Debates of March 22nd, 2007

Opposition Motion--Equalization

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, once again, I am amazed at the rhetoric I am hearing from members opposite today. Consistently we have heard the members from Atlantic Canada try to demonstrate or prove that there is a fiscal cap on the Atlantic accord. There is no cap.

Let me be clear for all members in this place and all Canadians watching this debate. The terms and provisions, the benefits that Atlantic Canada, Newfoundland and Labrador and Nova Scotia received from signing the Atlantic accord in 2004 have not changed. There is no fiscal cap placed on the Atlantic accord. There is no change to the provisions. There is no change to the wording.

Therefore, the recipients, those being the provinces of Newfoundland and Labrador and Nova Scotia, received exactly the same deal that they received when they signed the deal. Yet although the budget absolutely refutes the fact, they are trying to say in the House that there is a cap on the accord. There is no cap.

I am not sure if the member opposite is absolutely clueless about the wording of the budget and the impact he has on the accord, or if he is purposely trying to deceive people with his rhetoric. Would he not agree that contained in budget 2007 are words that state, unequivocally, that the Atlantic accord will not be changed, that it will be honoured and respected as written in the original state?

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Speaker, when parties start to use language, and I do not think is very parliamentary, which is meant to belittle, we know exactly the platform from where they come, which is probably not a platform of strength.

However, we come from a platform of strength in saying that when we made a promise, when we made a commitment, we fulfilled the promise. In fact to this day, the province of Newfoundland and Labrador has received the benefit of a cheque of $2 billion from a promise made, promise kept. However, it has not been kept by the Conservatives.

A fundamental, unfair choice was required, which restricted the national program from gaining access to the people, to the province and to the government of Newfoundland and Labrador. A decision point had to be taken. Either it had to take the new equalization formula, a 10 province standard that exempted 100% of non-renewable natural resources or 50% of all natural resources, with a cap, or keep its Atlantic accord and not enjoy the benefits of a 10 province standard, without fulfilling the Conservative promise of 100% of non-renewable natural resources.

The people of Newfoundland and Labrador know very well that non-renewable natural resources also include the riches of Voisey's Bay, the iron ore of Labrador City, Wabush, the gold of Baie Verte and onshore oil developments that are occur in the Port au Port Peninsula. That is the fundamental difference.

A cap is being proposed on the Atlantic accord. Either the province accepts the national program with the cap or it loses $225 million, according to the budget documents tabled in the House. That is not a promise kept.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, my colleague who spoke did a great job. He was around in November 2004 when we debated the Conservative opposition day motion. Among other things, the member for Central Nova said that in the next election, the people of Nova Scotia would remember that it was the now Prime Minister, then opposition leader, and the Conservatives who supported Premier Hamm's government in its fight for its resources, and that would have gone for Premier Williams as well.

Does he think the people of Newfoundland and Labrador will remember what the Conservative government has done in this case?

I go back to something the Parliamentary Secretary to the Minister of Finance said this morning. This was also evident in the government's budget books of last year. She said that the Atlantic accord and other previous fiscal arrangements like it were gerrymandered. The words disjointed and knee-jerk were used. Does my colleague think the Atlantic accord was a gerrymandered, disjointed, knee-jerked document?

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Speaker, there certainly was an element of Gerry in that. We on this side of the House worked very hard to get that Atlantic accord in place, and we were very successful with the $2.6 billion agreement being signed for Newfoundland and Labrador. In actual fact, the benefits of the Atlantic accord are probably much greater than that.

As we know, the Atlantic accord was established for Nova Scotia with the hard work of the MPs from Nova Scotia, and from Newfoundland and Labrador, based on an oil price of $35 a barrel. We now know the price of oil is much higher than that. Therefore, the $900 million that the member for Dartmouth—Cole Harbour helped to achieve for his province, a $900 million cash payment upfront, was achieved with a $2 billion payment for Newfoundland and Labrador.

We know those benefits will be much higher under the circumstances with the price of oil. That is working very hard for one's province and constituency and seeing results, and that is the Liberal thing.

[Rona Ambrose, Conservative, President of the Queen's Privy Council for Canada]

Mr. Speaker, I will be splitting my time with my colleague and good friend the Minister of Fisheries and Oceans.

I am honoured to be able to reiterate our commitment to the people of Atlantic Canada on how we delivered on our promise to exclude non-renewable resources and honour the offshore accords.

All one has to do is read the budget as delivered by my esteemed colleague the Minister of Finance on March 19 to see that the Prime Minister of Canada has kept his promise to Atlantic Canadians.

The Minister of Finance described budget 2007 as a historic document, and with good reason. Underpinning the budget exercise is our commitment to strengthening our federation and fulfilling the Prime Minister's vision of open federalism in which all governments come together to help Canadians realize their full potential. Nowhere is that more evident than in our Atlantic regions.

We all appreciate the incredible beauty and richness of our Atlantic regions and we recognize their considerable contributions to making this country great. However, we also recognize the unique economic and fiscal challenges faced by these same provinces, particularly Newfoundland and Labrador, and the strong commitment of that province to improve its fiscal situation.

It is evident that the development of offshore oil and gas projects over the course of the last decade has allowed Newfoundland and Labrador to benefit from one of the highest economic growth rates of any Canadian province in recent years.

However, the province also faces a range of economic and fiscal circumstances, notably, a high provincial debt burden and a declining population that will also give rise to unique challenges for the government of Newfoundland and Labrador in providing essential public services to its citizens.

In recognition of these special economic and fiscal circumstances, we made a commitment to work to ensure that Newfoundland and Labrador receives even greater financial benefits from its offshore revenues.

Similarly, our offshore agreement with Nova Scotia ensures that the people of Nova Scotia are primary beneficiaries of offshore resource revenues. This arrangement addresses the unique economic situation of Nova Scotia while also being fair to all Canadians.

The offshore accords with these two provinces provides them with a time limited payment to fully offset any reductions in equalization that would otherwise be triggered by their offshore revenues. With the protection of their offshore accords in the budget, Newfoundland and Labrador and Nova Scotia will continue to have the opportunity to make sustained improvements to their economic and fiscal situation.

It is important to note that we have honoured our commitment to Atlantic Canada by respecting the offshore accords as they were signed before the budget and after the budget. The Atlantic accord when signed was a historic day for Newfoundland and Labrador and Nova Scotia. When it happened in 2005, Premier Williams himself said:

A brand-new day has dawned in Newfoundland and Labrador—a day of hope, a day of joy, a day of pride and a day of promise.

It is important that Atlantic Canadians recognize that the Atlantic accords remain today as they were on that day, the day described by Premier Williams as a day of hope, a day of joy and a day of pride.

There is more than that. In budget 2007, our new government, outside of respecting the Atlantic accords, has also invested more than $1.5 billion in Newfoundland and Labrador for priorities such as health care, the environment, infrastructure and education.

This is also about building a strong, united Canada with a strong economic union. The budget makes some important inroads in restoring our fiscal balance by setting out a principled-base plan and taking immediate action through our commitments to restore fiscal balance with provinces and territories by putting transfers on a long term principled-based footing.

It also takes another step toward restoring fiscal balance with Canadian taxpayers through major tax reductions and our new tax back guarantee. It also makes governments more accountable to Canadians by clarifying roles and responsibilities. It will strengthen our economic union based on our plan set out in Advantage Canada.

Now that the fiscal balance has been restored, governments, including provincial governments, can focus on what matters to Canadians: strengthening our health care system; achieving excellence and accessibility in our post-secondary education system; ensuring that we have skilled workers to meet the needs of our economy and compete with the best in the world; help make training available to those who need it; and make progress on environmental challenges. We will create better roads and transit systems and again build a stronger economic union for Canada.

Canada's new government committed to pursuing a vision based on open federalism. This vision is based on a renewed federation which respects areas of jurisdiction and limits the use of our federal spending power. Budget 2007 fulfills this commitment. It presents a long term plan which reflects the needs of all provinces and territories.

It is also worth noting that fiscal balance and open federalism are not abstract concepts. In fact, for many Canadians, fiscal balance represents something very tangible. As my colleague the Minister of Finance said, fiscal balance in essence is about better roads and renewed public transit, about better health care, better equipped universities, and cleaner oceans, rivers, lakes and air.

It is about training to help Canadians get the skills that they need and it is about building a better future for our country. That means getting adequate funding to provincial and territorial governments. That is exactly what we did in our budget and that is exactly what the Prime Minister has done in retaining the offshore accords in their entirety.

The Minister of Finance has good reason to refer to this budget as a historic document. I am particularly proud to note that our approach to open federalism and restoring fiscal balance is the result of significant consultations conducted with all of our partners, including the provinces.

In the spirit of open federalism we worked with every province and territory, and sought views on ways to achieve a balance between a principle-based approach, to limiting federal spending power, and the need to ensure flexibility. We sought perspectives on lessons learned from the past, options for future consideration, and potential priority areas for action.

We also demonstrated to the provinces and territories our commitment to our new and open federalism. We provided an opportunity for provinces and territories to share their views on ways to achieve this level of accountability. We committed to returning the equalization program to a principle-based, formula driven footing as part of our plan to restore fiscal balance.

The equalization program was thoroughly studied by an independent expert panel chaired by Al O'Brien, a highly respected former Alberta deputy treasurer. The O'Brien report proposed a comprehensive, principles-based set of reforms to the equalization program. We reviewed this report and consulted extensively with Canadians and provincial governments. We have concluded that the O'Brien report forms a solid foundation for the renewal of the equalization program.

We now have a formula that is fair and principled to build a strong economic union in Canada. We kept our promise to the provinces and territories to exclude non-renewable resource revenues. Provinces have the option to receive payments based on full exclusion of resource revenues if it provides them a higher benefit. This is fair to all provinces and will help build a stronger and a united Canada.

We also kept our promise to Atlantic Canadians to fully respect the offshore accords. Newfoundland and Labrador and Nova Scotia will be able to continue to operate under the deal that they signed and we respect that. The new equalization program will also give provinces the higher of the payments calculated under 50% their natural resource revenues or full exclusion. This is also fair and principled. It is fair to all provinces and will also help build a strong, united Canada.

Giving provinces the benefit of exclusion, full exclusion, or 50% exclusion, fulfills our government's commitment to fully exclude non-renewable resource revenues without lowering payments to any province. And again, this is fair to all provinces. It is a principled approach and it is about building a strong economic union. We said that we would respect the offshore accords with Newfoundland and Labrador and Nova Scotia and we did. This is also fair and it was also the right thing to do.

I would quote again the premier himself the day that the Atlantic accords were signed. He said: “A brand-new day has dawned in Newfoundland and Labrador—a day of hope, a day of joy, a day of pride and a day of promise”.

Newfoundland and Labrador and Nova Scotia continue to get the same benefits of their offshore accords and receive the full benefits envisioned in these agreements by the people of Atlantic Canada.

We are proudly stating our commitments and keeping our promises in an open and principled way to the people of Atlantic Canada. In so doing, we have strengthened our federation, so that all governments can work collaboratively to build a stronger united Canada.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, on November 2, 2004 the hon. member, who sits across the way, and I had a conversation over this very same debate. I would like to remind her what she had said to this House. She said:

Alberta's history is one that Newfoundlanders can relate to. In the early part of the 20th century, Alberta's legislators campaigned to ensure that Alberta was granted full rights over its natural resources. Ottawa eventually acquiesced, but not without a fight. In the 1940s and 1950s, Alberta began to strike oil. The difference then was that natural resources were not clawed back in equalization, so while Alberta began to build an oil and gas industry, it used those profits to build [itself up].

When I asked the question again, her comments were:

--when equalization was first brought forward in 1957, non-renewable natural resources were not in the formula so that obviously was of benefit to Alberta--

In 1957 there was no cap. It was below the line, the average, the fiscal capacity, and Alberta was allowed to punch through it, unhindered. But, now, she is saying that it is okay to impose that on Saskatchewan. It is not a fair deal.

If she was a legislator in Alberta in 1957, a good 12 years before she was born but nonetheless, and saw this deal that they are bringing down, she would be deeply disappointed. I would like to ask her to comment on that.

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

Mr. Speaker, equalization is one of the most essential and important programs to build a strong economic union and a strong federation in this country.

Our government, very courageously, made a step forward to reform equalization, something that the previous government never had the guts or the courage to do.

This is an important program to build a strong federation, to ensure that, as I would say most simply, a grandmother in Alberta and a grandmother in Newfoundland can have access to comparably the same level of public services that they need when living across the country from one another. To do that, we needed to re-examine the equalization formula.

We chose to look at the recommendations from an independent panel of experts chaired by one of the most highly respected people that deal with this issue. This panel of experts, I would like to remind the member, was struck by the former government.

What came out of that report were recommendations that are principled and that bring, we believe very strongly as do many experts, a principled long term solution to the problems that we previously saw in equalization. This is something that will benefit all Canadians from coast to coast, particularly, in terms of our respect for the offshore accords, the people of the Atlantic regions.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, the NDP leader in Nova Scotia, Darrell Dexter, said that the Conservative government is treating Nova Scotia, indeed the Atlantic provinces, in a way that will enshrine regional disparity.

Perhaps the member may not want to just listen to the NDP leader. The premier of Newfoundland and Labrador, Mr. Williams, also said that this is the same Prime Minister who basically reneged on money for women, literacy groups, volunteers, students, and minority rights. He has not lived up to the Kyoto accord and the accord for aboriginal people. There is a long list of people who have been hard done by this minority government. If the Conservatives were to become a majority government, we would have to be very concerned about what commitments they would deliver.

I have a question for the hon. member. What other campaign promise is the government planning to break?

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

Mr. Speaker, what we are talking about today is honouring our commitment to the people of Atlantic Canada, and we did just that.

The premier of Newfoundland and Labrador asked us to keep our commitment to the offshore accords that he signed. When he did sign the accord, he said that this was a brand new day for Newfoundland and Labrador, a day of hope, a day of joy, a day of pride, and a day of promise.

That accord is the same accord before the day of the budget as it is the day after the budget. Newfoundlanders and Labradorians will continue to receive the full benefit of the offshore accords, as will the province of Nova Scotia.

This was a historic agreement for the Atlantic region, one that gave them the opportunity to see benefits from their resource revenues for years to come. This was a huge success and we recognize that, which is why in the budget we ensured that the Atlantic accord would not be capped, that there would be no changes to the Atlantic accord, and that it would be fully respected and that all of the benefits that flowed from the Atlantic accord would remain as is.

The Prime Minister made that promise to the Atlantic region. He has kept his promise and Atlantic Canadians will continue to see the benefit of the promise made, promise kept by the Prime Minister.

[Loyola Hearn, Conservative, Minister of Fisheries and Oceans]

Mr. Speaker, let me thank my colleague for sharing her time.

Equalization is just part of the story. Under the new budget, this government has invested more than $1.5 billion in Newfoundland and Labrador for such priorities as health care, the environment, infrastructure and education. However, today's story is about equalization. I want to do two things. First of all, I want to put some factual information on the record.

Newfoundland and Labrador is quickly becoming a have province, something we are very proud of. Just eight years ago, in 1999-2000, Newfoundland received $1.169 billion, almost $1.2 billion, in equalization payments. Since then there has been a steady and steep decline in equalization payments to the province: $861 million in 2005-06; $632 million this year; $477 million next year; and $197 million projected for 2008-09. That is an 85% drop in equalization payments.

The numbers tell a dramatic story of a long dependent province using its own resources to achieve self-reliance. It has not happened very often in this country, and it is usually the reverse, but it is happening right now in Canada's youngest province, my province, so far out on the eastern fringe of the country that most Canadians do not even notice us until we yell.

Taking an 85% cut in equalization payments in 10 years cold turkey can be difficult. The Atlantic accord offset payments were negotiated to cushion that effect and to smooth the transition from an equalization receiving province to a non-receiving province, which we have always striven for, which is what we want to be. The accord offset payments do just that.

While equalization payments dropped, as I mentioned, to $861 million last year, Newfoundland received $189 million in offset payments under the accord for a total of $1.05 billion. This year equalization and the accord offset payments totalled $961 million. Some of that is because of our population drop. Next year they will total $971 million. In the following year when equalization payments drop down to $197 million, the accord offset payments will rise to $757 million for a combined payment of $954 million.

The accord offset money is not taken from the pockets of other Canadians. It is revenue from the development of our own natural resources that Newfoundland can hold on to at least for a while to make adjustments to become a self-reliant province of Canada.

Newfoundlanders and Labradorians are understandably concerned that those transitional accord benefits will be lost, reduced or kept in the new equalization plan that the finance minister put forward in the budget. When Newfoundlanders are concerned, they let us know, as they are doing now. There are no back doors in my province. Everything is up front and very personal. We accept that.

However, Newfoundlanders need not worry about the accord offset payments. The payments remain intact just as they were negotiated by Premier Williams in 2005. They have not been changed. They have not been capped or mutilated in any way, not one tittle, not one jot, as former member John Crosbie would say.

Let me come back to that. Accord offset payments will not go on forever. When the accord offset agreement was negotiated, the province and the federal government agreed to an expiry date which could come as soon as 2012 or as late as 2020, depending on whether or not Newfoundland and Labrador is still entitled to receive equalization in 2011 or 2012.

In any case, accord offset payments will run out either in 2012 or 2020. If Newfoundland and Labrador is still entitled to equalization when that happens or at any earlier time, the province may want to choose those payments to come through the new equalization program delivered in the budget. Under the new plan, all provinces will be able to exclude 50% of all their natural resource revenues or just non-renewable resource revenues from the calculation of fiscal capacity, whichever exclusion rate delivers the greatest benefits to each province.

The new program gives much greater protection against declining resource prices and production levels and provides greater incentive for a resource rich province like mine to develop its resources. Simply put, the old formula penalized problems for developing resources. The new one rewards them.

Let me come back to something stated this morning by the member for Bonavista—Gander—Grand Falls—Windsor. He talked about promises. Yes, there were promises and they have been quoted correctly. During the campaign our party committed to take out 100% of the non-renewable resources from the formula. That commitment was made as he stated, by the way. He said that in response to Premier Williams the Prime Minister said that we would remove non-renewable resources from the formula. That is true. It is in writing not only to Premier Williams but to other premiers. That was a promise not to Newfoundland and Labrador but to the Canadian people.

There was one other promise and that occurred when the premiers themselves got together, when the finance ministers got together, when they met with federal officials and realized that the commitment would not be carried out simply because they could not agree. The premiers could not agree upon a common formula. They did not accept the 100% non-renewable resources out of the formula. The majority of them rejected it. They did not want it. A new formula had to be put in place.

Because equalization is a federal program, it was up to the federal government and the minister to find that compromise. The compromise was a report commissioned by the former government. It was a good report, supposedly a fair report that would put equalization on a fair and equitable base. However, it was evident that if that formula were accepted, as most premiers thought, at least one province that would lose, and maybe more, would be the province of Newfoundland and Labrador. Premier Williams, in his wisdom, asked for a second commitment and there was a second promise made.

The member for Bonavista—Gander—Grand Falls—Windsor said this morning that the Conservative Party would leave Newfoundland and Labrador with 100% of its oil and gas revenues and there would be no cap. He said it was a promise broken. That is totally incorrect. He either did not read the budget, does not understand it or does not understand our province.

Premier Williams asked if the government went with the O'Brien formula whether it would make sure that the Atlantic accord was not capped. The commitment from this government to Newfoundland and Labrador is that the Atlantic accord will continue as it has and it will not be capped. Our province has not lost one cent, not one.

Could we have benefited if the premiers and the provinces had agreed to a new formula? Perhaps. It depends on who is in, who is out and what is brought or taken. However, we have not lost one cent and the commitment to deliver the Atlantic accord without a cap is there and will always be there until the agreement runs out. That is well into the future and Newfoundland and Labrador will be, not just well on its way, but it will be a have province.

What would have happened if the leader of the Liberal Party had been in place? This is what he said. He stated, “Don't ask me to pretend there is a fiscal imbalance and elect me and hope I will fix it. I don't want to create these kinds of expectations”. We would have gotten nothing at all from the Liberals.

Let me say that the commitments to our province will be kept. We will not interfere with the Atlantic accord. There will not be any cap on our Atlantic accord. We have not lost one cent in the transition, not one cent. It is up to the premiers to start negotiating with governments again to try to improve upon their lot.

We are very lucky to have the resources we have. We are benefiting greatly from them. There is a very bright future, thanks to the provincial government and thanks to our efforts for the great province of Newfoundland and Labrador.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, it seems my name is known quite a bit in this little conversation we have been having.

Let me get this straight. What the Conservatives trumpet, what they talk about, what the minister talks about in this particular budget, what he brags about by saying “no cap”, “offset payments”, “principal beneficiaries of our own resources”, is all that we did and he condemned so much.

The perception was that his government and his leader were going to do much more, $200 million more, by taking non-renewables out of the formula, in addition to the accord. Here is the choice that he has been giving Newfoundlanders and Labradorians: they can either stay with what they have got or get less, which apparently in 2012 is likely, according to this.

He complained about the premiers. The Minister of Finance said that they have a great relationship with the premiers, yet the Minister of Fisheries and Oceans said that is not the case. They could not agree. They argued too much and therefore, his commitment was scuttled. Therefore, his government, around a cabinet table, had to come up with a compromise. Each region of the country spoke about their region's concerns and when it came to Newfoundland and Labrador, you, sir, did not show up.

[The Acting Speaker, Andrew Scheer]

I would just remind the hon. member for Bonavista—Gander—Grand Falls—Windsor to address comments through the Chair, not directly at hon. members. The hon. Minister of Fisheries and Oceans.

[Loyola Hearn, Conservative, St. John's South—Mount Pearl, NL]

Mr. Speaker, let me set the George Baker wannabe straight.

First, these decisions are not made around the cabinet table. These decisions are made in negotiations, first of all with the provinces and then by the Minister of Finance and they are kept secret, as they should be, until the budget comes out.

The member opposite talked about the deal. When he said this morning that this promise was broken, that the Atlantic accord was going to be kept, he had not even read the budget.

He also mentioned the deal that the Liberals delivered. Yes, they did, but they delivered it because of the hard work by the people who were then on the opposition side, members of our party, who day after day after day embarrassed the Liberals and forced them, and because of the work of Premier Williams and the people of Newfoundland and Labrador.

Let me say to the member that he should read Hansard and compare his input to mine in trying to get the Atlantic accord.

In the lead up to the budget, when it was quite clear that there were concerns, when Premier Williams was going around the country trying to build support for his stand, which he did not get but give him credit that he tried, where was the hon. member? How many questions are in Hansard from the hon. member or any hon. member over there about the Atlantic accord, about what we would get or what we would lose? Goose egg.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Speaker, the goose egg goes into a negative. It is not zero. It is not a positive. It is a zero. When we look at table one in the document “Restoring Fiscal Balance for a Stronger Federation” in the 2007 budget documents, it describes exactly what the impact will be to Newfoundland and Labrador and to Nova Scotia should they abandon their Atlantic accords, as is required of them if they want to participate in the new equalization formula. Should they do that, according to the government's own documents, it will cost the government of Newfoundland and Labrador $138 million in lost benefits, or for the province of Nova Scotia, it will cost the government of Nova Scotia $95 million, should they opt in to the new equalization formula.

Therefore, would the hon. minister, who I think is quite committed and dedicated to his province, but is not on the right side of this issue, not agree that it is in effect a cap on the Atlantic accord?

[Loyola Hearn, Conservative, St. John's South—Mount Pearl, NL]

Mr. Speaker, let us leave out Nova Scotia and talk about Newfoundland and Labrador, the member's province and my province. If our province accepted the O'Brien formula, we would be close to $200 million, a billion dollars over five years, worse off.

I did not say that they could not agree with the finance minister. However, when the commitment was made to the provinces by the federal government, a consensus could not be reached on the formula so one was brought in, the O'Brien formula, but we would lose. We knew that and Premier Williams knew that, which is why he asked for no cap on the Atlantic accord and got it. A third choice was given to two provinces only, Newfoundland and Labrador and Nova Scotia. The choice was that instead of taking either one of the other options, which would diminish their revenues, they could hold on to the Atlantic accord benefits for five or maybe thirteen more years.

Why would Newfoundland and Labrador and Nova Scotia give that up for the next five years when they have the choice of opting out, at any time by the way? They do not have to go tomorrow or the next day. Why would they opt out when they have these benefits and have five years to negotiate a better deal? That is what I asked the member.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, I will be sharing my time with the relatively capable and, most times, eloquent member for Dartmouth—Cole Harbour.

It is sad to think that as an elected member from Nova Scotia, representing the people of Cape Breton Canso, I must come to this chamber and again fight for what is theirs and fight a battle that has already been won.

When we look at the accord, the deal that was signed by a past government with the premiers of two provinces, it is shameful, as a result of the budget last week, that we are forced to once again go back and plead our case and make it look like it is cap in hand politics coming from the east coast. That is shameful and it is as a result of the actions of the government.

The saddest part for me is that the Conservatives, through today's debate, have been able to look straight into the camera and spin to the people of Nova Scotia and the people of Newfoundland and Labrador that this is a good deal for them, that there is no loss and that they are supportive of the people in their provinces. We know that it is just not true. However, it is not surprising because we have seen this time and again: a break in the trust, a word given by the government and promises made by the government but yet all we get are broken promises.

However, I can say that Nova Scotians know. The government is not going to spin Nova Scotians who know the difference on this particular issue. Atlantic Canadians know the difference.

I want to mention a comment by the premier of Newfoundland and Labrador, Danny Williams, because when he came out hard against the budget I thought he nailed it early. He referred to a written promise by the Prime Minister that he would have received in a lead up to the last election. The letter reads.

A Conservative government would support changes to the equalization program to ensure provinces and territories have the opportunity to develop their economies and sustain important core social services. We will remove non-renewable natural resource revenue from the equalization formula to encourage the development of economic growth in the non-renewable service sectors across Canada.

That was in writing to the premier of Newfoundland and Labrador. We know the result of that. We know how things have changed and of the broken promise to those people. We know the comments of Premier Danny Williams. He stated that the Prime Minister “should not be trusted”. Surprise, surprise. We have seen time and again the actions of the Prime Minister. He has broken faith and broken promises continually, not just to the provinces, but to the people of Canada.

What about income trusts? We can take another blurb from the campaign platform, from the Prime Minister.

A Conservative government will stop the Liberal attack on savings and preserve income trusts by not imposing any new taxes on them.

We know the break in trust there, the big trust bust of a 31.5% tax on income trusts; $25 billion in losses for hard-working Canadians. It drove the TSX down over 300 points. We saw that promise made and we saw that promise broken and yet the Conservatives will look straight into the camera and tell us that we are getting one heck of a deal from them.

I spoke earlier in the debate with the member from Eastern Shore. Both he and I have raised in the House the promise in writing to the widow of a second world war veteran, Joyce Carter, a fabulous lady who has done a temendous amount of work for the veterans independence program. Prior to the last election, she had in her hand an assurance from the then leader of the official opposition that if put in power his party would deliver provisions under the VIP for all veterans, second world war veterans, Korean War veterans. All veterans would be covered under VIP immediately.

A little bit of time has passed. The Conservative government has had two cracks at it. It has had two budgets and both times it failed to deliver on that VIP promise. It failed to support the promise that was made to the veterans of this country and the widows of those veterans. The government has broken faith.

Premier Rodney MacDonald has put forward a resolution in the provincial legislature. Danny Williams came out strong as a result of the budget announcement by the government. Premier MacDonald was a little more tentative. He said that the budget was disappointing. I was a little surprised by that because it is sort of like Britney Spears walking out of the barber shop two weeks ago and looking in the mirror and saying “It is a little disappointing”. If we think Britney was skinned, the people in Nova Scotia were skinned with this budget.

Today in the Nova Scotia legislature the premier has rallied the support of all parties. The premier understands that the intent of the Atlantic accord was to be a stand alone, economic tool to support Nova Scotia's goal of self-sufficiency. I want to quote the premier today. He said:

The federal government has laid down a discriminatory budgetary hammer on the people of Nova Scotia.

It is blatantly unfair.

In altering the formula and treating our accord money as equalization, the federal government has done exactly what it said it would not do, and pushed us backward.

Those statements were made by the Conservative premier of the province of Nova Scotia. The entire legislative assembly has rallied around this. There is a call to the Prime Minister to ensure that the intent of the Atlantic accord is respected and honoured.

I am sure my colleague from Sydney--Victoria would support me on this. Although both he and I are of different political stripes from the former premier of Nova Scotia, John Hamm, we held a great deal of respect for the former premier. He was a man of his word and he was honourable. He certainly was not scared to deliver bad news. We were able to work with him on a number of different files. I can look at the Sydney tar ponds file and the money that was peeled out for that of $400 million; $280 million federal and $120 million provincial. The premier and both of us as elected federal officials worked with the community, which put a tremendous amount of time into the project. We moved forward with the moneys allocated to clean up that project, and it will be done.

It was sort of cute that after it made an announcement about what technology it would use, the Conservative government sent down the Minister of the Atlantic Canada Opportunities Agency to do its dirty work and said that nothing had been done in the last 13 years. It was a kick in the teeth to the community.

When the agreement was negotiated, Nove Scotia was guaranteed that it would receive 100% protection from clawbacks resulting from any increase in non-renewable resource revenue. The former Liberal prime minister went beyond that and wrote a cheque for $800 million, which the former premier applied to Nova Scotia's debt. That money loosened up $40 million a year for schools, roads, health, education, those types of initiatives.

I am standing with the legislature of Nova Scotia and with all Nova Scotians and I am asking the Prime Minister to honour the intent of the Atlantic accord through a revision to the budget.

[Pierre Poilievre, Conservative, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, I noticed that the member was very careful to avoid admitting what his party intends to take away from Canadian families.

This budget and the previous one deliver $1,200 per child under the age of six to families to help with the growing costs of child care. This budget brought in an additional $310 per child under the age of 18 for every child, for every family that pays taxes. That is real money in the pockets of real families, because this government is getting it done.

That member failed to admit that if his party got into government, in order to pay for its big spending promises his party would be taking away that $310 tax credit per child under 18. The Liberals would take away the choice in child care $1,200 allowance. They would take away all those things. That is what they would do to the middle class working families of this country in order to pay for their big spending promises. They voted against the $1,200 choice in child care allowance and against the $310 tax credit for Canadian families.

Those families need that money. They made no gains under the previous Liberal government. Now that we have opened up the store and given this to middle class families, that member and his party want to take it all away. Shame on them.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, I think it is a very interesting ploy on the part of the government to try to defend the rooking that the people of Nova Scotia took on the accord by having a downtown Ottawa member get up and try to play the shell game, change the subject, and talk about child care. Talk about a joke: it is a joke that has everything in it except the knock-knock.

Let us talk about the taxing of that benefit. Let us talk about the $250 million you put in the last budget to create new spaces. It was one-quarter of what we had allocated, the $1 billion that had been negotiated to create new child care spaces, which you guys ripped out of the last budget upon coming to power--

[The Acting Speaker, Andrew Scheer]

Order. I would just remind the hon. member that when he says things like “you guys” he is actually referring to the Speaker. I would remind him to direct his comments to members by their riding name, title or perhaps party affiliation.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, out of respect for the Chair, I note that the government ripped out, tore out and emaciated that $1 billion investment in child care spaces.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, let us go through a short history of the Conservative Party for my hon. colleague.

Yesterday in Porters Lake, Nova Scotia, there was a class action suit against the Government of Canada regarding SISIP, a program that was part of the veterans first motion moved by the NDP and passed by the Parliament of Canada. When the Prime Minister was in opposition, he said that when motions are passed by the House, the government should honour them. We saw nothing for that veterans first motion in this budget, so now we have put forth a $290 million fix that would correct the problem of over 4,000 injured soldiers in this country.

Yesterday we saw the lowest of the low, with the Prime Minister accusing a party and its members of supporting an enemy over our own soldiers. That was disgraceful. He should apologize to all members in the House for that.

I say to the Government of Canada that it is one thing to say it stands up for the troops, and that is a good thing to do, but it has to support them when they take off their uniforms. When it comes to SISIP disabilities, these 4,000 members and their families are undergoing great financial suffering. For less than 2% of the budget surplus, the government could have fixed that problem once and for all, but now these people have to take the government to court. I would like my hon. friend from Cape Breton to comment on that, please.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, my colleague across the way and I are going to end up having some kind of a complex here, because it seems that anything we have championed the government has turned its back on. Certainly veterans are one group that has been left out in the cold in this.

The people of Nova Scotia are getting short shrift in this budget. Another item that my colleague and I have worked on is small craft harbours. This House unanimously supported a reinvestment of $35 million, which is nowhere to be found in the budget. I guess the only advice is that we should split company and try some different committee work.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I am very pleased to have a chance to speak to this motion and to try to live up to the performance of my colleague from Cape Breton—Canso.

I want to congratulate my other colleague, the member for Bonavista—Gander—Grand Falls—Windsor, for bringing this forward. I particularly want to congratulate my colleague from Halifax West, who was the regional minister in Nova Scotia and who negotiated the Atlantic accord along with Premier Hamm and with the former prime minister of Canada and our former finance minister.

If I may, I would like to preface my comments with a thought. As MPs, most of us come to this place with what I think are the best of intentions. We come here to represent our constituents. We also come here to act in a respectful and honourable manner, but every day at about 2:15 that kind of goes out the window, except on Fridays. Outside of question period, we get along. We travel together. We discuss issues. That is the way it should be.

Every now and then things go beyond question period, and November 4, 2004, was one of those days, when the motion brought forward as an opposition day motion was prefaced by this statement: “That this House deplore the attitude of the Prime Minister of Canada at and following the First Ministers' Conference...”. It was a motion designed so that Liberals could not support it, even though at that very moment we were negotiating the Atlantic accord, which came into being about a month later and was enacted a month after that.

On those occasions, we had allegations. We had charges. As Liberal MPs, we were pilloried for no reason except politics. That is shameful, because at that time the prime minister, with the member for Wascana, then the minister of finance, and the member for Halifax West, who was then the minister of fisheries and oceans, and Dr. John Hamm, the premier of Nova Scotia, a good and decent man who represented his province well, were negotiating the Atlantic accord. We had worked on it for a long time.

Whenever I saw the member for Wascana anywhere in the parliamentary precinct, and I am not alone in this, he would tell me they were working on it and it was not easy. I know it was not easy. We knew that other provinces might say it was not fair. But when it came forward and the Atlantic accord was produced, not only was it adopted by the prime minister, the finance minister and the members from the Atlantic caucus, but I am proud to say that my Liberal colleagues from other provinces, where this accord was attacked, stood with us and voted for the Atlantic accord. It was difficult. It was not easy, but it got done.

Today I stand here with my colleagues to talk about this motion that we have put forward. From my friends on this side we have heard about comments made on that day, November 4, that have backfired on Conservative MPs. We have heard the comments of Danny Williams. We have heard from Rodney MacDonald. We have heard from the premier of Saskatchewan.

I am not going to give members a lot of quotes from other politicians. I want to give members some sense of what the media are saying in Nova Scotia, because they are very unbiased. In fact, most of them in Nova Scotia are not particularly friendly to Liberals.

However, here are some headlines we had the day after the budget: One was that the Prime Minister “wants to keep Nova Scotia a have-not” province.

Another one was, “We need a fighter”, and as well, this article by David Rodenhiser states:

Nova Scotians are left asking themselves: Who's standing up for us?

Right now, the answer is no one.

Certainly not our federal cabinet minister...who's defending Ottawa rather than Nova Scotia on this.

Rodenhiser says that not even the premier is defending Nova Scotia and “is content to pursue process rather than take action”. And that was after the premier had taken some action, at least moderate action, to indicate his displeasure.

Here is another headline: “Note to Rodney: [the Prime Minister] played you big time” In the text of this article, “Message to Rodney”, Marilla Stephenson writes:

[The Prime Minister] has played you like a fiddle.

If any theme rang through the Harper budget...it was that the have-nots are to remain...have-nots.

[The Acting Speaker, Andrew Scheer]

Order. I will remind the hon. member that when quoting news articles or other documents, we do not use each other's proper names but ridings or titles, please.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Thank you, Mr. Speaker.

Here is another comment:

They think we're fools, apparently. But we are only the have-nots. We don't carry our weight, and we don't pay our own way. Most of all, we have only a few federal seats.

In the big picture, we don't count for much.

Here is another headline: “Federal Conservatives shaft province, once again”.

There is a good one today: “Purves turns on federal Tories”. Jane Purves was the chief of staff to Dr. Hamm, who helped negotiate the Atlantic accord, and who, it was announced to much fanfare a week or so ago, was going to run for the Conservatives in Halifax. She has taken a look at the budget and she is thinking twice.

Jane Purves is an honourable woman. She may decide to run for the Conservative Party, but she is having second thoughts and is saying, “ I think that whether it's understandable or not from a national point of view, I think it puts the province in a really difficult position to choose between the offshore accords and a different equalization formula”.

Here is a good one: “Atlantic Tories running for cover”. I cannot mention their names. This article is by Stephen Maher. It states, “There were signs East Coast Tories were not enjoying the situation”. One of them, who I will not mention, “whom some expect to retire rather than face the wrath of Mr. Williams in the coming election, did not comment...”.

Another statement is that a member who is normally among the most vocal MPs on the Hill “was not available for comment”. Another one “did comment, but not until his office first said he was unavailable”. Then, says the writer, “he struggled to defend the new equalization deal”.

It was not a good day for Atlantic Canadian Conservatives.

Here is another: “Harper stoops to conquer--