Mr. Speaker, it is a pleasure, on behalf of the constituents of Prince Albert, to speak to the matter of equalization.
Prior to the last election campaign the Prime Minister made a very major commitment to the province of Saskatchewan and western Canadians. He said that since 1867 there has been a perception that Ottawa has too often favoured parts of eastern Canada while ignoring the interests of western Canada.
Unfortunately, the Prime Minister said that there was a good deal of reality to this sort of perception. He promised that under his administration this matter would be addressed, that this would not happen under his new government. He basically said that if he could not address that perception and that reality in western Canada, he would see himself as a failure as a Prime Minister. He went on to say that he would literally move heaven and hell to make sure that western Canadians felt that they were being treated fairly in this Confederation of Canada.
The Prime Minister recently eliminated the energy revenues from oil and gas from the equalization formula for two Atlantic provinces, the provinces of Newfoundland and Labrador and Nova Scotia. I am not critical of that. I think many commentators have said that non-renewable resources should be removed from that formula because it causes more problems than it helps.
The unfortunate part of that decision is that the Prime Minister is dealing with a national program. That promise was made in Newfoundland. It was made in respect to a national program, equalization. It was made in the heat of an election campaign. When he made that promise he was not only making that promise to Newfoundland and Labrador and Nova Scotia, he was making that commitment and promise to every Canadian and every province in the country.
What did the Prime Minister do after the election? He did the very thing for which he was critical. He made a change to a program that addressed a concern in the eastern part of the country while ignoring any sense of justice by applying the same principle to provinces in western Canada, in particular, the province of Saskatchewan. This is a serious injustice.
This is what an independent commentator had to say on the question of equalization. Tom Courchene, a professor in Ontario, said that the formula has had an absolutely brutal effect on the province of Saskatchewan. He said that it has the effect of actually making Saskatchewan poorer. Let me give an illustration. When Saskatchewan receives a dollar from light crude oil, it actually loses $1.20 in equalization payments. Theoretically, the province would be better off shutting off the taps and not producing oil and gas.
It is a very punitive type of formula and it is most unfortunate. When we compare the provinces of Manitoba and Saskatchewan over a 10 year period, we see that the annual difference in equalization payments between those two provinces is $800 million, and Manitoba, by all objective indicators, has a higher fiscal capacity than Saskatchewan. The cumulative effect on Saskatchewan is terrible. It is very unfair and the Prime Minister has broken another promise.