Madam Speaker, I want to thank the hon. member, whom I have the honour of working with on the Standing Committee on Finance. She provides an invaluable contribution with her openness and understanding of finance-related matters.
For a long time now we have been talking about making changes to the equalization formula. I think there is a consensus on the 10 province standard, but there is no consensus on what direction to take to improve the equalization formula. Nonetheless, the 10 province average is relatively well received, since this is a logical formula. For one thing, we cannot establish an average with half the participants. All the participants have to be included.
Furthermore, several proposals are currently on the table. Some are acceptable to Quebec, others less so. Some are totally unacceptable, but the fact remains that consensus has been reached among the provinces on the calculation methods. The federal government could have taken advantage of this consensus to change the formula rather than simply index the amounts.
There is a real danger at present of the federal government signing specific agreements with certain provinces. This throws the application of the equalization principle out of kilter. According to this principle, a province becomes richer, exceeding the standard, it will not get any equalization payments. That we realize. It would apply to Quebec too; if its fiscal capacity suddenly went up this year, it would not be entitled to equalization payments. We believe in playing fair so we would go along with that. It might be good news, as it would mean the province was becoming better off and exceeding the standard.
We have nothing against an agreement with Newfoundland, but we do have objections to fiddling with the equalization formula so that it takes all revenues into consideration except offshore oil revenues. In the case of Quebec it includes all revenues, including the revenue-producing potential of our hydro-electric resources. This is not right, particular in the Kyoto era.
In the past 30 years, the federal government has invested very close to $60 billion in the gas and oil sector, directly or indirectly. Now a kind of incentive has been added for non-renewable resources, which is totally contrary to the Kyoto protocol we would all like to see incorporated into this government's concerns. So questions need to be asked.