Debates of March 22nd, 2007

Opposition Motion--Equalization

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Mr. Speaker, in this debate today I keep asking the hon. members who are criticizing the government what is their alternative plan? What would they have done differently?

If the opposition members are going to criticize the plan of the government, then they should lay out specifically what they would do differently and how they would change it and cost it out.

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

We did it.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

When I asked the member from Gander, who is now heckling, he did not address what he would do differently. Other Liberal members did not lay out what they would do differently.

I now ask the member for Halifax what the NDP would do differently and to actually cost it out. What would her party do differently for each province if they got the changes that they wanted?

If the opposition members are not going to cost out any changes, then by their actions they have endorsed this government's position and they should say so. Actions and words should be the same.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I love the comment by the Conservative member that actions and words should be the same, because we heard the words from the former opposition leader in this House. The words were that there should be an Atlantic accord. He not only stood here in this House and proposed a motion asking members to support that Atlantic accord, it passed in this House. This is a Prime Minister who said that he was going to restore the sanctity and dignity of this Parliament, and that if there were decisions made in this Parliament, then any government in power should honour those decisions. I guess that only referred to the previous government, that if the Liberal government were part of passing something in this chamber, it should be required to honour the commitment and implement it, but that is not the case.

That former opposition leader is now in power. He is in government. He is the Prime Minister. He has seen fit to preside over and introduce a budget, to support his Ontario base from the Mike Harris team, the Ontario finance minister, and introduce a measure that creates a huge gap between his words, the commitment he made in this House and on the campaign trail, and what is in the budget.

That is what it is about, making sure that the words and the actions go together. The member from Saskatchewan should understand that in his province a unanimous motion was passed condemning this budgetary measure.

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

Mr. Speaker, I am pleased to ask a question of my colleague on her comments, which I agree with. She probably knows better than most the impact of this budget on Conservatives in Nova Scotia.

I am sure she has seen in the paper today that the vaunted Conservative candidate who was going to run against her in Halifax is having second thoughts. I do not think that she is quaking in her boots at the thought of any Conservative winning in Halifax, but Jane Purves is a good, strong, capable woman. She would be a strong candidate for the Conservatives and she is having second thoughts. I think one of the reasons she is having second thoughts is she sees the absolute lack of understanding the government has for Atlantic Canadians. She stood with Dr. Hamm when he negotiated the offshore accords.

I was very dismayed this morning when I heard the Parliamentary Secretary to the Minister of Finance talk about previous fiscal arrangements being gerrymandered. She used the terms “disjointed” and “knee-jerk” in terms of the offshore accord and other fiscal arrangements. That is an absolute clear admission that the Conservatives do not understand Nova Scotia, that they do not understand Newfoundland and Labrador.

Does my colleague think that the Atlantic accord was a gerrymandered, disjointed, knee-jerk fiscal arrangement?

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, it must be the Prime Minister who thinks that it was a gerrymandered deal that he proposed that was supported.

I welcome the member's reference to one of the declared candidates for the Conservative Party, namely Jane Purves, who made it known she was seeking the nomination to represent the people of Halifax. Jane Purves is a character. She also served very ably as the chief of staff to the premier of Nova Scotia, who actually played a very constructive, positive role in bringing political parties together to fight for fairness for Nova Scotia. I want to give him credit for that.

No wonder she is dismayed. I do not know whether she is going to try to put herself forward to say she can represent that party after it has turned its back on them, but I do know that when she declared her intentions to seek the nomination, she said that in Nova Scotia since 1980, in Halifax, people would rather eat lobster shells for lunch than vote Conservative. I can say that they now would be more prepared to eat whole lobsters within their shells for lunch before they would ever vote Conservative in the foreseeable future. I think probably that woman knows that.

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

Mr. Speaker, on the great island of Cape Breton we have a Gaelic college. I want to recite a Gaelic proverb to the House. This proverb is a very worthy one and needs to be said over and over again: “There is no greater fraud than a promise not kept”.

Since the Conservatives have formed the government under the present Prime Minister, we have witnessed the reversal of the VIP promise. We have witnessed the reversal of the marine service fees promise. We have witnessed the reversal of veterans first and veterans care motions and the assistive devices deductions promise. We have witnessed broken promise after broken promise.

This is the same Prime Minister who, when he was in opposition, rightly criticized the then Liberal government for its broken promises. The Prime Minister was absolutely correct when he was in opposition when he said that the Liberals broke their promises on various issues.

Now he is the Prime Minister of our country and is breaking a very solemn promise that was made by the Government of Canada, with his support, to the people of Nova Scotia, Newfoundland and Labrador and, for that matter, Atlantic Canada.

If the people of Canada cannot trust their Prime Minister, we are in serious trouble. Politicians in general are held in low esteem when it comes to the Canadian public and the reality is that the actions of the Prime Minister will put us even lower.

It is interesting to note that a very important fellow from Nova Scotia, Mr. Brian Lee Crowley, formerly the head of the Atlantic Institute for Market Studies, AIMS, is now working in the finance department as a visiting chair. A couple of years ago, he warned the governments of the day that there was no such thing as a fiscal imbalance. What he said was that there may be a social and a development imbalance, but there is no fiscal imbalance.

We saw the other day the crass opportunity taken by the premier of Quebec. He took a $700 million transfer payment and, instead of putting it toward the concerns that he yelled about for years, such as health and education, the environment, seniors, single moms, infrastructure, training, et cetera, what did he do? He very crassly tried to tell the people that if they voted for him they would get tax cuts. If he can give out that amount of tax cuts, then how can Quebec argue about a fiscal imbalance?

The fiscal imbalance is a myth. We have a social and development imbalance in this country.

What an outrage for Atlantic Canadians. The premier of Nova Scotia and the premier of Newfoundland and Labrador, both Conservatives, not New Democrats or Liberals or Greens or whatever, are firmly outraged at what the government has done to their people.

But we know why it has been done. It is based on crass politics. The Conservatives did the numbers. They know very well that they can afford to lose a few seats in Newfoundland and Labrador and Nova Scotia, no worries, and if they can pick them up in Ontario and Quebec, all the better for them, they think.

It is unbelievable. The Prime Minister is supposed to represent every Canadian from coast to coast to coast, not certain Canadians within central and, possibly, western Canada. I cannot describe the outrage at the budget of that great province of Saskatchewan and my former home province of B.C.

It is unbelievable. The government has a surplus of $14.2 billion, which is more than it anticipated, and those members are the same people who yelled at the Liberals for discounting the amount of the surpluses year in and year out, but they have turned around and are doing things in the exact same way themselves. It is unbelievable.

Personally I wish we would have an election so we could go to the polls and tell Canadians what the true colours of this Conservative Party are. The first four letters of that party's name spell “cons” and we know what that means. Those members have done that to the people of Atlantic Canada and they have done it very well.

The people of Nova Scotia, the province I represent, are very firm and very clear on what they want to see in a budget. They want to see development assistance. They want to see the accords maintained. They do not want an either-or. This budget is almost like blackmail: if we take this, we will not get that, it is our choice. That is not how we do federalism in this country. It is unbelievable that the Conservatives get away with this.

I can assure members that we will be telling Nova Scotians loud and clear, and telling not just Atlantic Canadians but Canadians right across the country, what the government has been up to. This is the crassest form of politics I have seen in the almost 10 years I have been here.

We in Nova Scotia are very proud and hard-working people. In fact, many of our young people are across this country working in central or western Canada, helping out those provinces by working hard. Our people are willing to go where the jobs are, but we have asked repeatedly for various things to assist our own provinces. One of them was the Atlantic accord.

Our former premier was Mr. John Hamm. Although he was a Conservative, I found him to be very respectful and dignified and a decent gentleman. With Danny Williams, he fought very hard to get the Atlantic accords to benefit the provinces of Newfoundland and Labrador and Nova Scotia and, in many ways, to benefit all of Atlantic Canada. He did that on the basis of the solemn promise that those accords would remain intact.

Let us imagine this if former Premier Hamm were still here, understanding full well that those accords are now either-or: maybe we will keep it and maybe we will not. That is not how we are supposed to treat our friends. I can understand them treating Saskatchewan and its NDP government that way. I can appreciate the politics of that. But doing that to their own Conservative people in Newfoundland and Labrador and Nova Scotia is incredible.

I challenge my Conservative colleagues in this House, especially the members for South Shore—St. Margaret's, Cumberland—Colchester—Musquodoboit Valley, and Central Nova, to stand in this House and defend the interests of Nova Scotia. That is what the old Reform Party used to do. It put constituents first, regions second and party third, but that has changed now. Many of those people do not even speak about their regions any more.

In fact, the member from Bonavista-Trinity, up in Newfoundland and Labrador, said today that if he votes against the budget he is out of the party. I remind that hon. member, whom I respect greatly, that he is there to represent those constituents of his province.

[An hon. member]

Avalon.

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

His riding is Avalon. I thank the member.

He is not here to represent the concerns of the Prime Minister. The people of that province said they wanted a voice from Avalon to Ottawa, not from Ottawa to Avalon.

I encourage the Prime Minister and the government to reverse these things, to get down to Nova Scotia, meet with Danny Williams and Rodney MacDonald, discuss this issue and straighten this out for once and for all. Maintain those Atlantic accords and do not blackmail the people of Nova Scotia and Newfoundland and Labrador. That is not how we do federalism in this country.

I can assure members that on the campaign trail my team and I work extremely hard, as do most of us. I can guarantee that this will give me an extra spring in my step to work that much harder. Any time I get an opportunity to debate whoever my Conservative counterpart will be in the election, I will welcome that individual to the debate. I will welcome that individual not just on this, but on veterans, seniors, the environment, health and education, all of these things that matter to the people of Nova Scotia and to people across this country. I welcome that debate.

In fact, I hope that person makes himself or herself public very soon because I would love to have a cup of coffee with that individual. I would love to knock on the doors opposite to that individual to see exactly how much standing up for the area that individual will do. The four previous Conservative candidates I ran against all said they wanted to be a strong voice for Sackville—Eastern Shore in Ottawa. We now find out that when Conservatives come to Ottawa, they become a strong voice for the Prime Minister's Office, not for the constituents they are elected to represent. That is a disgrace.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I listened very carefully to the passionate words of my colleague. He spoke about the Atlantic provinces and the Atlantic accord and how the government of today has literally reneged on that commitment.

He referred to Saskatchewan and British Columbia. I represent the Ontario riding of Scarborough Centre. What does he think about Ontario?

There was a commitment made under the former Liberal government for $6.5 billion. Ontario got a few crumbs, but has been silent on that. Does the member not think that we have been cheated as well?

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

There is no question about it, Mr. Speaker. Ontario is a very great province of this country. Many of my colleagues and friends come from that beautiful province and many of my friends live in the beautiful province of Ontario.

However, we go back to the old thing. A promise made should be a promise kept. When the Prime Minister of the country and his cabinet break that promise to the good people of Ontario, then the good people of Ontario will have their say in the next election.

I can assure the House that I look forward to the day when we elect hundreds and hundreds of New Democrats, not just in the province of Ontario but right across the country. It will be a great and a glorious day.

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

Mr. Speaker, although we are from different parties, my colleague across the way and I walk in similar steps in many regards.

One case that I know the member is very aware of is the case of an 80-year-old widow of a second world war veteran who also received an assurance from the then leader of the opposition, now the Prime Minister, and a written guarantee that provisions were going to be taken and that all veterans would fall under the help of the veterans independence program We are very aware of that in the House.

If the government is able to break a promise to the 80-year-old widow of one of our second world war veterans, is it any surprise that the Prime Minister would break a promise to Danny Williams?

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

Mr. Speaker, my hon. colleague and good friend from the great area of Cape Breton--Canso has said it absolutely right. I have the letter, we have the letter and the House has the letter written to Joyce Carter of St. Peter's, Cape Breton.

What kind of individual, what kind of human being, has a letter written on his behalf to a widow of a World War II veteran and promises that once his party forms the government the VIP extension will done immediately for all widows of all veterans regardless of application and income? If the Prime Minister of the country is willing to break his promise, to break his word, to the widow of a veteran, Danny Williams and Rodney MacDonald are easy pickings.

Let us try to imagine that. I do not know how the Prime Minister actually looks the Canadian people in the eye, looks veterans in the eye or looks soldiers in the eye and tells them that, by the way, as for their spouses, they had better not believe anything he says because he will break his word over and over again.

My hon. colleague has been representing Joyce Carter for many years. He is as frustrated as I am at that this promise to a widow of a veteran has been broken. It is no wonder and no surprise that the Prime Minister would also break a promise to his two political colleagues, the premier of Newfoundland and Labrador and the premier of Nova Scotia.

More importantly, he broke his word to the good people of those provinces. For that, we will make sure he wears it come the next election.

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

Mr. Speaker, I compliment my hon. colleague who is doing a masterful job at bringing out the points out in the House today, a very adequate job indeed.

Earlier he mentioned the member of Parliament for Avalon. Some interesting comments were made. The Conservatives seem to be vehemently defending the part of the budget that they call equalization, but yet comments heard through the media recall the member for Avalon saying as follows, “I mean, politicians of all political stripes have made promises before...you know...many of them have broken the promises they have made, I mean it's not a new thing to a lot of people”. The fact is that we have a budget here that is of some benefit, but in many, many ways we did not get what most people wanted on equalization, he said.

There we have it.

Therefore, now we are seeing a tightening of the message, and I am sure the hon. member, being from Nova Scotia, is experiencing the same sort of thing from his Conservative colleagues in his province.

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

Mr. Speaker, I have some brief advice for the hon. member for Avalon if he wishes to take it. If he wishes to have a long term career in politics at the federal level, he should start representing his constituents. If he wishes to have a short term career in politics, then he should keep standing behind the Prime Minister, because I can guarantee him that his career will be over come the next election.

I do not necessarily want to wish that for him. The member for Avalon is a decent, kind and hard-working individual, but this is politics. He is supposed to represent his constituents. He is supposed to represent his province. If he is unwilling to do that, he will face the consequences at the ballot box.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, I will be splitting my time with the hon. member for Humber—St. Barbe—Baie Verte.

I am pleased to participate today in this discussion about Canada's equalization system, the way that the government has changed it and the deep concern in both Atlantic Canada and western Canada that the Prime Minister has failed to keep his word.

At least five provinces are upset. The Conservative budget is proving to be controversial and deeply divisive in Saskatchewan, British Columbia, New Brunswick, Nova Scotia and Newfoundland and Labrador.

The details of equalization vary across the country. It is a complex system with 1,432 moving parts and all of those parts fluctuate and change over a four year time span during which fiscal results in 13 different jurisdictions are measured and compared.

Reasonable people with different points of view can obviously have legitimate arguments about what formula is the best, but what cannot be argued, what is beyond all doubt, is that the Conservatives made a huge, specific equalization promise to buy votes in Saskatchewan in the 2005-06 campaign, and that promise, as of the budget, has been broken.

Saskatchewan firmly believes that it has been lied to. So says the NDP government of Saskatchewan. So says the Saskatchewan Party, that would be the Conservative Party, the official opposition. So says every reporter, every columnist sand every journalist who has covered this story in Saskatchewan.

They differ on whether the promise was a smart one to make in the first place. Some of them argue that the promise was foolish or misguided to begin with. However, Saskatchewan is unanimous that the promise was in fact made and that it has in fact been broken. The issue in Saskatchewan has now changed. It is no longer a narrow debate about the fine points of equalization. It is now a more serious debate, a lament really, about not being able to trust the government, not being able to believe, in particular, the Prime Minister.

The Conservative position, at least as it then was, was laid out in the House exactly two years ago today, on March 22, 2005. That day was designated as an opposition day, just like this day, and the Conservatives moved on that opposition day motion calling for the full exclusion of non-renewable natural resources from the equalization formula. The debate makes fascinating reading. I have it with me.

The Conservatives from Saskatchewan all joined in, one after the other after the other. The member for Regina—Lumsden—Lake Centre, the member for Prince Albert, the members for Yorkton—Melville, for Saskatoon—Rosetown—Biggar, the members for Cypress Hills—Grasslands, for Battlefords—Lloydminster, for Blackstrap, for Saskatoon—Humboldt, the members for Saskatoon—Wanuskewin, for Souris—Moose Mountain and even the previous Conservative member for Desnethé—Missinippi—Churchill River.

I would note that only the members for Palliser and Regina—Qu'Appelle missed that debate two years ago today but they quickly joined in the clamour a few days later.

They all called for non-renewable natural resources to be removed, not just a little bit but 100%, from the equalization formula and those Conservatives were good enough to calculate exactly what that would mean in dollars for Saskatchewan. They did not leave it as an abstract matter of some formula. They put a dollar figure on it: $800 million per year, every year for Saskatchewan. That is what they told the people of Saskatchewan. It was in their speeches. It was in their election campaign material. It was everywhere.

The Prime Minister repeated the promise. He went on television about the promise. Election ads were run about the promise. It was clear, unequivocal and undeniable that the Conservatives would fully remove non-renewable natural resources from the equalization formula and Saskatchewan would thereby get an extra $800 million every year.

If we look through all of that documentation, all the debate from two years ago, the full Hansard record on several occasions since, all the election advertising, all those brochures, all those letters and correspondence and all the speeches, never once does that little word “cap” appear, never once does it come up in the Conservative vocabulary until the budget of 2007.

That is where and that is how the Conservative government has broken its solemn promise to Saskatchewan. It drove a stake through the heart of its promise. It drove a stake through the heart of its integrity. The Conservatives betrayed Saskatchewan because the cap they have imposed on Saskatchewan's fiscal capacity means non-renewable natural resources will never be fully excluded from the formula. Saskatchewan will never get that promised, I repeat the word “promised”, $800 million per year, $800 million from equalization alone.

What is in the budget, and I have read it with a great deal of care, is the rather paltry sum of $226 million for Saskatchewan for equalization and that amount is not ongoing. It is there once this year, probably an election year, and if we look to next year it is gone. The budget shows for next year in that column a great big zero.

This is an absolute fraud on the people of Saskatchewan and especially so when we consider that last year's Conservative budget dug a deep financial hole for the province of Saskatchewan. Far from making the fiscal situation in Saskatchewan any better, the Conservative government last year made it worse: $105 million over four years was taken away from early learning and child care; $110 million over four years was taken away from labour market partnerships for workplace training; $130 million was taken away from financial aid for students seeking higher education; $80 million was taken away from the prairie grain roads program; $50 million was taken away from the innovation agenda. The loss in aboriginal programs and services was likely in the order of about $650 million over four years. That list goes on.

If we add that all together, the accumulated losses imposed on the Saskatchewan government and the Saskatchewan people by the Conservative government and its negative decisions in the past 14 months, the tally of the losses exceeds now $1 billion over four years, which is more than $250 million on average per year. That is the annual loss and it is an ongoing loss.

Saskatchewan, in light of that, will not be placated by a one time capped payment of $226 million. Neither will Saskatchewan be fooled by this flim-flam, this con job, that somehow it is gaining by other means some $878 million. The most recent spin from Saskatchewan Conservative MPs is that this budget gives Saskatchewan $878 million. It is just not true. It is just more Conservative deception, false promises, concocted figures, everything, including the kitchen sink and the toilet, thrown together to tell a tale but not the truth.

Their arithmetic includes a great deal of one-off, one time funding that is here today, gone tomorrow and is not ongoing on an annual basis. It includes some speculative projects that have not yet been approved by independent granting agencies that make the decisions, not the government according to the Auditor General. It even includes personal tax relief projections as if that is somehow an intergovernmental transfer of funding, and it is clearly not.

The Conservatives fail to mention that virtually all that tax relief has already been offset, cancelled out already, by the personal income tax increases imposed by the government last year. They give with one hand what they have already taken away with the other. For all Canadians nationally, it is a new ongoing personal income tax burden of $1.4 billion in effect since last July.

On the overall question of transfer payments, using the government's own figures as published in the budget, over the next five years the government is taking away about $10 billion from the provinces and is only giving back $11 billion. If we take away $10 billion and give back $11 billion, it is no wonder--

[The Acting Speaker, Conservative, Andrew Scheer]

Questions and comments, the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons.

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

Mr. Speaker, as is quite typical of the member for Wascana, it is not what he says but what he does not say with respect to the equalization formula and its impact upon Saskatchewan.

Let me set the record straight. First and foremost, let us realize that equalization is a part, albeit perhaps a significant part, of the overall fiscal balance or what was formally known as the fiscal imbalance, a situation that the Leader of the Opposition and the member for Wascana refused to recognize even existed.

However, it did exist and budget 2007 took great steps to correct that fiscal imbalance and turn it into a fiscal balance situation, to the effect that Saskatchewan was by far the biggest beneficiary of any province in Canada by receiving over $230 per capita because of the new money that was sent Saskatchewan's way as a result of the changes in the equalization and social transfer structure, compared to Quebec which only received an average of $91 per person.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I rise on a point of order. If the parliamentary secretary takes too much time, it will prevent other members from asking questions as well so I ask for your--

[The Acting Speaker, Conservative, Andrew Scheer]

I thank the hon. member for Scarborough Centre but I am quite capable of managing the time. The parliamentary secretary has the floor.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I take issue with one point the hon. member for Wascana said and that is his implication that next year Saskatchewan will receive no money as a result of changes to the equalization formula. Frankly, that is absolutely and categorically false. Should Saskatchewan receive no money next year, it would be because it has become a province with a fiscal capacity high enough that it does not qualify for equalization. I know the member for Wascana understands that, although he will not admit that.

Does the member for Wascana not agree that the Saskatchewan economy, by everyone's standards in Canada, is one of the hottest economies in Canada and, frankly, have provinces do not receive equalization payments?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, I am very proud of the economy of Saskatchewan. I am very proud of the investments the previous Liberal government made that helped the province of Saskatchewan to create that buoyant economic situation.

The issue here is not about the fine points of the equalization formula. Let us be clear about that. The issue here is that the Prime Minister made a promise and he did not say that promise was capped. He made a promise that Saskatchewan would see the full removal of non-renewable natural resources from the formula and that the benefit to Saskatchewan, given the high price of resources like oil and gas right now, would net back to Saskatchewan a benefit in the neighbourhood of $800 million per year.

The issue is not how one structures the equalization formula. The issue has become that the Prime Minister made a promise. Whether that promise was a wise one, a foolish one, a complicated one or a simple one, the fact is that he made a promise and that promise has been broken. Never once in the Conservative vocabulary did the word “cap” appear until it was published in the budget three days ago.

[Diane Ablonczy, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, the fact is that the promise the Prime Minister made has been fully kept and the member knows that. The member knows that in the fixing of equalization a calculation will be made excluding 100% of non-renewable resources and that a province will get that.

The member also knows that Saskatchewan has the third highest economy in our country. He should be proud of that and celebrating that but what is he doing instead? He is crying about it.

Will the member acknowledge that there is a calculation under this new formula that will exclude 100% of non-renewable resources? Will he at least be honest about that?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, the first point in the budget documents, not the second or third point, says that there will be a cap. And, as Premier Calvert has pointed out, as the Conservative opposition leader in Saskatchewan has pointed out and as every journalist in the province has pointed out, that cap means that the full exclusion of non-renewable natural resources will never be achieved.

The government gives with one hand and puts a lid on it with the other. The fact is that Saskatchewan does not get and will not get what the Prime Minister, the former leader of the opposition and the Conservative Party, promised to Saskatchewan.

The problem here is that the Prime Minister deliberately left the impression that Saskatchewan would be getting $800 million a year. That is what Conservative campaign literature in Saskatchewan said and that is not what the government or this budget has delivered.

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

Mr. Speaker, I am very proud to represent Humber—St. Barbe—Baie Verte and less pleased to have to speak on this issue in the House of Commons.

There are two debates going on right now about budget 2007. One is occurring on the floor of the House of Commons between members opposite. The other is occurring between provincial legislatures and the federal government. We now know that several provincial governments have gone offside with budget 2007 from the Conservative minority government. Those are the provinces of B.C., Saskatchewan, Newfoundland and Labrador, Nova Scotia and as well New Brunswick. Others have expressed strong reservations about content in the budget.

However, one debate is no longer raging and that is among Canadians, who have rejected the budget. They are very concerned. They understand exactly what is being expressed by those provincial premiers and are concerned for the well-being of their provinces.

It is very clear that each and every one of us in this debate is fully engaged in what is in the best interests of our provinces. This is not a new debate in some respects. Previous debates have been categorized as being with strong acrimony, strong language directed at members, sometimes there were personal taunts and insults. I am very pleased that this debate has not come down to that because this is about a very important issue. It is about maintaining the best interests of not only our individual provinces but our country as a whole.

Strong concern has been expressed in my province of Newfoundland and Labrador. The issue at hand is about a promise being made and a promise kept. What is even more concerning is that when the promise was made, it was made emphatically, unconditionally and repeated over and again.

On January 23, 2006, a new minority government took office, one that held the smallest minority in the history of Canada, at only 125 seats. It reinforced again and again that it would maintain a commitment to remove 100% of non-renewable natural resources with no caps, no small fine print and no excuses.

For the last 14 months, that promise has been whittled away and not with a clear emphatic statement that the Conservatives would not honour the promise. We have heard messages, messages in budget 2006 issued by the finance minister. In a document called, “Restoring the Fiscal Balance”, the Atlantic accord was described as a side deal, not supported by the current minority Conservative administration.

We then heard statements from the finance minister and others that the Atlantic accords created an unfair advantage for Newfoundland and Labrador and Nova Scotia.

Today on the floor of the House of Commons, the Parliamentary Secretary to the Minister of Finance for the first time, described it in very explicit detail. She said that the Atlantic accords established an unfair advantage to Newfoundland and Labrador and Nova Scotia and that the new budget would now create equality. Obviously this is an admission that the Conservatives are quashing the benefits of the Atlantic accords.

This is is of great concern to me. For the last 14 months, premiers across the entire country have been operating under a set of principles or an understanding that the precision of law and the language of law is equal to the precision of the language of a promise. They have been establishing their own fiscal frameworks based on an understanding that the promise would be maintained and upheld.

As they established their own budgetary processes, like the province of Newfoundland and Labrador is doing, such as consolidating and securing public sector pension plans, putting in place new transportation strategies, a new ferry rate system and establishing other progressive and positive measures for the people of Newfoundland and Labrador, it was based on an understanding that a commitment to remove 100% of non-renewable natural resources, no cap, no fine print, no excuses, would be maintained.

We have heard from the finance minister of Newfoundland and Labrador that the budgetary process will be maintained. The province is now developing its budget based on its understanding as it was, and that it will guide its actions accordingly.

However, it concerns me that we now have had statements in the House that the Conservatives were key players, instrumental in crafting the Atlantic accord. In fact, the Parliamentary Secretary to the Minister of Finance said on the floor of the House of Commons this morning that as far as the Conservative Party of Canada was concerned, the Atlantic accords created an unfair advantage to the people of Newfoundland and Labrador and to Nova Scotia, that they would not have supported them and that budget 2007 was the correction to all of that.

I do not think this was the commitment given by that party, which now forms this minority government, when it put out campaign literature and literature during the Atlantic accord saying, “There is no greater fraud than a promise not kept”. The Conservatives promised they would have a regime for equalization that would exempt non-renewable natural resources at a level of 100%, with no caps, no excuses and no small print.

The government said that if it did not, then in effect the benefit from the natural resources would be removed 100% and it would maintain Newfoundland and Labrador as a have not province. Establishing the cap on equalization, as proposed, is effectively a cap, a clawback, and, therefore, by its own definition and words, is meant to maintain Newfoundland and Labrador, Nova Scotia and other provinces as have not provinces. That is not fair.

What the government has proposed in budget 2007, which is one of the many reasons why I cannot accept this budget, is to establish a dual track equalization system once again. The Conservatives will agree to exempt 100% of non-renewables or 50% of renewable and non-renewable natural resources from the equalization formula on the provision that a cap be instituted so provinces receiving equalization must be maintained as have not provinces in perpetuity. That is from the Conservatives own party literature.

Alternatively, the government suggests if those provinces that have received what it has deemed to be the unfair Atlantic accords, unfair in the national interest that create better benefits for Newfoundland and Labrador and Nova Scotia than other provinces, wish to maintain those Atlantic accords, they cannot accept the new equalization formula and, therefore, will also be left out of the 10 province standard. The government says the provinces cannot have it both ways. There cannot be a 10 province standard. The provinces cannot enjoy the enrichment of equalization to the tune of $1.5 billion and maintain the Atlantic accords.

In other words, Newfoundland and Labrador will not receive any benefit whatsoever from the Conservatives fix to what they call the fiscal imbalance. What has been created by this is several provinces feel very strongly that there is now a strong interprovincial fiscal imbalance in this country.

Why else would B.C., Saskatchewan, New Brunswick, Nova Scotia, Newfoundland and Labrador express the concerns and the frustrations that they have expressed since budget 2007 was presented in the House on March 19? Why would those provinces come forward and say that they no longer know if they can afford or provide the essential public services that they felt were able to if the promise had been kept.