Mr. Speaker, it is a pleasure to stand today and represent my province as a whole, as well as the constituents of Battlefords—Lloydminster, heavily benefiting by the oil and gas sector that needs a kick-start as it were. We are sitting on the border with Alberta poised to rush into Saskatchewan to take advantage of the huge reserves there, but to this point in time it has been a negative connotation to do that with the clawback situation that we are facing under this flawed equalization formula.
In this our centennial year, ours and Alberta's, if we look back 100 years to when we both came into this great Confederation, we ask what has changed? What made Alberta surge ahead as it has and Saskatchewan be held back? A lot of it is provincial governments of the day. All the way through Alberta has been more entrepreneurial, more progressive, we may say. Saskatchewan has been held back by some socialist thinking. A lot of it in the last 50 years since the inception in 1957 of this equalization formula has been the basis of the undoing of Saskatchewan.
Alberta got its real kick-start in the 1940s around the time of the second world war when that first oil well came in. Alberta really got a toehold and started to build and blossom from that time forward. Saskatchewan missed that opportunity. Since 1957 with this equalization formula it has almost been regressive to see it move ahead. In this centennial year we would certainly like to see that changed around.
It has been said here before and it bears repeating that under the Liberal government over the last 10 years if the formula had operated as it should have, Saskatchewan would have benefited to the tune of $8 billion. Half of that would have come from oil and gas revenues. There is no way to really sit back and quantify what that number would be today. That $4 billion catalyst over the last 10 years would have returned us 10 times that amount in oil and gas revenues and economic spin-offs in the province of Saskatchewan.
The province has been stagnant. It was said earlier today but it bears repeating that in the 1930s the population was around 930,000 to 940,000. Today Saskatchewan's population is still less than a million. The province has gone up 5% and that is all. It is stagnant.
The finance minister commented in his speech that he had a vision for Saskatchewan which saw the province really going ahead in value added, and as the minister responsible for the Canadian Wheat Board he was one of the guys who shut that down. He certainly made the government a catalyst and it just has not happened.
The one comment I really took exception to was that the government is really pushing immigration for Saskatchewan. That is all well and good, but the problem we have in Saskatchewan is the out-migration of our own kids. We educate them to be the best and the brightest, and out they go. They start running companies that are global in structure. A tremendous number of our graduates and our kids are working in Alberta in that oil patch that Alberta started before this equalization formula became a hindrance. I take exception to that.
The minister also mentioned that Saskatchewan with its huge future potential has the fiscal capacity to tax and all this type of thing, that it could step up and take over where the federal government has come up short. I am paraphrasing, but that is basically the message he was giving.
The problem with that is that the higher the taxation rate, the more regressive it is to any business moving in. We have seen that with our socialist-minded governments that are on side with this initiative at this point. However, they are certainly willing to let someone else do the heavy lifting, as we saw when Danny Williams from Newfoundland and Labrador stood tall, came forward and basically traded blow for blow with the Prime Minister. Danny Williams said that this is what was said, this is what was promised, promise made, promise broken, fix it. The Prime Minister did. Begrudgingly the Prime Minister has signed on to a deal.
No one has seen any cash yet. I know Premier Hamm of Nova Scotia who was also a beneficiary of that deal has been in touch with our caucus to ask, “Can you guys kick-start this somehow and get that cheque flowing?” It is coming to Nova Scotia's fiscal year end and the province would like a little bit of that cash flow up front as well. It is just not happening.
The finance minister has some idea that one year in Saskatchewan of this so-called have status has fixed everything. That is like going to the dentist and having one good check-up. We know there will still be problems later on.
In this our centennial year the time has come to get this fixed. It is somewhat suspect in that the Liberals knew this motion was coming, but the day before we had this supply day motion on fixing equalization, the minister finally tabled his expert panel and gave the panel its terms of reference. One would have to be a Philadelphia lawyer to figure out those terms of reference when looking at them. I am sure those folks are up to the job being the good Liberals that they are. I am sure they will be able to wade through it and come back with something that the finance minister can live with.
I know Saskatchewan took exception to one of the names that was put forward. Now we have a panel of five, instead of a panel of six. We will see how that works out. The panel has a full year to get back to the finance minister with any changes. We could very well have an election before then and we will fix this thing. We will not need a panel of experts to tell us what is wrong because the provinces and the people out there in tax land have already done that.
The whole equalization process, and the fundamental word in there is equal, has become a political process, not a practical process. We see reviews every five years, but what the government does is make the situation more complex. The parliamentary secretary alluded to that. He said, “It is not a perfect system, but it is complex”.
Thirty sources make up the basic formula. We have tinkered with it, we have played with it, but we have never done a fundamental overhaul to get it in today's terms. If we have potential in Saskatchewan, it is ours to get out there and work with, but we do not need the federal government clawing back 110% of that potential. It is regressive and there is no reason for it.
One of the huge hits we see, especially in Saskatchewan, is in the rural areas of the province. Compounded with a provincial government that has no political gain to be made in the rural areas, plus a federal government that has basically taken slap after slap at rural Canada, we see that sliding backwards. There is very poor political attendance in those areas by both the provincial and federal governments because there is no political gain.
We have to turn that around. The potential is there. The potential is not in downtown Saskatoon or Regina. The chambers of commerce may argue that, but those two communities live at the whim of the agricultural sector and of course the oil and gas sector, the cash flow commodities. They make take exception to that, but if they stop and look back, this year's Christmas rush in the malls in Saskatoon and Regina was nowhere what it should have been. The rural economy is hurting. Those people come in and spend their dollars, and it is just not happening at this point.
People are getting angry. The provincial government is crying poor when it comes to ponying up its share of the CAIS, its 40%. One can argue that formula is as flawed as the equalization one and I would agree. It needs to be changed, as well.
The provincial government is withholding the cash flow to my farmers and other farmers of Saskatchewan. Look at the changes the provincial government has made to production insurance, the old crop insurance program. Premiums have gone up as much as 50% in some instances and the coverage has gone down a minimum of 10%. They are getting caught on both ends. That speaks to the very viability of my farmers. We see the hook that is being made by the bureaucrats in both the provincial and federal governments called best farming practices. If they do not have production insurance, it affects their CAIS payout. If they do not have the cash to put on deposit in CAIS, they cannot collect the same amount of money in production insurance because of this best farming practices.
I have a lot of folks who will go through the motions this year, put the seed in the ground which they already have, but no fertilizer and chemicals. Under their historical average, they will get nailed with not following through on best farming practices and that will hit them again.
We have to start to look at some way to get some cash flowing out there. This is probably the quickest way it can be done.
The finance minister will hide behind the fact because he does not want to tamper with it. It is the same excuse the Prime Minister uses on fixing the Senate. He does not want to do it ad hoc.It basically comes down to he does not want to do it at all. The finance minister is falling into that same trap. He does not want to change anything so he hides behind the fact that he needs seven provinces and he has to have this or that. However, they can make sidebar deals with anybody they want for political gain. That speaks to the fact that it has become a political process and no longer a practical progress.
As we go through this, we look at hit after hit that has been placed on the provinces. Then the government is supposed to revive them with the equalization formula, the $25 billion that the finance minister of the day, now Prime Minister, ripped out of the health and social transfer to the provinces. Then he started to pump them back up again with a bit of increase in equalization.
The Liberals have never met a tax under any name they do not like. Tax the heck out of something and when it can no longer bear that burden, prop it up whatever way they can until it starts to crawl again and then hit it again with some more taxes. It is just a merry-go-round. The power is the money and the money is the power. Those guys are great at forming government but they fall short on governing.
When we go through the whole equalization system, look at the complexity of it, look at changes that need to be made, every political party in the province of Saskatchewan, bar none, other than the finance minister, the key Liberal minister, is in favour of changing this flawed system.
I know Harry Van Mulligen, the finance minister of Saskatchewan, was here. His quote when he came before the Senate was, “The current program does not improve stability in provincial finances as it is advertised to do, and it is not responsive to changing provincial fiscal circumstances”. I guess that sums it all up. The program that is supposed to help has become a tremendous hindrance.