Debates of June 7th, 2007

53rd Report of Procedure and House Affairs Committee

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I will be very brief. First of all, I would simply like to say that I support the hon. member for Thunder Bay—Superior North and, second, that we should be very pleased here in this House, if a process becomes truly transparent. That is the foundation of democracy. Furthermore, I would like to point out to the Leader of the Government in the House of Commons that, yesterday, I raised another issue, that is, if this were ever approved, even with the amended version, we would have three kinds of members: members who belong to a party, party members who are not recognized in this House and are not recognized as independent members, and lastly, the independent members. I think we must continue to resist this.

The House resumed consideration of the motion.

Business of Supply

[The Speaker, Peter Milliken]

Prior to oral question period, the hon. member for Jeanne-Le Ber had the floor. He now has ten minutes left for questions and comments on his speech.

The hon. member for York South—Weston.

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, I was following the discussion and the presentation made by my colleague from the Bloc. I am sure the House would be interested to hear a restatement of the relationship that the Atlantic accord has to the problem that is created with respect to equalization.

I ask that question deliberately because the Bloc is the party in this House that protects and stands to protect provincial rights. It seems to me that it was a recognition through the Atlantic accord that there in fact had been a longstanding shortage of equalization for the Atlantic provinces and that there was an agreement through the Atlantic accord to come to terms with that issue.

Yet, we find the Bloc is still resisting supporting this resolution and through the budget the continuation of the accord. Voting against the budget would at least show that the Bloc supports those provincial rights.

Would the member restate the reasons why the Bloc finds that the Atlantic accord is contradictory to the very essence of equalization and the fiscal balance that we in a federal state are attempting to achieve for the provinces?

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Speaker, the equalization program was put in place so that every province could provide equivalent services for equivalent tax rates.

The general idea is this. Each province's revenues and fiscal capacity are examined and compared to the Canadian average. Provinces whose fiscal capacity is below the Canadian average receive funds from the federal government to bring them up to the average. That is the principle.

The problem lies in how fiscal capacity is calculated. Under the Atlantic accords, the fiscal capacity of the Atlantic provinces is underestimated to make them appear poorer than they are, when the calculation is done, so that they receive more money than they would normally get if the principle were honoured.

The Bloc Québécois believes that this has nothing to do with ensuring that the Canadian federation works well. Rather, it is a purely arbitrary choice. The government decided to exclude non-renewable natural resources simply because that favoured a few provinces. It could have excluded other sectors of the economy that would have benefited Quebec.

I am sure that if the government had decided to exclude hydroelectricity and aerospace, for example, from the equalization calculation, many people would have stood up and asked why the government was deviating from the principle just to please Quebec. And they likely would have been right.

We believe that the same rule should apply to everyone. If we are going to compare the provinces' fiscal capacities, we have to do so without playing with the figures, without excluding one sector or another of the economy to benefit one province or another.

Overall, equalization has nothing to do with the fiscal imbalance because equalization is a budget transfer. With the latest equalization formula and other transfers, the Government of Quebec receives more money than before. This does not correct the fiscal imbalance, because it is not a real transfer of tax room, such as the GST or tax points.

In the next budget, the federal government can take back what it gave to Quebec, as it just took back what it had given to the Atlantic provinces. This shows that the problem of the fiscal imbalance has not been resolved at all. Even though we do not basically agree with the Atlantic accords, they are eloquent proof that, in a system based on equalization, the provinces are all at the mercy of the federal government’s benevolence at any given time for their finances. That is what we do not like and have been fighting for a very long time.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I listened to the hon. member's comments. I was interested to hear his comments and in fact I would like to ask him a question that I think is also pertinent to today's debate. It is regarding fiscal balance.

I would like to know about the previous government's tenure, but I know he is going to speak about the province of Quebec. However, it applies to all provinces. Because of the fiscal imbalance, how difficult was it for provinces to provide health care, education, post-secondary education, in addition to other types of strains? Why is it important to have a principled approach toward fiscal balance in Canada in order to provide capacity to the provinces to provide these services?

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Speaker, my colleague is quite right. For 13 years, the Liberal government did not even recognize the existence of a fiscal imbalance, and the Liberal Party still does not recognize it. They refuse to admit that there is a fiscal imbalance. People say that Quebec and the provinces have been hard hit by this, but it is really the people of Quebec and the provinces who have suffered. We cannot say that it is just the provinces and so we do not really care. People have gone without services because of the imbalance between the constitutional obligations of the federal and provincial governments and their respective revenues.

Even though the Conservative Party, for its part, recognizes that there is an imbalance in the federation, it does not really see that the imbalance is fiscal in nature. The fix it provided in the last budget took the form of cash transfers. This means that, every year and for every budget, Quebec is ultimately at the mercy of the ideological and political choices that the federal government may make in light of the political situation at the time, regardless of whether the Conservatives, the Liberals, or some other party is in power.

That is the nub of the problem. That is why Quebeckers of all political stripes in the National Assembly, regardless of whether they are Liberals, ADQ or Parti Québécois, are demanding a genuine fiscal solution. That was the thrust of the Séguin commission which asked, for example, that the GST be transferred to the provinces. Equalization would have to be re-worked, of course, if the direct transfers to the provinces were cut by this much. If there is a tax transfer to the provinces, however, they will have stable, predictable revenues over which they have full control and which are not subject to every whim of the federal government.

This is really the nub of the issue. The Liberals have never even acknowledged the existence of a fiscal imbalance, and even though the Conservatives acknowledge it in theory, they still do not understand the real nature of it. We are working hard to get this fixed in the next budget.

[Paul Zed, Liberal, Saint John, NB]

Mr. Speaker, I will be pleased and honoured to split my time with the courageous hon. member for Cumberland—Colchester—Musquodoboit Valley.

Having served in the House for seven years, I have never seen such a blatant disregard for the economic prosperity of an entire region such as the way the government and Prime Minister have treated Atlantic Canada.

The Prime Minister came to office trumpeting a new approach and a new relationship between the federal government and the provinces. He called it open federalism. He said that a Conservative government would be more sensitive to the differences between provinces and regions.

He broke promises to the governments of the Atlantic provinces and decided that the welfare of our people was not his concern. He continues with his campaign of pitting region against region.

With this budget, the Prime Minister has wielded his knives on Atlantic Canada and tried to give truth to his lie about a certain “culture of defeat”.

The numbers I find in this budget simply speak for themselves. Quebec receives a 29% increase, or almost $700 million more in equalization payments. New Brunswick, on the other hand, receives a mere 1.8%. Atlantic Canada receives only 4% of all new money spent on equalization. For the second straight year, the Atlantic Canada Opportunities Agency does not even receive a mention in a 478-page budget document.

This callous disregard for New Brunswick and all of Atlantic Canada adds to the government's list of broken promises on income trusts, the slashing of literacy programs, the failure to fund affordable housing in my city of Saint John, and the cancellation of the court challenges program. These pile onto the broken promises of the Atlantic accord.

The government simply does not understand Atlantic Canada, though the Prime Minister believes ACOA could be for wasteful projects, unnecessary spending, projects that are not of vital important to Atlantic Canadians.

It is true Atlantic Canada does not have the financial security of Alberta or the industrial base of Ontario. Ours is a region trying hard to promote itself as a destination for 21st century business and industry.

A new generation of political leaders, including my premier from New Brunswick, Shawn Graham, has taken up the challenge of reaching for full economic self-sufficiency. However, provinces like New Brunswick need help from the federal government today in order to put tomorrow's economic blueprints in place.

The former government proposed a plan that would have brought $830 million, new dollars for infrastructure and new program funding for New Brunswick, at the same time that the Atlantic accords were signed. This plan served as the baseline of funding for the province in its effort to achieve a goal of self-sufficiency. Our plan had a similar goal to the deal that was reached with Alberta in its drive for self-sufficiency 30 years ago.

The hon. member for Fredericton crafted a plan to put New Brunswick on the road to requiring less equalization from Ottawa.

What happened instead was that the former New Brunswick premier, Bernard Lord, changed from a Progressive Conservative to a Reformer. He decided he would rather deal with a Conservative government in Ottawa. The result was piecemeal projects instead of a comprehensive plan, each garnered less money than the Liberal plan.

The people of New Brunswick said no to that approach. They fired Bernard Lord for tearing up the child care agreement and saying no to $115 million in new federal spending on early learning and child care in our province.

In the months since the Prime Minister came to office, he began treating Atlantic Canada as an afterthought of Confederation. A distinct trend has swept across Atlantic Canada. In Nova Scotia the Progressive Conservative premier ranks third in popularity behind the New Democrats and the newly minted Liberal leader, Stephen McNeil; in New Brunswick, a new dynamic Liberal leader has swept aside a two time Conservative majority government; in Prince Edward Island, a new Liberal leader, Robert Ghiz, won a landslide victory over a three term Conservative majority government; and in Newfoundland, a Progressive Conservative stalwart premier goes on television every day and has three simple words for Canadians: anybody but Conservative.

These should be ominous signs for the government finding itself out of ideas after only 18 months in power and sitting across from a new, renewed, and reinvigorated Liberal Party under the leadership of the member for Saint-Laurent—Cartierville.

Things have only gotten worse this week for the government. As the hon. member for Cumberland—Colchester—Musquodoboit Valley has shown, not every member of the Conservative government's Atlantic caucus is willing to stand aside and let their province be sold out by the federal government.

As every member in the House is aware, in voting against the government, the hon. member from Nova Scotia made a great political sacrifice. He was bullied. He was maligned by his cabinet members and colleagues. He was kicked out of caucus and has since had his constituent files seized by the Conservative Party. Some new government.

Why has this happened? This has happened because the member took the word of the Prime Minister when he wrote to the premier of Newfoundland and said:

We will remove non-renewable natural resources revenue from the equalization formula to encourage the development of economic growth in the non-renewable resources sectors across Canada. The Conservative Government of Canada will ensure that no province is adversely affected from changes to the equalization formula.

He believed the Minister of Finance when he said, “We will respect the Atlantic accord”. He trusted that the hon. member for St. John's East knew what he was talking about when he said, “The Atlantic Accord will not be adjusted. It's written in stone. It's signed, sealed, delivered, and it's something that the province need not have any fear”.

Despite the claim by the foreign affairs minister, the member for Central Nova, that no member of his caucus would be removed for voting against the budget, the hon. member for Cumberland—Colchester—Musquodoboit Valley sits as an independent for voting his conscience and voting to defend the interests of his constituents.

Over and over again the government and the Prime Minister have pledged to defend the economic interests of Atlantic Canada. They said it to get elected. They said it to prepare for an election. When it came time to govern, Atlantic Canada simply has not fit into their plans.

New Brunswick has a right to be treated with equality. Atlantic Canada has that same ambition. Canadians want all of us to treat each other with respect, dignity and equality.

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, my colleague is an experienced member of the House. It is not his first time around the block. He will recognize that there are certain government bills which require members, by tradition, to vote with one's party, the Speech from the Throne being one of them and the budget being another.

Exceptions can be made. Has the member ever heard of a case where a government has made an exception, where a senior minister of government has stood in the House and said that its members could vote their conscience and would not be kicked out of their caucus if they voted against a bill?

Has he ever heard a minister make that promise in the House of Commons? Has a member of his party followed his or her conscience, voted in the interests of that member's constituents, and been kicked out of caucus?

[Paul Zed, Liberal, Saint John, NB]

Mr. Speaker, I must say that the member is a very experienced member, and he too well knows that it would be beyond possibility to think that a member of the governing party's cabinet would have ever made such a statement as the member for Central Nova made and then have the complete opposite effect occur.

I am, like a lot of Canadians and like a lot of members of this House, frankly shocked at such a betrayal, shocked at such a treachery that could possibly have occurred, and frankly I think it does this place a weakness when our words are not honoured, the way the member for Central Nova spoke about his own colleague.

[James Rajotte, Conservative, Edmonton—Leduc, AB]

Mr. Speaker, I want to pose two substantive questions to the member opposite.

First, the O'Brien panel was appointed by his government, by the former government. The former deputy minister from Alberta Al O'Brien chaired this panel. Does he and does the Liberal Party accept, or does the Liberal Party reject, the recommendations of the O'Brien panel? That is the first question.

The second question is with respect to fiscal capacities of provinces. Without naming any province, we could have a situation in the future with the equalization system. Does he believe that taxpayers in one province with a lower fiscal capacity than another province should be paying into equalization, while those people in another province are receiving equalization even though their fiscal capacity is higher?

On those two substantive questions, could he just indicate where he stands and where the Liberal Party stands?

[Paul Zed, Liberal, Saint John, NB]

Mr. Speaker, the hon. member will know that in the speech that I just gave, I specifically cited his own province from 1957, 50 years ago, when it was allowed above the cap under equalization.

What is really important for all Canadians to understand is that we believe in Atlantic Canada and in these reinvestments, the Atlantic accord, the people-building New Brunswick document, which were going to reinvest in the province of New Brunswick $800 million.

The member for Fredericton had crafted a document with the previous Liberal government and had a document ready that would be part of helping out a province like New Brunswick which, moving forward into the 21st century, wants to say that it does not want to be taking the same draw on the national treasury for equalization. It believes in self-sufficiency, just exactly like the national government helped out the province of Alberta 50 years ago.

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, I represent the flat earth party and we have a position on this.

I am pleased today to debate this issue and I will focus most of my remarks on the Atlantic accord aspect of the debate today.

I want to address the comments made by the very distinguished member for Edmonton—Leduc who tried to provide the perspective perhaps from Alberta. However, the part of the debate that I am focused on is not whether equalization is right or wrong or what is best for this province or that province. My focus is on the fact that I think the Government of Canada should honour a signed contract.

I believe that when the Government of Canada signs a contract this should be gold-plated. It should be bulletproof. When the Government of Canada signs its name, with the little red flag, on a piece of paper, whether it is a person in Tokyo, in Moscow, in Halifax or in St. John's, Newfoundland, the person should be able to count on that signature as being solid gold.

The contract we are talking about today, the one that has been amended so much in the budget, Bill C-52, was only signed in 2005. It is a 14-year contract signed by the Government of Canada and the Province of Nova Scotia. We are only two years into the contract and the government has decided it does not like it. Consequently, the government has put 12 amendments in the budget. I want the members opposite to notice, because what they say is not accurate, but under consequential amendments there are 12 paragraphs of amendments to the Atlantic accord.

If we go further, there are six paragraphs of amendments to the offshore revenue agreement that John Hamm signed two years ago in 2005. The government is now taking the contract signed by the Government of Nova Scotia and the Government of Canada and amending it with six fundamental changes to the contract. This is simply right or wrong and I think every Canadian has an interest in this. This is not just in the interest of Nova Scotia or Newfoundland. Every member of Parliament in this House should insist that if the Government of Canada signs a document, no matter if it is a Liberal government, a Conservative government, an NDP government or, heaven forbid, a Bloc government, the Government of Canada should honour the contract, no matter what, for the life of the contract. It is not flexible and it is not amendable. I honestly think the member for Edmonton—Leduc would agree with that.

I was just given a news article containing a comment by the Prime Minister at the G-8 a few minutes ago. He commented about my voting against the budget. He talks about how good the budget is.

I do want to say that it is a good budget and it is good for my riding. Many things in the budget do support and help my rural riding. However, that does not give the government permission to break a contract. Just because the government does some good things, it does not give it permission to break a contract. My opposition to the budget and the reason I voted against it was that I am 100% convinced that the budget does break this contract.

The Prime Minister said that the budget actually gives the Province of Nova Scotia $95 million in equalization over and above the Atlantic accord, but that is not right. He also said: .

That's one of the reasons Mr. Casey voted four times for the budget so obviously I don't think much of him changing his view the fifth time.

In all fairness, he knows better than anybody that we met with him and with the Minister of Finance over and over again. We put proposals on the table and got legal opinions. We raised it in caucus and we raised it in the House. We have done everything we can.

A week ago yesterday I realized that we were not making any headway. I wrote to the Prime Minister and put it right in his hand and said, “We're not making any headway with this by working behind the scenes. I am going to start speaking out publicly”. He took exception to that. I said, “We have to put pressure on it to make it move ahead”. I gave it to him in writing. I did not want to broadside him. I waited two days and then I made my first statement. Again, we made no progress.

On Monday morning, I wrote the Prime Minister a letter and said, “I cannot support this bill because it breaks a contract between the Government of Canada and the Government of Nova Scotia and I will not vote for it”. I made it very clear. I said it in two places in the letter.

The Prime Minister knows exactly why I voted for the budget the first time. We were in negotiations trying to find a solution but they went absolutely nowhere.

The Prime Minister says that Nova Scotia will get $95 million more in equalization, but that is not true. If the Atlantic accord were honoured, it would get the $95 million, plus the benefits of the offset that are not included in this. That is the fundamental part of the problem.

We believe the Atlantic accord could be changed with four or five words. The problem is that the budget and the accord have different wording. I have pointed this out to the Prime Minister and the finance minister several times. The accord says that the calculation of the payment will be based on the equalization formula that exists at the time. Any time the Government of Nova Scotia wants to calculate its offset payment, it would use the equalization formula that exists at the time.

Now, if we change it in 2010, it is that formula. If we change it in 2015, it is that formula. If we change it in 2019, it is that formula. That is what the accord says, which is a signed agreement and agreed to by both sides.

However, if we go to page 115 in the budget, it says that from now on it will be based on the previous formula. Instead of the vision of the accord, which is to follow along as the equalization formula evolves and changes, the budget locks it in at the previous formula. It, therefore, amends and changes the Atlantic accord fundamentally.

I asked the Minister of Finance today if he would stop saying that Nova Scotia has the option of the new formula or the old Atlantic accord, because it does not. He said it a thousand times. Many of the ministers have. I said it myself, because I believed it, until I got into this. However, it is not true. The Province of Nova Scotia and the Province of Newfoundland and Labrador do not have the option of the new formula or the old Atlantic accord. Everybody in this House has heard the Minister of Finance say that a dozen times. It is not true because the budget changes both Atlantic accord agreements. Twelve paragraphs in the accord are changed and amended and six paragraphs on the John Hamm agreement that was negotiated in 2005.

If the government wants to be honest and accurate, it should say that the Province of Nova Scotia has the choice of the new formula or an amended Atlantic accord, but that it does not have access to the old Atlantic accord.

I had hoped the minister would take my advice and be accurate and say that if that is the case. When I asked that question, he pointed out that I said that the budget was good. I did say the budget was good and that it was good for my riding but it does not give anybody the right to break a contract. We all sign contracts and we all honour them. All Canadians honour contracts. The Government of Canada should honour its contracts, no matter who signs them, whether it is the Liberals, the Conservatives, the NDP or whichever party is the government at the time. I feel very strongly about that.

I will go back to this nine paragraph agreement called the Atlantic accord. It was signed and agreed to by John Hamm and the very distinguished minister of fisheries and oceans at the time, the member from Halifax. It is a simple agreement but a very meaningful one to Nova Scotia.

Newfoundland and Labrador has a similar agreement and it means the world to Newfoundland and Labrador, as it does to Nova Scotia.

The member for Edmonton—Leduc took exception to the agreement but every province has exceptions and every province has special deals. This is our special deal and we value it tremendously.

We just signed an agreement with British Columbia to give it hundreds of millions of dollars for the Pacific Gateway. Manitoba did not get a Pacific Gateway fund, neither did Ontario nor did Digby.

Nova Scotia's special deal is the Atlantic accord and we are not flexible on it. We will continue to demand the Atlantic accord. It is only nine paragraphs long but it is a work of art. I did not realize how good it was until we got into this debate and I started to study it. It is really neat. I was moved to call John Hamm, the former premier of the province, because it is magic. I sold cars for 20 years and made a lot of deals but I could not make a deal as good as this one. It is an excellent deal and John Hamm deserves the credit.

John Hamm also agrees that this budget changes the purpose, the intent and the spirit of this agreement. I have great faith in John Hamm and his comments on it. He has helped me a great deal through this as I have learned to understand how it all evolved and how it came to be.

I am again asking the government to not only honour this signed contract, but to honour every contract. When the Government of Canada signed that contract it should have been gold-plated and recognized around the world as Canada.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I want to thank and congratulate my hon. colleague from Cumberland—Colchester—Musquodoboit Valley for his comments today and for taking part in this debate. I also thank him for his decision this week to vote against the budget, which was a very courageous move. Nova Scotians are very proud of the actions he has taken. I just wish the other Conservative members from Nova Scotia would show the same kind of intestinal fortitude.

I know the member has been carrying around for weeks a copy of the offshore accord and he referred to it at some length in his recent comments. I know he is aware that it talks about the fact that it is to apply to the equalization formula as it exists at the time. It seems to me, as I have heard comments from Conservative members today, that there has been a failure to comprehend that, a failure to comprehend what the accord is actually all about and what it means. The fact that no matter how equalization might change in the future, the accord and its provisions and the payments under it were to apply so that there would not be a clawback of offshore resource royalties from Nova Scotia or Newfoundland and Labrador.

I think there has been a failure to understand that on the other side but it is time they did. It is time that they lived up to this signed agreement. The member is absolutely right when he says that when the Government of Canada signs a contract it should live up to it. I signed that contract on behalf of the Government of Canada, as he has pointed out to me a few times, and it is time for the government to live up to it.

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, I want to address one thing the member mentioned about the other members of the Conservative Party, with whom I formerly sat just a few days ago. The Prime Minister said in his note that I had voted for it four times before I voted against it. I just want to say that I worked hard to discuss it in caucus. I and many other members of the Conservative caucus met with ministers and with the Prime Minister. We all did the best we could.

I made an independent decision that we were not making any headway a week ago. I notified the Prime Minister that I felt we were not making headway and then I notified him on Monday that, as far as I was concerned, this was dead and that we were moving ahead. Some of the members think they can affect this decision more by staying in caucus and I respect that decision. I just made my decision to stand and vote against the budget because the contract is broken and I cannot live with that.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I appreciate the opportunity to ask the member for Cumberland—Colchester—Musquodoboit Valley a brief question. I want to say that I appreciate that the member for Halifax West has asked the question because I think he would be the first to be willing to acknowledge that he was not totally persuaded at the front end that this was doable.

When we sat together with John Hamm, the premier of Nova Scotia at the time, he expressed some reservations quite openly. What we saw is that the more people did get their head around what it really meant for Nova Scotia, then none of us was prepared to take no for an answer if working across party lines and across jurisdictional lines we could actually get the Atlantic accord into an agreement that would be honoured by the Government of Canada.

The member for Cumberland—Colchester—Musquodoboit Valley is quite right to suggest that maybe we should now be calling it the “triple-A agreement”, the amended Atlantic accord.

My question arises out of the response that was very clear from Nova Scotians yesterday to the gutsy stand that the member took in saying that he could simply not live with the broken commitment. There was an actual accord that needed to be honoured and he could not live with any other outcome.

I was also struck by the fact that Premier Rodney MacDonald made it very clear in his commentary to the media, and I have no reason to think it is not accurate reporting because I read it again and again, that he also acknowledges that this is a broken promise, that it is not fixed and that there is no offer on the table to fix it. I want to know whether the member has any advice for the rest of us on how we can work together to support the current premier in trying to get this fixed and what efforts he has made and to what effect.

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, this is not complicated. This is not about policy where we can weigh the pros and cons of it to determine whether it a good or bad policy. This is right and wrong.

It is a 14 year contract was signed. We were only into it for two years. The government has decided it wants to change the contract without the permission of the Nova Scotia government. The government has 18 paragraphs of amendments in the budget, which unilaterally change this agreement. I think that not only we in the House but every Canadian should say that we want every contract signed by the Government of Canada to be honoured 100%.

This is not just Nova Scotia, Newfoundland and Labrador, it is our reputation as a country. It is important that people around the world know when the Government of Canada signs a contract, it is bullet proof, they can depend on it. It is important that it is bullet proof, solid gold.

This contract is being broken and there is no reason for it.

[Peter MacKay, Conservative, Minister of Foreign Affairs and Minister of the Atlantic Canada Opportunities Agency]

Mr. Speaker, I am very pleased to have an opportunity to participate in this debate. I have listened carefully to remarks today, many of which were aimed at me. That is the slings and arrows of this place, Mr. Speaker, as you know full well having served here for so many years.

I did find myself curiously agreeing with some of the comments by my colleague from Halifax, though. She quite rightly pointed out, when she asked a question a moment ago, that the member for Halifax West could be described as somewhat of a recent convert of the Atlantic accord. During the time he filled the post as minister for Nova Scotia, the post I currently hold, he was pushing the province of Nova Scotia to accept a deal that was not in the best interest of my province.

I remember at the time the member from Halifax said, “If Nova Scotians were as wealthy as Ontarians in eight years time I don't believe they would be expected to keep getting equalization”. He said this on October 26. This was in advance of the Atlantic accord being signed. He also urged the minister of energy at the time, Cecil Clarke, to accept the deal, that it was an excellent deal for Nova Scotia. Yet the numbers now clearly show that at the time the offer that was put forward by the member from Halifax was for $640 million. We know the final deal that was arrived at with Nova Scotia was for $830 million. Therefore, he was bargaining hard for his province, my province, to take hundreds of millions of dollars less than it actually achieved.

This is what he had to say at the time, “I can't imagine for the life of me why Nova Scotia would not accept a deal this rich”. In October 2004 he told the Halifax ChronicleHerald, “They're turning up their noses at an excellent offer. I really can't understand why they're not agreeing to it and why they're so hung up on this question of eight years”.

The member can be here today and sanctimoniously hold himself out as a champion of this cause, but at the end of the day he really had to be brought on side by the pushing and prodding of the premier of the day, John Hamm, as has been mentioned, who truly was the champion of the Atlantic accord, along with Cecil Clarke, the energy minister.

He and the member for LaSalle—Émard, the Liberal leader and prime minister at that time, and the member for West Nova all voted against the motion in the House recognizing the Atlantic accord, all recognizing at that time that Nova Scotia should be the primary beneficiary of offshore oil and gas revenues. That is what they did. On November 15, 2004, I was here as were you, Mr. Speaker. There was a motion before the House that you and I both supported. They voted against it. Every member in the Liberal Party who has spoken today, with the exception perhaps of the not so newly elected member, who was not here in 2004, voted against the Atlantic accord.

Therefore, I will not take any lessons or any sanctimonious, disingenuous, holding themselves out as champions.

This is really about, when we strip away the rhetorical flourish, when we take away some of the contrasting views of a contract and when we strip away the discussion of what this comes down to, it is about equalization for the country, an offshore oil and gas revenue deal that was put in place to insist that Nova Scotia and Newfoundland and Labrador in a similar vein receive primary benefits of their offshore oil and gas.

People have talked about special deals. This is not a special deal. This is the same sort of deal, others have mentioned this, historically in the context as Alberta enjoys with respect to their underground oil and gas. The Auto Pact could be singled out for the province of Ontario as something specific to it. Quebec has similar deals, one in fact that affects Newfoundland and Labrador, which is quite contentious. That is of course Churchill Falls.

Therefore, this is about ensuring fairness. That is exactly what we intend to do. The budget is exactly about that. Liberals have repeatedly refused in the past to recognize accords such as this.

The bill itself, when it finally came to fruition, when it finally came before the House, put in place a recognition of natural gas revenues that were to come to the province of Nova Scotia.

Fast forward to what we have in the budget. After 13 years of the Liberal government denying that there was fiscal imbalance in the country, our government immediately upon taking office, under the leadership of the Minister of Finance and the Prime Minister, went about consultation with the provinces to see that fiscal imbalance did exist. A lengthy, indepth and complex discussion took place about how we set the fiscal imbalance right.

I am a member from Nova Scotia. That is my home, that is where I was born and raised and that is where I will retire. I will always be there. The member opposite, who is also from my home province, can try to beat his chest, put on floppy shoes and a red hat and try to be clown, but that is not going to get him anywhere. People at home know this is a serious issue. If he wants to make it personal, that is fine, that is his right. He can continue in that vein.

We are here to talk about a serious issue. This is a serious issue that affects my province. It affects very much the well-being and the future of the province of Nova Scotia. That is why I have undertaken to continue in the same vein as the finance minister, to meet directly with the Premier of Nova Scotia, the premier who is now charged with protecting Nova Scotia's interests, as do I. I stand shoulder to shoulder with him in that exercise.

We met this morning and we have spoken in the past repeatedly, since the budget came down, about how we protect Nova Scotia's interests and how we do so together. That is exactly what we are doing.

This is very much about clarifying our commitment with respect to the Atlantic accord. This is about ensuring the implementation of the new O'Brien equalization formula, which is the option for which Nova Scotia has opted. This formula benefits my home province to the extent of $95 million more. That allows us to put more money into education, infrastructure, health, all sorts of important life altering and quality of life aspects. It has allowed Premier MacDonald and the provincial government make those investments.

With regard to some of the apocalyptical discussion here about how Nova Scotia was going to be forced into financial ruin, the budget provides Nova Scotia with $2.4 billion in the year 2007-08, $130 million in offshore accord offsets, $639 million in Canada health transfers, $277 million in Canada social transfers with respect to post-secondary education and child care and the list goes on. Millions of dollars are going into the Nova Scotia economy. All of that is buttressed with an additional $95 million that is coming from the federal government this year. That is what members opposite are voting against.

I should have indicated at the start, Mr. Speaker, that I will be splitting my time with the member for Edmonton—Spruce Grove, who is the Minister of Intergovernmental Affairs. She will be giving a riveting speech, as she has in the past, with respect to how the province of Alberta is very much in concert with the province of Nova Scotia on the recognition of offshore oil and gas revenues. She, as do all members of the Conservative caucus, wants to see that Nova Scotia is treated fairly. They want to know that we will be treated the same way in Atlantic Canada as the west was during the period in time it was developing its natural resources.

This is all about that. The offshore oil and gas revenue stream is protected, it is intact and it is whole. That is the intent and the spirit of what has taken place. That was the commitment that was given by the Prime Minister. He said that no province would be worse off after this equalization formula was in place. That is what he intends, and that will happen.

I want to acknowledge my colleague opposite, the member for Cumberland—Colchester—Musquodoboit Valley, who has been a long-serving member of this place, a hard-working member here in Ottawa and in his constituency. He is a well respected friend, and I say that with great earnest. I feel very badly for the position he finds himself in because he is sincere and pure of heart in what he believes he has done. What is unfortunate is he is not among us. He is not here now to continue these discussions on behalf of the government in dealing directly with the province of Nova Scotia.

Our colleagues from St. John's, our colleagues from New Brunswick, our colleagues from Newfoundland and Labrador, have been closely involved and work diligently to see that Atlantic Canada is treated fairly, that their provinces are treated fairly and that they receive a fair share of equalization and a fair share of offshore oil and gas revenue.

For the people of Nova Scotia, that is the critical issue. We can talk about caps and O'Brien formulas, and changes to the offshore and transfers. What they know and what they need to know is that, as a result of this budget, my province, the province of Nova Scotia, will receive $95 million more than it did last year.

That has allowed my home province to balance the budget this year and to move forward on other important projects. We will continue to work with it, as we did with ecotrust announcements, as we did with health arrangements, and as we continue to work toward an important infrastructure deal as regards to transportation and ports in the province of Nova Scotia.

I am committed to that. No one has to remind me of my obligations or responsibilities to the people of Central Nova and the people of Nova Scotia whom I represent. I am here every day working to the best of my ability, as I am at home when this place is not in session. These are in addition to my cabinet responsibilities.

The members opposite have their views on this. What I know is that I have been working in a very productive and positive way with the premier of Nova Scotia. He continues, of course, to stand up for and bring a very positive and patient attitude to this discussion, and to that extent, I want to thank--

[The Deputy Speaker, Bill Blaikie]

Questions and comments, the hon. member for Halifax West.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, the government that I was a part of, the previous government, made an agreement with Nova Scotia that was worth $1.1 billion in the first eight years, and more in the years after that, but it went beyond any previous promise in fact, and delivered $830 million of that up front to Nova Scotia.

The member voted against the budget that implemented that deal. He has said in the past that the budget respected the accord. These days, according to the Canadian Press, he is now saying he is working to ensure the accord is honoured. How is it possible that both are true?

Second, he said on May 15, in response to a question from the member for West Nova:

We will not throw a member out of caucus for voting his conscience. There will be no whipping, flipping, hiring or firing on budget votes as we saw [before].

Why was he misleading this House?

[Peter MacKay, Conservative, Central Nova, NS]

Mr. Speaker, what I would say to that is simply this. Why was the member opposite misleading the people of Nova Scotia by trying to represent that budget deal that was not a good deal, that would have cost our province hundreds of millions of dollars? He championed that cause. He repeatedly publicly urged our province to sign onto a deal that would have cost us hundreds of millions of dollars.

We know that he is voting against a budget that will give the province $95 million more, so he can talk about the past. He can talk about the future. What is happening here is that he is voting against the interests of the people of Nova Scotia. He in fact broke his word to the people of Nova Scotia when he tried to surreptitiously get them to sign onto a deal that would have cost them hundreds of millions of dollars. That is not good representation for the people of Halifax or the people of Nova Scotia.

With respect to the situation involving the member for Cumberland—Colchester—Musquodoboit Valley, I have already stated a number of times that this is very unfortunate. I certainly did not see that the member would decide this with time remaining, with time on the clock. We all know that the final budget vote will take place at some point next week. My preference is to never leave the ice until the game is over. There is a lot of time left on the clock. We are in the third period. There is no final vote on the budget until next week.

I am confident we are going to continue to work positively with the province of Nova Scotia to see that we honour those commitments, to see that the province of Nova Scotia is treated fairly, and I am confident that that is happening.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I do not disagree that there is still time on the clock to fix this, but that really does not answer the question as to why the member who has just spoken, the political minister from Nova Scotia, would say he feels very badly that the member for Cumberland—Colchester—Musquodoboit Valley left the ice with there being still time on the clock. He did not leave the ice. He was kicked out for standing up strongly behind the accord.

The Atlantic accord anticipated precisely the situation in which we might find ourselves today, and that is precisely why the accord explicitly says in clause 4 that Nova Scotia does not have to choose. The accord says that Nova Scotia gets the full accord benefits whatever equalization is in place at the time, but what that does not take into account is that what was promised has actually been broken.

The accord has been broken, and so no matter how many times the government says Nova Scotia is going to get more benefits, the issue is not whether there are going to be more benefits, the issue is whether Nova Scotia is going to end up being forced to make a choice where it would in part forfeit benefits that were promised. There was never any understanding that the government would end up forcing Nova Scotia into making this choice.

[Peter MacKay, Conservative, Central Nova, NS]

Mr. Speaker, I would disagree with the member on a number of points. First, I would disagree that Nova Scotians would not want more money. That in fact, given the choice to receive $95 million more, they would say “yes, we would prefer to have the $95 million more”.

We know that there would be more money in fact again next year. That is also an option. There is flexibility here and there has been a choice offered. The province of Nova Scotia chose to take more money, which is a wise choice, I would submit.

With respect to the member's comments about equalization and how in fact the province of Nova Scotia will benefit, it is clear the province will benefit. It is clear that our province, sadly a have-not province, is in need of the fiscal support that it receives from Ottawa.

There has been a lot of glossing over of fact here, trying to suggest somehow that Nova Scotia was going to come out at the short end of the stick, that it was going to receive less.

I have not heard a single member from any opposition party take issue with the fact that the province is getting more money. That is what it boils down to. That is, by the way, what equalization is meant to do. It is meant to recognize the circumstances that exist in regions such as ours. It is meant to give people in Nova Scotia an opportunity to stay and work, and be in their communities and towns and cities, rather than have to take the option to go out west to work.

I hope to see the day when the trend is reversed and Nova Scotians and Atlantic Canadians are coming home in droves because there will be jobs there. That is what our government intends to do. We intend to work toward that day when we will see the jobs, opportunities, and prosperity available in our province of Nova Scotia as it is elsewhere in Canada.

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

Mr. Speaker, I would like to commend the Minister of Foreign Affairs and my colleague for Central Nova for the passion that he has shown in cabinet and in this House for his constituents of Central Nova and also for the people of Nova Scotia. In fact, many times in cabinet he speaks for all Atlantic Canadians. I want to commend him for his commitment and his passion. It is a pleasure for me to participate in this debate today.

When our government assumed its role, it made a commitment to promote open federalism. In our 2007 budget, we kept this promise and announced a long-term plan to restore fiscal balance within the federation. Our plan responds to the concerns of all Canadians, the provinces and the territories.

I would like to take a moment to note just how far we have come in 16 months. This government inherited an equalization program that was divorced from principle. It also did not suit the demands of the day and our federation. It was obvious that federalism was not functioning as it should.

The previous Liberal administration did not even give a thought to tomorrow or to the future of the provinces. The approach that it used was stagnant and unresponsive to the changing needs of Canadians and to the changing needs of the provinces. What we saw with the previous Liberal governments for years was what we call “chequebook federalism”.

That is when the concept of open federalism was born. Under this concept, the federation is no longer an inactive entity, but an evolving institution that has to adapt to the changes and impacts of the modern world.

This government has already taken tangible measures to ensure, for example, that Quebec has the tools that it needs to develop within a united Canada, the recognition that the Québécois form a nation within a united Canada and the restoration of the fiscal balance.

Of course, the historic presence of Quebec at the Canadian delegation to UNESCO is a concrete example of that commitment. Open federalism demands that we recognize the maturation and the evolution of the provinces within our federation.

This concept recognizes the important and precise role the provinces must play in developing national policy.

It was clearly a time for a new approach to federalism, one that we believe could accomplish, among other things, ensuring a return to a principled based approach to federal fiscal transfers and recognizing, of course, the evolving nature of the federation. We believe in the need to capitalize on the strengths the provinces have to the benefit of all of Canada.

It was with great pride that I watched the Finance Minister deliver his budget in the House last March. Budget 2007, of course, was described as a historic agreement and with very good reason. I am particularly proud to note that our approach to open federalism and restoring fiscal balance is the result of significant consultations with all of the provinces and territories, as we committed to last year in our budget 2006.

It was in the spirit of open federalism that we worked with every province and territory, and we sought their views on ways to help achieve a balance between a principled based approach to the limitation of our spending powers and the need to ensure flexibility in our country. We sought their perspectives on lessons learned from the past, options for future consideration, and potential priority areas for action for the future.

However, we have to be clear about where we were when our government came to power. Canada was in a situation where the Liberal approach to equalization created, as we know, division between the federal and provincial governments, and between the provinces, particularly between different regions of our country. We saw this clearly in the inability of the Council of the Federation to come to any sort of consistent position on equalization.

We have shown the provinces and territories our commitment toward the new open federalism.

We provided an opportunity to provinces and territories to share their views on ways to achieve enhanced accountability. We committed to returning the equalization program to a principled based, formula driven plan to restore the fiscal balance.

The equalization formula, as we know, was thoroughly studied by an independent expert panel that was chaired by Al O'Brien, in fact a former Alberta deputy treasurer.

The O'Brien report proposed a comprehensive principled based set of reforms to the equalization program. We reviewed this report and we consulted extensively with Canadians and with provincial governments. We concluded that the O'Brien report formed a solid foundation for the renewal of the equalization program.

As we know, in our budget 2007, we finally tackled the longstanding irritant of provinces called double equalization by committing finally to a principled move to per capita health and social transfers. With this move we clearly demonstrate a principle that the equalization formula itself is meant to address interprovincial and interregional disparities, while other federal transfers, like health and social transfers, should ensure equal treatment of Canadians in all parts of our country. We also advanced the principles of transparency and accountability.

As we know, the provinces have responsibilities and ultimate accountability in their own fields and in their own areas of jurisdiction, while the federal government offers clear and predictable support to them. By providing equitable and predictable funding for shared priorities and attempting to clarify the roles and responsibilities in our federation, we have offered a solid, principled based approach on which government can continue to work into the future.

This commitment was a reassertion of the benefits that can be found in a flexible federation that, of course, allows our diversity to serve as a source, both of strength and innovation, a reassertion of the need for an open, honest and respectful relationship with the provinces, and a reassertion that true collaboration can really only take place when resources and accountability are matched with responsibility.

As I mentioned earlier, our second major policy goal for our approach to open federalism is to identify and facilitate opportunities for provinces to play a greater role in our own jurisdiction, the federal jurisdiction, when our moves and actions actually impact on provincial jurisdiction.

In our opinion, the provinces have various means available to them to play a more active role on the national and international stage for the good of the federation.

We believe that by identifying strategic opportunities to work with the provinces, seizing these opportunities, and responding with a readiness to work collaboratively will benefit the entire country.

Of course, now the question, both for the provinces and for the federal government, is which opportunities and when. We have already started to capitalize on those.

We committed in our 2006 election platform to find those kinds of practical ways to facilitate provincial involvement in areas of federal jurisdiction when provincial jurisdiction is affected, and the Quebec participation at UNESCO is a perfect example.

When we wrote that policy, what we had in mind is this kind of identification of clear, practical opportunities like that where the federal government could work with the provinces in areas of mutual interest.

I will conclude my remarks proudly stating that we continue to live by those principles.

We have respected our commitments and kept our promises in a transparent manner that is inspired by principles. By doing so, we have consolidated our federation in such a way that all the governments are working together in order to build an even stronger Canada.

[The Deputy Speaker, Bill Blaikie]

Before I proceed to questions and comments following the speech by the hon. member, it is my duty, pursuant to Standing Order 38, to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Gatineau, Official Languages.

Questions and comments, the hon. member for Ottawa South.