House of Commons Hansard #166 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was scotia.

Topics

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

10:20 a.m.

An hon. member

Saskatchewan too.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

10:20 a.m.

Liberal

Todd Russell Liberal Labrador, NL

Saskatchewan is in there as well, as I am reminded by my colleagues.

It did not take them too many days to break that promise and to really shaft the people of our province. We are hard-working people in Newfoundland and Labrador, as they are in Nova Scotia and across the country. We believe in electing politicians who are going to stand up for their people and follow through on their word.

What they have done is basically turn their backs on the people of Newfoundland and Labrador, Nova Scotia and Saskatchewan. They have perpetuated a fraud on the people, and I believe this not only when it comes to the Atlantic accords but on the other issues that I have enunciated here today. I believe there are members in the House who could come up with their own examples of how the Conservatives have perpetuated a fraud not only on Atlantic Canada but on all Canadians.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

10:25 a.m.

Regina—Lumsden—Lake Centre Saskatchewan

Conservative

Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform

Mr. Speaker, I am sure we are going to have a wonderful conversation throughout the intervening hours between now and adjournment, but I have a question for the hon. member. Why in the world would he be speaking as he has this morning when in fact his own leader has contradicted the very things that he is advocating?

In March of this year, the leader of the official opposition was asked whether he believes in excluding 100% of non-renewable natural resources from the equalization formula. The opposition leader said unequivocally: “No. No. I would not commit to this”.

How on the one hand can the member stand in this place and say that there is betrayal from the Conservatives when in fact his own party leader has stated that he would not agree to excluding non-renewable natural resources from the equalization formula, which would devastate the member's home province? Has he had a conversation with his leader about that? Does he care to comment on his leader's comments?

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

10:25 a.m.

Liberal

Todd Russell Liberal Labrador, NL

Mr. Speaker, the word hypocritical comes to mind when I hear certain comments from the hon. member opposite.

We have a leader who, when he gives a commitment, will honour that commitment. We have a leader who has integrity. For the hon. member to get up and defend the broken promise of his leader, the Prime Minister, is unconscionable.

That is bad enough, but I find it so disappointing today that I do not hear a voice from the Atlantic Conservative caucus members. I do not hear that voice of response. I do not hear that voice of Atlantic Conservative caucus members and I do not see them standing up for their particular province. I find that disappointing.

I would say to the hon. member that there is another vote coming. He can tell his Prime Minister to do the right thing for Saskatchewan, where the hon. member is from, and for Atlantic Canada, and he can tell all those members from Atlantic Canada to vote against the budget. It is a bad deal for Atlantic Canada, a bad deal for Saskatchewan, and a bad deal for Canada.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

10:25 a.m.

Saint-Laurent—Cartierville Québec

Liberal

Stéphane Dion LiberalLeader of the Opposition

Mr. Speaker, over the past years Atlantic Canadians have listened to the Prime Minister and many members of his government routinely promise to honour the Atlantic accords. In fact, they heard very specific promises, as my colleague, the member for Labrador, just explained to the House, like this one from a Conservative Party mailout, which stated in 2004:

The Conservative Party of Canada believes that offshore oil and gas revenues are the key to real economic growth in Atlantic Canada. That's why we would leave you with 100 per cent of your oil and gas revenues. No small print, no excuses, no caps.

Or there is this one from the Prime Minister himself, who stated in the House on October 26, 2004, that when it comes to the Atlantic accords, there is “a moral obligation to keep these promises: no caps, no clawbacks, no limitations, no conditions, no big exceptions in the fine print”.

Yet budget 2007 had just that: a cap, fine print, limitations, and conditions. Call it what we want, it boils down to one thing, a broken promise to Atlantic Canadians. Yes, the budget allows various options for provinces, but these are only designed to cover up the reality. The budget put in place exactly what the Conservatives promised not to do, a cap, and Atlantic Canadians know it.

The people of Saskatchewan heard very similar explicit promises. The Prime Minister even wrote a letter to Premier Calvert on June 10, 2004, stating unequivocally that 100% of natural resources would be excluded, no ifs, ands or buts, and no mention of a cap, another obvious broken promise.

The Conservatives' platform in the last election promised that they “would ensure that non-renewable natural resources revenue is removed from the equalization formula”. Those who voted for the Conservatives in Saskatchewan and Atlantic Canada put their trust in that commitment. That trust was broken.

As is typical of the government, it is now trying to deceive Canadians by throwing up smokescreens. Even yesterday the finance minister talked about the promise being fulfilled because the provinces have options. They can choose the old formula or they can choose the new formula with 50% exclusion, but what they cannot choose is what they were explicitly promised, 100% exclusion, the honouring of the Atlantic accords, with no caps.

Canadians know that the Prime Minister and the government broke their word on equalization and the Atlantic accords. Premier Calvert, Premier MacDonald and Premier Williams know it, and even Conservative members of Parliament know it, but only one had the courage to stand up in the House and do something about it: the member for Cumberland—Colchester—Musquodoboit Valley. I am proud to call this member my colleague.

All other Conservative government members should be ashamed of voting for this broken promise, particularly those members from Newfoundland and Labrador, Nova Scotia and Saskatchewan.

The time has come for the government to come clean. It broke its word. There is a phrase that I believe the government and the Prime Minister need to learn. It is, “I am sorry”. In Canada if one is unable to say, “I am sorry”, there is another way to say it. It is, “Je suis désolé”.

The relationship between the federal government and its provincial partners is one built on trust, yet the Prime Minister is eroding that trust, and the relationship is suffering as a result. Former Progressive Conservative minister John Crosbie put it well when he said that the Prime Minister is setting “a poor example for future public policy-making within the Canadian federation”.

What is the current Prime Minister doing as relations with the provinces deteriorate? Instead of fostering dialogue and talking about issues with his counterparts, he is cancelling first ministers' meetings. He has not held one single first ministers' conference since coming to power.

He is doing much the same thing with respect to the Senate. The Prime Minister can broadcast as much negative publicity about me as he wants concerning Senate reform, but that does not change the fact that he was the one who proposed this reform without consulting the people whom the Constitution requires him to consult. That move prompted the premiers to express their concerns about the Senate in writing. As a result, the Senate Standing Committee on Legal and Constitutional Affairs recommended that the Senate reform bill be referred to the Supreme Court.

Still, why should we expect anything else from a Prime Minister who shows so little respect for ordinary citizens? By breaking his promise not to tax income trusts, he violated the trust of Canadians and caused people to lose $25 billion of their hard-earned savings. He has never apologized for this. He has never said “I'm sorry”. He has never said “Je suis désolé”.

Broken promises, no consultations, no trust: that is no way to run a federation; that is no way to run a country.

Since entering politics, I have always kept my promises. My good faith has been put to the test many times, and it has always been above reproach. I was the Minister of Intergovernmental Affairs longer than any other Canadian since Confederation, and during that time, I was always open and honest with my counterparts. When I was the Minister of the Environment, environmental groups, industry and other governments found that they could trust me to do what I said I would do. That is how it should be done. One simply cannot reach one's goals without the trust of the people one works with.

The Prime Minister seems to spend all his energy trying to score cheap political points while getting away with the bare minimum and breaking his commitments to Canadians.

True leadership requires honesty and integrity. This is what I am. This is what the Liberal Party is offering Canadians.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

10:35 a.m.

Conservative

Ken Epp Conservative Edmonton—Sherwood Park, AB

Mr. Speaker, I thought of an analogy while I was sitting here listening to his speech. Let us say that when I was a younger man one of my kids who was in school at the time got this promise from me, his dad, “Son, if you get over 80% in that next physics exam, I'll give you $10”. Let us say that the son fulfilled that and when he came home, I gave him $20. Would he now be justified in saying, “Dad didn't keep his promise”? I do not think so.

A careful examination of the numbers shows that under the new plan from this government, the Atlantic provinces and Saskatchewan would get more than they did under the old one. How can they claim that this is a broken promise? It is just not an accurate statement.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

10:35 a.m.

Liberal

Stéphane Dion Liberal Saint-Laurent—Cartierville, QC

Mr. Speaker, first, Atlantic Canadians are not school children. Second, the Prime Minister was not under an obligation to make this promise. All his candidates were not under an obligation to repeat this promise. But they did so, and they broke it.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

10:35 a.m.

NDP

Peter Stoffer NDP Sackville—Eastern Shore, NS

Mr. Speaker, I would like to remind the hon. opposition leader that on June 28, 2005, a widow of a veteran from St. Peters, Cape Breton, named Joyce Carter, was given a written letter by the then opposition leader, now the Prime Minister, saying, on the veterans independence program, that if the Conservatives formed government, they would immediately extend the VIP to all widows and veterans regardless of time of death or application.

It is now 16 months later and that woman has written back to the Prime Minister, asking why he, and it starts with an l ends with d and two vowels in between, and I cannot say what she said in parliamentary language, but the reality is if the Prime Minister of the day can break a written promise to a widow of a veteran, then surely misleading an entire region and two provinces is just one rung further up the ladder of deception.

I would just like the opposition leader to clarify the fact that if the Conservatives could break their word to a widow of a veteran, then what is the big deal about breaking their promise to a province?

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

10:35 a.m.

Liberal

Stéphane Dion Liberal Saint-Laurent—Cartierville, QC

The fact is, Mr. Speaker, when the Prime Minister broke his promise to Joyce Carter, he broke his promise to all Canadians. The member for Labrador has that right. If he is doing it to him, he will do it to everyone. It is a bad example that the Prime Minister is giving to the country. One needs to have a relationship of trust with Canadians when one is the prime minister. This relationship of trust has been broken.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

10:35 a.m.

Regina—Lumsden—Lake Centre Saskatchewan

Conservative

Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform

Mr. Speaker, I would like to ask the leader of the official opposition to clarify some remarks that he made only a few short months ago to see whether he still maintains the position that he stated, without equivocation, on the Mike Duffy show with respect to a fiscal cap.

The leader of the official opposition stated quite clearly that he believed that a province that is receiving equalization payments should not then be in a position, after receiving those payments, where its fiscal capacity is higher than a province that does not receive payments. This is flying in the face, it appears, of what he is stating today.

We know the official opposition leader has some problems being consistent on his positions. He stated only a few months ago, in March, with respect to a fiscal cap that a province receiving equalization payments should not see its fiscal capacity exceed that of a province that in effect is paying into the program.

What is the position of the Leader of the Opposition?

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

10:40 a.m.

Liberal

Stéphane Dion Liberal Saint-Laurent—Cartierville, QC

First, Mr. Speaker, it is a matter of trust. That is the first point. If the point of my hon. colleague is to say, “Yes, I broke my promise, but you have broken your promise, too, so I have the right to break my promise because of that”, I would say that two wrongs do not make a right.

The fact is that I have never broken any promise. He is unable to mention one promise that I have broken. He cannot put me in a situation to have to honour the promises that he made.

That being said, what I said to the premier of Newfoundland, the premier of Saskatchewan and Canadians is: first, the Atlantic accord must be respected; second, I am against a cap; and third, I am consulting with all the premiers to figure out how we will try to solve the mess the Prime Minister has created.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

10:40 a.m.

St. John's South—Mount Pearl Newfoundland & Labrador

Conservative

Loyola Hearn ConservativeMinister of Fisheries and Oceans

Mr. Speaker, it is certainly a pleasure to speak to this motion today.

Usually when we stand to speak, we make some reference to the previous speaker. I will do that, but very briefly. I just listened to two things that the hon. Leader of the Opposition said.

He said that the Atlantic accord must be respected. I know he will have to run off as he is a busy person, but let me tell him that the Atlantic accord, in every aspect, will be respected. I do not know whether he heard me. I will say it again. The Atlantic accord will be respected.

He also said he is against the cap. Let me quote from the hon. member on two or three occasions. When asked just in March about excluding 100% of resource revenues from equalization, he said, “No, no, I would not commit to this”. He said:

--it would be ill-advised to grant such special treatment to Nova Scotia, Newfoundland or any other province...it is essential to maintain equitable treatment of all the provinces within--

He said, “Some provinces want special treatment to maintain their incoming benefits, even as their fiscal capacity increases. I disagree”. This is the Leader of the Opposition who just said he is against the cap.

He also said, “A province that receives equalization payments cannot see its fiscal capacity growing above the fiscal capacity of a province that does not”. What do we call it? We call it a cap, C-A-P.

I could go on. There are a number of other quotes and I only put that on the record to let people know how much they can rely on somebody who says he will give his word. It depends on the time, the place and the occasion, so we will dispense with that.

Let me talk about the issue at hand. Let us look at a little bit of history here. We have a situation where people opposite think that people on this side, the governing party, somehow or other are going to shaft the provinces of Newfoundland and Labrador and Nova Scotia.

They are hanging their hats today on the fact that, unfortunately, one of our members, a pretty good fellow and a good friend of mine, a great member, decided that he would not stay with the party and vote for the budget, that he would go across.

I say perhaps that if the gentleman had waited another few hours, if he had been privy to some of the results of some of the work that he and others of us have been doing, he would not have done that

However, the interesting thing about this is that the members opposite, strictly for political reasons as we know, but that is the name of the game and I am not saying we would not have done it had the opposite been true, are lauding the fact that somebody crossed the floor on principle.

Well, they had a member who voted for the budget, who voted against his party on principle, and he is now sitting as an independent, so that is what they think about people who stand on principle. That is the name of the political game also.

The interesting thing about it is that the premier of Newfoundland and Labrador is also joining with his newly found feathered friends on the other side and lauding the fact that somebody stood up on principle and walked across the floor.

The interesting thing about this is the comparison with what his colleague, his counterpart in Nova Scotia, is saying. The Nova Scotia premier was calling the member to say, “Please do not do it, because you cannot do any good for us over there. We are working out a deal--”, unlike Newfoundland, by the way, “--with the federal government that will take care of our concerns, or at least that is our hope. We believe we can do it by working collectively. Will you stay there and work with us to make sure we get the deal?” The member did not listen. He went across.

I find it a bit hard to understand when the premier of the province affected, in this case Nova Scotia, said “stick with it boys, and let's get a good deal”, and the premier of Newfoundland and Labrador said “run across the floor, give up, come home, we don't want a deal”. He might not want a deal, but the people of Newfoundland and Labrador want a good deal, and that is what they will get.

I will give the House a bit of history here. What is this all about? If the government had not recognized the fact that there was a fiscal imbalance in the country, then we would not be here today. This would not be an issue. We recognized that there was a fiscal imbalance. The past equalization program threw a few dollars at the provinces that made the loudest noise. As all of us know, that was not very successful.

The government started talking about addressing the fiscal imbalance. In order to do that, we needed a formula that everybody would accept and buy into and one in which everybody could participate.

Leading up to the last election, our party said in our blue book that if we formed government, we would be satisfied to take 100% of the non-renewable resources out of the formula. We are not denying that. It is there in black and white in our blue book and on web pages and so on.

We did not dump that when we were elected. In the election and after the election we said that we, as government, were willing to take 100% of all non-renewable resources, and not just oil and gas, out of the equalization formula.

The equalization formula affects 10 provinces and three territories. They are affected by whatever formula Ottawa puts in place. Consequently, they will decide if this is the best formula for them collectively. Of course, each province will ask if this is the best formula for it.

The premiers met on several occasions and the finance ministers met. They could not agree on the formula. The majority of them did not want what we offered in relation to taking out 100% of all non-renewable resources.

People at home are saying that the Prime Minister broke a promise. It was not the Prime Minister; it was the party and then the government. I am not denying that. We made a commitment. We were ready and willing to do that. We did not say to the provinces that we would not do that. The provinces had a whole year to put together a formula, including what we had committed, to address the fiscal imbalance of the country. The majority of the provinces said that it would make it worse for them rather than better. They said that they needed something else.

Back several months ago, the talk about equalization and fiscal imbalance centred around the O'Brien formula. The government of the day, Liberal members opposite, initiated an independent study by highly qualified people, chaired by Mr. O'Brien, who brought forth a formula to address equalization. That became the talk of the town. Everybody, including all the premiers, realized that was probably where they were headed and they started to scramble to get the best they could out of that formula. This is all on the record. I am not it making up.

The Premier of Newfoundland made a request to the Prime Minister that the Atlantic accord be protected. The two provinces, Nova Scotia and Newfoundland and Labrador, had different agreements. They were not special agreements. They were not fancy side deals. They had agreements with the Government of Canada that they had worked hard for, which recognized the fact that their offshore oil and gas resources were located offshore, outside the land mass, and were supposedly controlled and owned by Canada.

Agreements were put in place to have the resources recognized, basically, as if they were onshore, that the province would be the prime beneficiary, that it would get 100% of the revenues from the developments of the offshore oil and gas.

In 1985 the original agreement was signed with the then Conservative government of Canada after the former Trudeau Liberal government had denied it for years. The minister of energy, who in Newfoundland denied it and would not give it the control of our offshore oil and gas benefits, was the former leader of the Liberal Party, Mr. Chrétien. The prime minister was Mr. Trudeau.

When the Mulroney government was elected, that deal was signed. There is a picture on my wall, if anyone wants proof, of Prime Minister Mulroney with Minister Crosbie, the regional minister, Senator Pat Carney, who was the minister of energy at the time, along with Premier Peckford from Newfoundland and the then minister of energy, Mr. Marshall. Sitting in the background with myself and others was one of the members on the other side, who is clapping his hands for a great agreement for the Conservatives.

When we moved forward, in 2005 the Williams government, led by finance minister Sullivan, negotiated some improvements to the Atlantic accord. It sounded great when the premier came home, not really cheered then by the member for Bonavista—Gander—Grand Falls—Windsor.

The premier came down the escalator waving the cheque, and we all remember it, saying, “We got it, we got it, $2 billion”. Imagine coming into Newfoundland and Labrador with a $2 billion cheque. I would bet that members, if we did a quiz, and I would love to do a quiz, would say that the $2 billion is above and beyond, that it is great stuff.

What is was an advance on Newfoundland and Labrador's income. It is just like if you were making $20,000, Mr. Speaker, and I know you make a little more than that, not at all what you deserve for the job you are doing. I was watching the hockey game last night, as a lot of people were, and thinking about the referees. They work an hour a night, basically, and get paid a lot more than you. I think you would make a tremendous referee because a lot of them are not of physical stature to break up the rackets. With a pair of skates and a much bigger salary, you would do it.

If you, Mr. Speaker, were making $20,000 a year and somebody suddenly gave you a cheque for $200,000 and you came home waving it, everybody in the family would be delighted. However, what you did not tell them is that for the next 10 years all of your net income would go into the bank because you just got a $200,000 advance.

Newfoundland and Labrador received a $2 billion advance. That is all it got, nothing extra, nothing that did not belong to it, nothing above and beyond what it would get over time. Newfoundland and Labrador received it so it could pay down our the tremendous debt. The premier almost had a contest asking how people wanted it spent when he knew, because it is written in the agreement, it had to go toward the debt. It is all fun and games.

All of it has not been drawn down yet, but it will be over the next few years. There is still somewhere around $1 billion, or a bit less. Some people think that if anything happens such as caps the province will lose it and it will be clawed back. Absolutely not. Let me state it clearly and categorically that the advance money given to Nova Scotia and Newfoundland and Labrador, regardless of what happens, will not be clawed back.

Any payments the province get because of the Atlantic accords will not be capped. The accord will not be capped. The accord is protected. Write it down. Look at Hansard. Cut it out. Show it to me in five years. We will not know those things right away simply because the province is still receiving equalization money.

The unfortunate thing about it is it province is not receiving much. In our province, as we say at home, we are getting well off. We are starting to become a have province. I am proud of that. I think the members opposite are proud of that. However, as anybody knows, we cannot have our cake and eat it too. I do not think anybody is really asking for it, if they understood what this is all about. What we do not want is for something that we own, something that we were promised, something that we were given, to be taken away.

Let me assure the members it will not be taken away. How do I know that? Because I have been working on it. I have not been sitting, complaining. I have not been running around the country, yelling and screaming and complaining about Ottawa not doing anything, when I have not even asked it, when I have not met with it and when I have not negotiated. We do not get deals unless we negotiate.

This year our province is receiving $477 million in equalization. Next year we will receive only $197 million. It is not, if our economy keeps going, the year after that we will get nothing.

Why our equalization is going down is because our revenues from resource development, in particular, including the offshore oil and gas, have been going up. We have not lost any of the money. Anything we have lost in relation to the total revenues we would receive has been given to us by what we call offset payments, through the Atlantic accord, and people think this will end. It will only end when the accord fizzles out.

When the accord agreement was signed in 1985 to give us this money in lieu of clawback, in lieu of equalization losses, it was due to expire in 2011. Nobody has this by the way. It is not a bad deal and others would love to have it. The $2 billion upfront payment, which we could bring home and wave around, was an advance payment. We are not getting a cent directly from government these days in relation to offset payments. It is all kept because the government gave it to us in advance. When the advance is paid off, we will start getting real money again.

The other thing they did a couple of years ago, in 2005, is they negotiated one extra year on the length of the accord agreement. The accord now ends in 2012. What does that mean? That means that in 2012 that is it. Our province will not get any more of these offset payments, unless in one of the two previous years, 2010 or 2011, we are on equalization. If we are receiving equalization, the accord is extended until 2020. If it is, and I hope it is, we will continue to receive every benefit from that accord because we have committed, with no changes to the accord, no capping of the accord, despite what members say.

To finish, in relation to equalization, there is not a chance, according to economists, that we will be on equalization in either of these years to qualify for the accord payments, unless we go to the new formula. If we go to the new formula, because of the 10 provinces, we might then qualify. If our province does, the theory is we will be capped. The Atlantic accord will never be capped.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11 a.m.

Liberal

Todd Russell Liberal Labrador, NL

Mr. Speaker, I listened to my colleague's words very closely. What I sensed out of this was a “blame the premiers” approach, the premiers could not arrive at anything that would meet the commitments and promises that the Prime Minister and his party had made. He gave us a lecture of the deficiencies of the new accords that have been signed.

With regard to my province of Newfoundland and Labrador, he was absolutely right. When there was a cheque delivered for $2 billion, when there was an agreement signed between the Liberal government, under the then prime minister, the right hon. member for LaSalle—Émard, and Danny Williams, the people did cheer. However, when they saw the budget and when they saw what the Conservative Prime Minister, Stephen Harper, had delivered—

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11 a.m.

NDP

The Deputy Speaker NDP Bill Blaikie

The hon. member for Labrador should know by now that members do not mention the Prime Minister's name or anybody else's name in the course of debate. I would ask the hon. member not to do that.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11 a.m.

Liberal

Todd Russell Liberal Labrador, NL

Thank you, Mr. Speaker. What the Prime Minister delivered, the people jeered. They jeered their own. There are hundreds of thousands of people in our province who say that the Prime Minister has broken his word. There are hundreds of thousands of people in Nova Scotia who say that the Prime Minister has broken his word. There are hundreds of thousands of people in Atlantic Canada who say that the Prime Minister has broken his word.

What does the Minister of Fisheries and Oceans say to all of those people? Do people not know when someone's word has been broken, when a promise has not been kept? I say yes. We have to trust the people. They know when something has not been lived up to.

I would also ask, what is the government negotiating over there? If everything had been delivered in budget 2007, then what are the Conservatives negotiating? Why are they running around like chickens with their heads cut off trying to get a deal with the Minister of Finance and trying to meet with the Prime Minister? What are they trying to--

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11 a.m.

NDP

The Deputy Speaker NDP Bill Blaikie

Order, please. The hon. Minister of Fisheries and Oceans.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11 a.m.

Conservative

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

Mr. Speaker, let me answer the last question first about what we are negotiating.

People who are in the party, people who are part of it, people who can work within the system and people who know what they are doing and are willing to do it know what is going on. If I had gone across the floor, if I had gone home, I would not know what we were negotiating and I would be showing I did not care.

The budget put over $1.5 billion into Newfoundland and Labrador this year. The member voted against that. He voted against the budget. He said it is because of what it does to the Atlantic accord. I am telling him that it does nothing to the Atlantic accord that will take one cent away from the people of Newfoundland and Labrador. The member voted against it because it is the Liberal thing to do.

What the member also voted against in that budget, besides the possibility for pensioners to split income and what that means to the province, besides the money for education, he voted against the money for the Labrador highway, money that is in that budget that has already been committed. I committed it. That money will start a development, which the Liberals could not deliver in all the years they were in government, to pave the highway right across Labrador, $100 million, $50 million from the federal government in this budget. He voted against it.

How is the member going to explain that to his people?

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11:05 a.m.

NDP

Peter Stoffer NDP Sackville—Eastern Shore, NS

Mr. Speaker, the coincidence is that the foreign affairs minister said that he expects all Atlantic Conservative MPs to vote for the budget because the budget is good for Atlantic Canada. That is what he said.

We know what happened to the member for Cumberland—Colchester—Musquodoboit Valley. Only seconds before the vote, all kinds of people came up to him, the Minister of Foreign Affairs, the member from St. John's pointing at him and saying, “Look, we have a deal. We have something going on. Just vote for the budget”. In desperation they tried everything they could to keep him in the party. The fact is that the hon. member knew better.

The hon. Minister of Fisheries and Oceans said that they are working on a deal, that they are working on something. The fact is they had a deal two years ago. If the budget is so good for Atlantic Canada, why is there deal making going on now?

The reality is that if economists say that the accord was broken, if legal experts say that the accord was broken, if Conservative premiers say that the accord was broken, if a former minister responsible for Newfoundland and Labrador, John Crosbie, says that the accord is broken, if opposition parties say that the accord has been betrayed, why is it then that there is deal making going on after the budget?

Why is it that only that minister and the government cannot seem to see the forest for the trees? The Conservatives will simply not admit that they broke a promise to the good people of Newfoundland and Labrador and Nova Scotia. It is a shame for them to stand up in this House and try to defend the defenceless.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11:05 a.m.

Conservative

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

Mr. Speaker, I hesitate even to answer a question from somebody who has demonstrated clearly over the last few years that he knows absolutely nothing about what he is talking about. However, I will clarify a couple of things.

One is that I was not around before the vote to talk to anybody. I did not run up to the member for Cumberland—Colchester—Musquodoboit Valley and ask him to stay. I did not discuss the issue with him at all, period. I can say to the member that I know somebody who did talk to him. It was the premier of his province who called the member for Cumberland—Colchester—Musquodoboit Valley and asked him to stick with it, to make sure that Nova Scotia got the deal that we said we would deliver but for him to make sure he was there.

We have not tampered with anything. We promised the accord would not be touched. We said it would be preserved in its purity. We said it would not be capped. The member asked what we are negotiating. There is a brand new equalization formula, one that is predictable, one that is clear and transparent, one that treats every province properly. How does it relate to all provinces and what effect would it have on past agreements? That needs to be clearly pointed out and that is our job to do. It will be done. Let me again assure the member that it will not be done to the detriment of Nova Scotia or Newfoundland and Labrador.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11:05 a.m.

Liberal

Shawn Murphy Liberal Charlottetown, PE

Mr. Speaker, the debate today is about honour and promises. It is clear to everyone watching that the Prime Minister broke his promise to the people of Newfoundland and Labrador. He broke his promise to the people of Nova Scotia. He broke his promise to the people of Saskatchewan. He broke his promise to the people with income trusts.

However, there is another thing and that is the comments of the member for Central Nova. He won the leadership of the Progressive Conservative Party based on an agreement with Mr. David Orchard that he would not merge the party with the Alliance. Eight minutes after the agreement was signed, he started merger discussions.

In a question about voting against the budget, and I will quote from Hansard, he said:

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 with the Liberal government.

Eight minutes and thirty seconds after the member for Cumberland—Colchester—Musquodoboit Valley voted against the budget, he was kicked out of caucus and 784 confidential files were seized.

Does the member opposite condone the words and actions of the member for Central Nova? Does he associate himself with the actions of the member for Central Nova? Does he now in the House wish he were still a Progressive Conservative member so he could speak with honour and dignity?

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11:10 a.m.

Conservative

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

Mr. Speaker, let me say to the hon. member, I have been around politics for a long time. I entered provincial politics in 1982. I have been involved in politics since I could walk. There was not a campaign in my riding in which I did not participate, and I ran in 98% or so of them.

I have been around, so let me say to the hon. gentleman, ever since I have been involved in politics I have served under a number of leaders. I have served under two premiers, and I have served under two or three leaders here in Ottawa. At no time did any of them ever try to dictate to me what to say or what to do. I would like to think it was because of two reasons. One, they know I am a stubborn Irishman and two, they do not have to because I try to do what is right and principled. Never has anybody told me what to do or say in this or in any other place, except maybe at home.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11:10 a.m.

Bloc

Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, today we are debating a motion introduced by the Liberal Party that bears re-reading.

That, in the opinion of the House, the government has failed to live up to verbal and written commitments made to Premiers by the Prime Minister during the last election campaign with respect to the Equalization Program and the Atlantic Accords.

The Bloc Québécois will vote in favour of this motion, because it seems to us that the Prime Minister should have never made those commitments, which he failed to honour. He should have made sure that he would be able to live up to the commitments he was making to Canadians during the election campaign and on other occasions. Otherwise, he should not have made them or promised such things.

The text of the motion addresses only that particular issue. The solution that the government came up with, however, although not ideal, is nevertheless a step in the right direction. In that regard, we must put things in perspective. The Liberal Party can say that the government has failed to live up to verbal and written commitments made to premiers, because that is a fact. But, we must also look at the solution. The Bloc will vote in favour of the motion as it stands.

I would also like to talk about the underlying issue, about equalization. I would remind the House of a number of things. Equalization is fully funded by the federal government using tax money paid by Quebeckers and Canadians from across the country. This equalization program is the result of a fundamental commitment to ensure fairness. In a federation like Canada, equalization has a very specific goal, namely, to ensure that, from coast to coast to coast, Canadians have access to public services at reasonably comparable levels of taxation.

Several countries—most of them federations—have equalization programs. The method consists primarily of evaluating the fiscal capacity of the provinces to provide public services. Provinces with a lower capacity to fund comparable public services receive equalization payments, whereas the others receive none. Quebec receives a significant amount in equalization payments, a little more than 50%. However, on a per capita basis, it finds itself behind several other provinces. In this sense, it is not the spoiled child of the system.

The federal government's equalization payments to the provinces are unconditional and have no strings attached. Equalization does not take into account the expenditure needs of provinces and its sole purpose is to increase the fiscal capacity of the provinces to a common standard. There is no reduction in terms of equalization for provinces with fiscal capacity greater than the common standard.

This is not the first time that this situation has arisen. In June 2004, the former Liberal prime minister made election promises during the federal campaign. The Premier of Newfoundland got the prime minister to promise to let the Government of Newfoundland keep all its oil revenues with no reduction in amounts disbursed to the province under the equalization program.

This position was unacceptable to Quebec. However, the Liberal prime minister did not keep this promise. At the first ministers conference of October 26, Ottawa insisted that there be a cap and that amounts exceeding the cap would result in a reduction of equalization payments. The Conservatives went into action on October 26, when the current Prime Minister made a series of very formal commitments.

Recently, I was at the Standing Committee on Finance when the Premier of Saskatchewan testified. He showed in a very clear, precise way that those commitments were made at that time. In that sense, the motion that we are debating today is justified. However, within the framework of our discussions on this subject, it seems to us that the equalization formula set out in Budget 2007 is a step forward but it falls well short of the unanimous demands of Quebec. It contains some positive aspects. It is a formula founded on principles.

The new formula uses the real value of property taxes. The payments are calculated on the basis of the ten province standard, which pretty well puts an end to the notion of ceilings and floors, but nevertheless it does not meet Quebec’s demands.

What Quebec is demanding is, more or less, the following. It wants an adjustment of the equalization formula that will take into account the ten province standard, 100% of revenue from natural resources and the real value of property taxes. Why 100% of revenue from natural resources? Because, in the past, for example, Quebec developed its own hydroelectric resources without any significant support from the federal government while, in other sectors, other provinces received major financial assistance: Newfoundland, in particular, for the Hibernia project.

Therefore, we want to see 100% of revenue from natural resources included in the formula, so that in the final tally Quebec has a total envelope of more than $16 billion for 2007-08. The only formula that will enable equalization to achieve its objective involves providing receiving provinces with a per capita fiscal capacity equal to the Canadian average.

Quebec’s demands flow from the Séguin report that was published in 2001 and unanimously adopted by the Quebec National Assembly. At that time, the Séguin report proposed four measures for adjusting the equalization formula to make it acceptable to Quebec. That involved the conditions that I mentioned earlier, namely, adopting the ten province standard, including 100% of revenue from natural resources, using real property values in calculating that part of the tax base related to property taxes instead of the theoretical value now in force, and abolishing ceilings and floors in the equalization envelope.

The current government’s proposal to take account of 50% of revenue from development of natural resources seems to us a step in the right direction but it is not entirely what Quebec wants. It continues to advance its demand for the desired result, which is that 100% of revenue from development of natural resources be considered.

All these proposals in Quebec were developed over the years. They resulted not only from the Séguin report, but also from three main documents on equalization reform. In 2004, the Quebec finance department—the Government of Quebec—revised the Séguin report when it tabled the 2004 budget. The document entitled “Correcting Fiscal Imbalance” updates the report of the commission chaired by Mr. Séguin. This document set out Quebec's unanimous demands and estimated the shortfall at $2.8 billion for Quebec for 2004-05 and at $5 billion for Canada as a whole.

Following that report came the Council of the Federation's report in 2005 and, finally, the report of the Expert Panel on Equalization.

All these measures were aimed at recognizing that a fiscal imbalance existed, and it was the Bloc Québécois that raised the issue here in the House. Hon. members will recall that a few years ago, none of the political parties in this House were advocating recognition of a fiscal imbalance. The Bloc Québécois got to work and systematically obtained support from the parties here in the House, until this year's budget was tabled. The federal government has not corrected the fiscal imbalance per se, but it has come up with additional funding that finally corrects an unacceptable situation. The provinces had many needs, while the federal government had the money.

We backed our position on this issue with help from other people and the information and reports I mentioned earlier. But we brought the issue onto the federal political stage. In the end, we won a commitment from the Conservative government that it would pay attention to this issue and correct the fiscal imbalance.

But we find ourselves facing the same situation that the motion criticizes, which is that the fiscal imbalance has not been completely corrected. Admittedly, there was a significant cash component to the budget. This is why the Bloc Québécois decided to support this budget, and as a representative for Quebeckers, it still feels it was the right choice.

However, there is still a fiscal imbalance, and in the years to come we will remain dependent on economic vitality, revenues from the federal government, and the situation of the provinces. A permanent solution would be the transfer of tax points, tax transfers, which is currently not the case.

So the Bloc Québécois will continue to fight for a permanent solution to this current situation in which Quebec does not receive its per capita share compared to the other provinces. The debate on whether or not to take into account revenues from natural resources is an important one and will continue.

With the Liberal motion presented today, we can see that in a number of Canadian provinces, people who had received commitments, and who do not see those commitments in what was adopted, are frustrated. At the same time, it is clear that the discussion held to reach the solution set out in the budget is a step in the right direction.

Unfortunately, the Prime Minister should not have made these commitments if he was not certain he could live up to them. He has not lived up to them, or so the motion says and criticizes. The only thing to come out of all this so far was that the Bloc Québécois obtained significant amounts of money for Quebec through the federal budget. We hope to be able to continue in that vein. Nonetheless, our ultimate goal is truly to come to a solution that will no longer be subject to all the ups and downs that are often caused by election periods.

Earlier we looked at the background of the situation. In the past, the Liberal Party made commitments that it did not keep. The leader of the Conservative Party made commitments he still has not kept. Ultimately, the motion is on the credibility of politicians and the commitments they make.

In certain instances, the public is able to understand that something has to give. However, for formal commitments on basic issues such as these, it would have been better if the Prime Minister had not made such a commitment. He should have instead promised to work on finding a better solution. That is not the commitment he made to the provinces, which are particularly frustrated. There was also the commitment made to Quebec to do away with the fiscal imbalance. The solution is still not on the table. There is a monetary correction, but no final solutions. Quebeckers are still waiting for a solution to this issue. They will continue to take stock of the effectiveness of the hon. members and the parties in this House, namely on the issue of correcting the fiscal imbalance.

It is important to have a debate on this motion today because we are talking about the credibility of politicians. We have to be able to make the distinction between keeping a commitment and making proposals as a result of further analysis. In no way can we justify not keeping these formal commitments when there is no good explanation for it. The people in the provinces concerned get the impression they were hung out to dry because the Conservative Party did not keep its election promise.

That is a serious warning for the future. This is a minority government that could go to the polls at the drop of a hat. Political parties will continue to make promises. The lesson to be gained from this is that if we wish to maintain our credibility as politicians and political parties, we must not make promises that we cannot keep.

Can we be sure that they knew this when they made the promise? That is something we should spend more time considering. All the same, the promise should not have been made.

Recently, we have been talking about the marked decline in voter participation in the electoral process. Actions like these are damaging. What we are doing today is reminding the government of its responsibilities, and a timely reminder it is, too. However, this reminder is unrelated to the measure in the budget that is a step forward for Quebec.

I hope that the government will take careful note of the message to be found in the House's vote on this matter. I also hope that, starting now, we can count on the government to keep its promises. If ever it finds that it must change its position on a given measure, I hope that it will be able to justify its action and offer clarification so that the purely partisan tenor of the debate on this issue can be avoided.

In conclusion, the Bloc Québécois will support this motion because it believes that the government has indeed failed to keep its promises. However, the members of the Bloc Québécois still believe that the government's budget is a step in the right direction.

Although equalization and the measures in the budget are not quite up to Quebec's expectations, more time must be devoted to considering natural resource revenue.

In that respect, we will continue to support the budget. However, the government and the Prime Minister should take note of the reminder at the core of today's motion.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11:25 a.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I received an email from a colleague with regard to an editorial in the Halifax Chronicle Herald. One of the paragraphs struck me as being reflective of the problem that we are addressing today. It states:

It’s not that the general public understands the intricacies of the equalization regime or the offshore deals Ottawa made with Nova Scotia and Newfoundland and Labrador in 2005. But in their gut, folks do understand that the Harper government has broken faith with Atlantic Canada by failing to deliver all that had been promised.

When the media report on the issues of importance of the day and reach the conclusion that this is a broken promise, it is hard to understand how the government and the Minister of Fisheries and Oceans can get up with a straight face and say, “We didn't break the promise. We're in fact giving more money”.

It is so puzzling how the public and everyone has assessed this, and it is objectively determinable what the facts are, and yet a minister of the Crown comes into this place and says something totally different and somehow figures that if he says it often enough people might believe him.

There seems to be a very disturbing pattern of saying black is white. I could give many examples. Whether it be on income trusts, Kelowna or Kyoto, there are so many areas where the government seems to want to just say to people whatever it wants even though it is not fact based.

I wonder if the member has some concerns about the believability of the information that the government seems to be putting forward to the House on matters of importance to all Canadians.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11:30 a.m.

Bloc

Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, I thank my hon. colleague for his question. However, his comment might be better addressed to the Minister of Fisheries and Oceans.

In any case, the Bloc Québécois has decided to base its position on the essence of the issue. Let us take another look at the text of the motion.

That, in the opinion of the House, the government has failed to live up to verbal and written commitments made to Premiers by the Prime Minister during the last election campaign with respect to the Equalization Program and the Atlantic Accords.

There is no doubt that equalization is a complex concept. There is quite a history behind the evolution of this practice, this distribution of wealth. Above and beyond that, however, a commitment was made by the Prime Minister when he was a candidate for election. Basically, his mistake was making a commitment that he was unable to honour afterwards.

The fact is, people came to realize that the commitment was not necessarily realistic. For the Bloc Québécois, the ultimate solution needs to be even more advantageous than the Prime Minister's original commitments. Nevertheless, from a political standpoint, the commitment he made should have been honoured. Failing that, a satisfactory explanation should have been given.

At this time, we do not consider the explanation satisfactory and we see that, throughout all the provinces in question—I was particularly impressed by the testimony given by the Premier of Saskatchewan on this matter—utter frustration abounds. This frustration is due to the fact that the commitment should have been expressed differently. Perhaps he should not have gone so far and should have been less focused on vote-seeking. Ultimately, he should have honoured the commitments he made.

Opposition Motion--Equalization Program and Atlantic AccordsBusiness of SupplyGovernment Orders

11:30 a.m.

NDP

Peter Stoffer NDP Sackville—Eastern Shore, NS

Mr. Speaker, the broken promises just keep on coming. Today we have the hon. Minister of the Atlantic Canada Opportunities Agency in Halifax announcing the Conservatives' attempt at a shipbuilding policy, with financing called SFF. The reality is that their announcement comes absolutely nowhere near what the industry has been asking for.

The hon. member from Quebec knows very well that this particular industry is vital to Quebec, Atlantic Canada and the rest of the country. We know about the continually broken promises of the Conservatives on the Atlantic accord. We know about their continually broken promises to widows of veterans. But now they are actually about to break the back of the shipbuilding industry, which is so vital in this country.

Does the hon. member not notice a disturbing trend among these Conservatives, which is that when it comes to actually assisting the regions of our country they fail every single time?