and the Premier of Newfoundland, Brian Peckford. My colleagues from the opposite side of the House were there, and I was there when we celebrated in Newfoundland.

Money did not start flowing until 1999, when all the expenses were recovered. I know what I am talking about, unlike the hon. member opposite. The offset clause in the Atlantic accord expires in 2011. That is the reason we have negotiated this, so Newfoundland and Labrador can become a have province, contributing to the economy of Canada and enjoying 100% of its revenues, like Alberta and Ontario.

I am proud to say, speaking on behalf of Newfoundlanders and Labradorians, that is where they want to go.

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11:15 a.m.

Conservative

Loyola Hearn Conservative St. John's South, NL

Madam Speaker, I would say to the people of Canada, particularly of Newfoundland and Labrador, that the explanation we have just heard is about as clear as drilling mud.

We can understand full well why there is not a deal. The minister who just spoke has no idea what this is all about. He himself just now admitted that he was briefed last Friday. We know that to be true. We know that the Prime Minister had the Minister of Finance handle the deal. The Newfoundland minister of finance also handled the deal.

The Minister of Natural Resources was briefed last week. He went to the province to sell a deal that for the first time, since negotiations started, was put in writing. He referred to the Government of Newfoundland turning down the deal in 1984. Why? Because when the minister at that time, Mr. Chrétien, made the offer, the minister of finance, Mr. Lalonde, and Prime Minister Trudeau would not put it in writing. Does that have a familiar ring? Yes, it does.

Mr. Williams said quite clearly that the agreement which he thought he had negotiated was not in writing. He had absolutely nothing from the government in writing until the Minister of Finance gave the minister a copy of a deal to take to the province and sell it. The premier says that the agreement he thought he had reached did not include a cap or a reference to a fiscal capacity. It did not include any linkage to the fiscal capacity of other provinces. It did not include a timeframe. In fact it specifically excluded it.

However, the deal the Minister of Natural Resources was sent to the province to sell included all of the above.

The minister went to Newfoundland and Labrador and said, “Here is the deal. Do you want it, Mr. Williams? Do you want it Mr. Sullivan? Take it or leave it. There aren't going to be any changes”. Does he still stand to that position?

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11:15 a.m.

Liberal

R. John Efford Liberal Avalon, NL

Madam Speaker, let us go back to when I was briefed. It was not last Friday. I was briefed when the negotiations finished between the minister of finance of Newfoundland and the Minister of Finance for Canada, which was on a Thursday. I was called in on Friday morning and given the final briefing on this deal. I went back to Newfoundland and Labrador not to sell the deal. We were not supposed to talk about it because the minister of finance of Newfoundland was supposed to talk to his premier. The Minister of Finance for Canada was supposed to talk to the Prime Minister. Then they would communicate some time over the weekend, and let us assume it was Monday. I said that very clearly.

I also said that I was not to go to Newfoundland and talk about the deal in any manner whatsoever. When I arrived at the Halifax airport, I received calls from my office that the finance minister for Newfoundland was on the news and that the deal had all fallen apart.

Word was given not to discuss it, and that is not the case right now. The issue now is what we should be do on both sides of the House. If I were making a constructive argument on that side of the House, I would be saying to the Premier of Newfoundland and Labrador to get back down to discussions. Let us see if there is some way we can work out a deal that will satisfy the people of Newfoundland and Labrador so they can be the maximum beneficiaries, as they should be.

I agree with all members of the House, all the people of Newfoundland and Labrador, that we should and will fulfill the Prime Minister's commitment by giving Newfoundlanders and Labradorians 100%.

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11:20 a.m.

Conservative

Norman Doyle Conservative St. John's North, NL

Madam Speaker, I am absolutely astounded to hear the Minister of Natural Resources stand in this place today and say that the Premier of Newfoundland and Labrador and the minister of finance for the province of Newfoundland and Labrador really do not understand the deal that the Prime Minister has put before him.

I spent a few years in the house of assembly with the hon. member and he engaged in the same old bafflegab when he was trying to sidestep an issue or when he was trying to deceive the people of Newfoundland and Labrador. This is what he is trying to do today.

The Prime Minister says we can get 100% only until our provincial fiscal capacity equals that of Ontario. Ontario's fiscal capacity, as the member knows, is based entirely on the performance of its economy. If Newfoundland and Labrador's fiscal capacity were based entirely on the performance of its economy, we would get 100% of our resource revenues indefinitely.

However, here is the key. The Prime Minister has artificially jacked up Newfoundland's fiscal capacity by adding in our current equalization payments and the current offshore revenues that we receive. That puts us artificially close to Ontario's fiscal capacity. Therefore, it takes only modest gains in oil revenues to reach the Ontario threshold at which time the clawback provisions of the equalization act kick in again.

Does the Minister of Natural Resources actually think he is fooling anyone by this constant bafflegab? I ask the minister to stand on his feet and explain to us today Ontario's fiscal capacity versus Newfoundland and Labrador's fiscal capacity, and if the clawback will kick in at that time.

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11:20 a.m.

Liberal

R. John Efford Liberal Avalon, NL

Madam Speaker, it is unbecoming of my colleague opposite to be using that language. I have never used it toward him in all my political career, and we have had some discussions.

Let us talk about the misunderstanding. The Premier of Newfoundland and Labrador said himself that there had to be some misunderstanding around this deal.

Let us get to the fiscal capacity of Ontario. First, we will receive, and are receiving today, 100% of the revenues. We will receive the equalization. We will receive the 30% on top of that. We will receive 100% of the 70¢, which 70¢ and 30¢ makes $1, on top of that. That will not change. That brings it up to the level of Ontario. Only when our revenue starts increasing above that, will we start losing on equalization. Until then, equalization will not be lifted. If that does not change within the next eight years, nothing changes. If our revenue grows beyond the 100% we are receiving now, we would still receive that and we would receive it until it reached wherever the limits would go, like Ontario or in particular, Alberta.

The hon. members opposite do not understand the formula.

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11:20 a.m.

Humber—St. Barbe—Baie Verte Newfoundland & Labrador

Liberal

Gerry Byrne LiberalParliamentary Secretary to the Minister of Intergovernmental Affairs

Madam Speaker, during the course of the debate on this issue, not just in the House, but for the past many days, weeks, months and years, there has been a coalition of very solid, sound people who have stood forward to promote good public policy. Unfortunately, there has also been a very small contingent that has seen fit to try to seize political opportunity. I am not seeing that in this House, and this is a very big room with very big people.

Notwithstanding the preamble to this motion, because as someone who understands and respects what position he is in and others are in, I want to get to the heart of the issue to find out the intentions of the Minister of Natural Resources. As for part B of the question, I ask him to answer a simple question, yea or nay. If the motion were simply “that the federal government immediately implement the pledges of June 5 and 27 and allow the provinces of Newfoundland and Labrador and Nova Scotia to keep 100% of their provincial offshore oil and gas revenues”, if it were that succinct and clear in form, would he vote for it, yes or no, why or why not?

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November 4th, 2004 / 11:25 a.m.

Liberal

R. John Efford Liberal Avalon, NL

Madam Speaker, as a Newfoundland and Labradorian, I would do nothing less. Absolutely yes, I would vote for it.

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11:25 a.m.

Conservative

Peter MacKay Conservative Central Nova, NS

Madam Speaker, I will ask a very short, specific question of the member opposite.

With respect to this current deal, the understanding is that yes, there is a fiscal capacity element but it is for future production. Upon completion of Hibernia, if there are other gas fields in Newfoundland and Labrador, similarly in Nova Scotia where Deep Panuke comes in, will the clawback then kick in and apply to those new gas production fields off the coasts of Newfoundland and Labrador and Nova Scotia?