Mr. Speaker, I rise in the House in response to the question by the member for Cumberland—Colchester—Musquodoboit Valley.
On October 10 the Prime Minister and Premier Danny MacDonald announced an agreement which resolves Nova Scotia's concerns related to recent changes to the equalization program by ensuring that the province will receive at least the full benefits it expected to receive from its accord at the time it was signed in 2005. Formal letters have been exchanged between the federal finance minister and the Nova Scotia finance minister outlining the details regarding our recent agreement on the accord.
The October 10 announcement builds on measures introduced in budget 2007 which set out a new equalization program that applies equally to all provinces, while respecting existing agreements with Nova Scotia and Newfoundland and Labrador.
We have consistently said there was room for flexibility in smoothing the transition to the new principles based equalization program. The federal government is providing Nova Scotia a cumulative best of guarantee to ease its transition to the new equalization system by guaranteeing that the province will do at least as well on a cumulative basis as it would have done under the formula in place at the time of the 2005 accord. With this guarantee, Nova Scotia no longer has to be concerned about the risk of opting into the new equalization formula too early and forgoing any potential benefits of the previous formula.
How much Nova Scotia may stand to gain from this agreement will clearly depend on a variety of factors, such as economic growth, tax revenues, population, and revenues from natural resources, including oil and gas.
We can, however, guarantee that under this agreement Nova Scotia will receive all the benefits it expected to receive at the time it signed the 2005 accord, and possibly more under the new equalization formula. In fact, for the 2007-08 year alone, the new formula is giving $95 million more in equalization and offshore offsets to Nova Scotia, which the province can use to invest in its priorities.
The equalization changes agreed to will require amendments to the Federal-Provincial Fiscal Arrangements Act. We hope to introduce these changes as soon as possible as part of the Budget Implementation Act.
In addition, the agreement with Nova Scotia seeks to resolve long outstanding issues with respect to crown share adjustment payments by launching an independent panel to find an approach that is agreeable to both governments.
I am pleased that our discussions have come to a successful conclusion. This underlines the capacity of our respective governments to work together. To quote Premier Rodney MacDonald:
These two announcements...at last fulfill the long-standing federal commitment to enable Nova Scotia to become principal beneficiary of our offshore revenues.