Mr. Speaker, at the end of my presentation a few days ago I was actually talking about western alienation. Even though the bill deals with the Pacific gateway, the House may wonder why western alienation came into my conversation. To recap, the Pacific gateway bill deals with $400 million which the government is suggesting it spend only after a suitable amount of time to study it by appointing a committee, many members of which would be appointed by the government, to determine what to do with the money. My point was that the British Columbia port strategy committee had already examined this issue very extensively through its own blue panel experts and had determined all of the priority spending items that should be made.
Whether the government likes it or not, people in British Columbia are feeling probably somewhat alienated by this initiative because the government is delaying and has not listened to their advice in the first place.
I can assure the House that in Saskatchewan, my home province, the feeling of alienation probably goes far beyond any other province for one primary issue and that deals with equalization.
I want to give the members who are sitting in the House today a bit of a history lesson about equalization. I want to also put the record straight. The Minister of Finance has consistently stood in the House and I believe has given some poor information, let me put it that way, about the equalization formula, the program and its impact upon Saskatchewan.
As most members probably know, equalization was designed in the late 1950s to assist provinces that did not have the fiscal capacity of others to try to equalize the level of taxation and try to equalize the level of services provided by each of the provinces. This is uniquely a Canadian program, something which I do not believe any other jurisdiction in North America and perhaps even in the world deals with.
While the program is generally beneficial and recipients are quite happy to receive the equalization payments, the fact of the matter remains that the equalization formula itself is seriously flawed. When it comes to Saskatchewan, it is costing Saskatchewan residents money.
Quite frankly, what equalization means is this. There should be a formula to determine the fiscal capacity of each and every province and then payments would be made to those have not provinces to equalize their revenue stream so that they could provide the same level of services and offer roughly the same level of taxation as some of their more wealthy neighbours.
The problem with the formula is it includes non-renewable natural resources. All of the leading experts on equalization have agreed that non-renewable natural resources should be removed from the equalization formula because that does not truly indicate fiscal capacity. Why is that? Quite simply, because non-renewable natural resources, as the name suggests, once they are taken out of the ground, as in the case of oil, are gone forever. They are not a renewable source of wealth or income. Taxation and income from other sources are renewable, but energy resources, oil and gas primarily, are not renewable.
Experts agree that they should be taken out of the equalization formula. If they were taken out, here is the impact it would have on Saskatchewan. One, our fiscal capacity would be defined at a far less level than it is today. Currently with the oil and gas prices we see today, billions of dollars are being removed from the ground in the form of oil and gas deposits. The revenue is great, but unfortunately that gives a false sense of what our fiscal capacity truly is.
On top of that, during the times that we are a have not province, for every $1 that we make from oil and gas sales in our province, the government claws back from any equalization payments up to $1.28. It is not an incentive for us to actually drill for oil and gas.
That is the biggest source of alienation that we have in our province. It demonstrates that the government does not care about our province. This is the most fundamental and revenue driven program that we have in our province, and the government and the Minister of Finance are totally ignoring reality.
I will conclude my remarks by saying that if the government truly wants to address issues such as western alienation, why does it not for once listen to members and heed their advice?