Debates of June 7th, 2007

Opposition Motion--Equalization Program and Atlantic Accords

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

Mr. Speaker, as my hon. colleague points out, he and I have both worked on the issue of Bill C-45. We have been inundated with questions from all interests, environmental groups, aboriginal groups, fishing groups far and wide. They are wondering what the government is talking about when it refers to broad consultations. There was absolutely no or very little consultation. That is why we have vehemently argued against the Conservatives ramming through Bill C-45. Why do they recklessly continue to do this?

I am glad my hon. colleague pointed this out. Just the other day during debate at second reading our hon. colleague from South Shore—St. Margaret's moved a motion in the House to make sure that no more amendments could be made to the bill. Shameless. Shameful.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, it would be nice to say it is with pleasure that I rise to speak to the motion today, but in fact it is with a sense of sadness that I rise to speak to it because of the fact that I think what the government has done, what the Prime Minister has done, what the member for Central Nova has done to the reputation of this House and to politics in general, denigrates and debases the reputation that all of us have as parliamentarians, as people who are committed to public life to making a difference, and yes, to keeping our promises.

I would like to quote from a memo by John Crosbie, a former Progressive Conservative federal minister, a representative of Newfoundland in the cabinet, who recommended to the Prime Minister:

Like any fair and professional leader, the Prime Minister should re-evaluate the performance of his budget in this particular area, and apply the principles of fairness and consistency in public policy. He should adjust his...budget legislation--

John Crosbie certainly is not a Liberal. He certainly is not a New Democrat. The Conservatives are accusing us of indulging in a partisan debate. John Crosbie believes that the Prime Minister should act fairly, but we know that the Prime Minister does not act fairly. He did not act fairly when he cut programs for literacy. He did not act fairly when he killed the court challenges program. He does not act fairly when he attacks women's organizations.

John Crosbie asked that the Prime Minister act professionally. He is a Prime Minister who on the floor of the House of Commons will accuse members of Parliament who ask legitimate questions about Canada's commitment to international protocols, to the Geneva convention, to reasonable treatment of prisoners of war, of supporting the Taliban. He is certainly not professional.

John Crosbie asked the Prime Minister to be consistent. We certainly know that the Prime Minister is not consistent. He is not consistent when he tells Canadians that he will not be taxing their income trust investments. He is not consistent when his budget makes a ridiculous commitment to eliminating the interest deductibility on foreign investments. He flip-flopped on that a few weeks later.

The Prime Minister is not fair, is not professional, and is not consistent. In fact he is hurting the reputation of all politicians, federal and provincial.

I was part of a cabinet that responded to Premier Hamm's campaign of fairness. The member for Halifax West was a fellow member of that cabinet who led the charge and helped negotiate this accord, and it was a remarkable accord. It was extraordinary for a number of reasons.

First of all, it was not an easy accord to negotiate. It involved the federal Department of Finance and other ministers. It took a lot of discussion, hard work and focus on achieving an agreement that was good for Atlantic Canada and fair to all Canadian provinces. It was a 16 year agreement. It was based on the provinces of Newfoundland and Labrador and Nova Scotia having the ability to receive 100% of their offshore revenue without any impact on that equalization agreement or any further equalization agreements after that.

The government is saying that it only applied to the equalization agreement of the time. That is false. That is one of the reasons it was such a difficult accord to negotiate. It was extraordinary and it did apply to any subsequent equalization agreements. It was based actually on solid ground. The precedent was Alberta.

The Prime Minister in fact in a debate on November 4, 2004 said:

This is an opportunity and it is a one time opportunity. It is a...opportunity to allow [Atlantic Canadian] provinces to kick-start their economic development, to get out of their have not status, to grow this...opportunity into long run growth and revenue that will be paid back to Ottawa over and over again and that will benefit the people of those regions--

He said that it was based on the precedent of Alberta. He said:

This is what happened in the case of my province of Alberta. Alberta discovered oil and gas in the 1940s and 1950s, Alberta was a have-not province. From 1957 and until 1965, Alberta received transfers from the equalization program. Alberta was allowed to keep 100% of its oil royalties and there was no federal clawback.

This is what allowed Alberta to kick-start its economy, to expand and diversify, to build universities, to advance social services and to become one of the powerhouses of the 21st century Canadian...

Those are the words the Prime Minister used to justify his support for the Atlantic accord.

The Albertans in the House today ought to support the Atlantic accord based on those words from their Prime Minister. Albertans need to recognize that before Albertans had the vision, foresight and wisdom to put oil into the ground, they were a have not province as well. However, it actually took the ability for Alberta to have full access to its oil revenues until 1965 for Alberta to diversify its economy and to make the kinds of social investments required to move forward.

Clearly, both the Prime Minister and the member for Central Nova, the Minister of Foreign Affairs, and, frankly, the patron saint of hypocrisy when it comes to this agreement and on many other issues we know he has taken positions on over the years, have let all Canadians down, particularly Nova Scotians and Newfoundlanders and Labradorians.

The Prime Minister has spoken in the past of a culture of defeat in Atlantic Canada. I believe there will be a culture of defeat on election night in the next federal election in Conservative headquarters right across the Atlantic Canadian region. Atlantic Canadians do not want to be misled. Atlantic Canadians do not want to be lied to. Atlantic Canadians want to be able to trust in their government, to believe what they are being told is true. If the Prime Minister cannot even convince members of his own caucus, members like the member for Cumberland—Colchester—Musquodoboit Valley, that he is telling the truth, how can he convince Atlantic Canadians that he is telling the truth?

That is a Prime Minister who has demonstrated time and time again that he would do anything or say anything to get elected, to get people's vote. There is not a promise that he will make during an election that he will not break after being elected.

In a minority Parliament, which Canadians have chosen, we have an opportunity to respect their choice to make this Parliament work, to advance public policy that is important for all Canadians, to work together in the interest of Canadians and to give Canadians the type of government in which they can believe. It is very tough for us to do this when we have a governing party, the Conservative Party, a Prime Minister and a Minister of Foreign Affairs whose signatures are not worth the paper on which they are written.

That is a Prime Minister who tends not to like accords. He, in fact, is working this week at the G-8 to try to destabilize the industrial world's commitment to the Kyoto accord. He has ripped up the Atlantic accord. One of the editorials in today's Halifax Daily News says that the Prime Minister hates accords so much it must be difficult for him to dry by a Honda dealership”.

The fact is the people of Nova Scotia and the people of Newfoundland and Labrador have learned the hard way, that they cannot trust the Prime Minister.

Income trust investors who lost $25 billion almost overnight as a result of the Prime Minister's breaking of his promise have learned that they cannot trust him to keep his word.

On of the editorials in today's Chronicle Herald said:

—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.

It went further and said:

If the member for Cumberland—Colchester—Musquodoboit Valley can't even vote for these Conservatives, how can you?

I think that is the question Atlantic Canadians across Atlantic Canada will be asking themselves in the next election.

Atlantic Canadians are extremely proud to be strong Canadians and to fight for values and interests around the world. They fought in global conflicts in World War I, World War II and the Korean conflict. They made a difference in helping to build a more peaceful, democratic and stable world. They are fighting now in Afghanistan and making a difference, and we are proud of them. Atlantic Canadians are tremendously proud of the difference they make in Canada and around the world. They deserve the respect of the Prime Minister not to break promises made to them.

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

Mr. Speaker, I truly respect the words of the hon. member for Kings—Hants. He was a cabinet minister when these deals with the Atlantic accord were being made. He is correct. It was not easy. There was no unanimity saying that we were absolutely going to do this right away. It was tough slogging and they were tough negotiations.

As the hon. member knows, the NDP, the Liberal Party and Premier Hamm worked toward a conclusion to do exactly what the hon. member for Kings—Hants said, to give Atlantic Canadians that step up, similar to what Alberta received, so we could get out of the economic doldrums.

Some people call it the have not provinces. I do not like to use that term. “Have not” reflects upon the people of the area, and we are not in a have not province at all. There are certain developments and policies that need to happen among ourselves and with the assistance of the federal government to get us going again. We have some tremendous opportunities in Atlantic Canada to move forward so our young people do not have to move away.

The hon. member knows very well that when a promise is made repeatedly and broken repeatedly, it has a serious affect on all politicians in this place and across the country. The problem can be fixed.

Could the hon. member tell the House how it should and can be fixed?

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, the ultimate irony of this is the Minister of Fisheries and Oceans from Newfoundland and Labrador and the Minister of Foreign Affairs from Nova Scotia both said immediately after the budget was presented that there was nothing wrong with it and that there was nothing to fix. Since then, they have been saying they are working very hard to fix it. Therefore, they are effectively saying that they are working extremely hard with other levels of government to fix a problem that did not exist in the first place.

The fact is it can be fixed simply by enabling the provincial governments of Newfoundland and Labrador and Nova Scotia to continue to have full respect for the original Atlantic accord, which means that any new equalization deal will apply to them, as well as to other provinces, a new, more generous equalization deal, and they will continue to receive 100% of the offshore revenues.

That was the intent, spirit and letter of the Atlantic accord. For a full 16 years Atlantic Canadian provinces of Newfoundland and Labrador and Nova Scotia would have full access to offshore revenue and to any subsequent equalization deal. That principle was broken by the government. It can be changed simply by the government going back to the original accord and keeping its promise to Canadians.

[Rick Dykstra, Conservative, St. Catharines, ON]

Mr. Speaker, I appreciate the opportunity to participate in today's debate, which was instigated by the member for Labrador, regarding the equalization program and budget 2007.

However, today's spectacle is not about having a rational, factual discussion about equalization or a fiscal balance or the Atlantic accord for that matter. It is not about what is best for the people of Atlantic Canada or best for Canada. It certainly is not about budget 2007.

In fact, I doubt the sponsor of this motion has even read the budget document or the detailed chapter and annex on the subject itself. It does not matter to him or to his party what the budget says or what it proposes. It is simply about partisan politics at its worst. It is really about a Liberal Party that does not know where it is going. It is about a party that is so devoid of principles that logical and rational thinking has been displaced in this debate.

That is why it is so unfortunate that the member opposite would take an issue so important to his province and the province of Nova Scotia, indeed all Canadians, and exploit it for cheap political gain.

I know it would be too much to ask the members opposite to engage in a rational and informed discussion here today, but I urge him, at the very least, to keep all the inflammatory rhetoric down so we can have some semblance of an educated debate. Indeed, if this were an educated debate, the member opposite would admit that the principles of the Atlantic accord have not been abandoned.

If the member opposite had simply read the budget, and he can do that very easily on line by going to www.budget.gc.ca, he would see the error in his claims.

In his speech to the House, the Minister of Finance described budget 2007 as an historic document and with good reason. Underpinning the budget exercise is a commitment to strengthening our federation and fulfilling a vision in which all governments come together to help Canadians realize their full potential.

Budget 2007 follows through on every commitment of the plan and it goes even further. It restores fiscal balance with provinces and territories by putting transfers on a long term, principles based footing. It takes another step toward restoring fiscal balance with Canadian taxpayers through major tax reductions and the tax back guarantee. It makes governments more accountable to Canadians by clarifying roles and responsibilities. It strengthens the economic union based on the plan set out in “Advantage Canada”. With fiscal balance restored, governments can focus on what matters to all Canadians, not old, tired arguments.

The budget should move forward and not be used for petty partisan games that could result in the loss of funding for important programs to improve the lives of Canadians: $1.5 billion in clean air funding to assist provinces with projects that reduce greenhouse gas emissions and air pollution, gone; $225 million in new funding for the Nature Conservancy of Canada to preserve and protect environmentally sensitive lands across the country, gone; $30 million to protect British Columbia's Great Bear Rainforest, gone; more than a billion dollars in health care funding to help provinces reduce patient waiting times and improve the delivery of health services, gone; $614 million in funding for federal-provincial infrastructure projects and labour market training, gone; $30 million in funding for the Rick Hansen Foundation spinal cord injury translational research network to improve the lives of more than 40,000 Canadians with permanent spinal cord injuries, gone; and $135 million in new aid to help the people of Afghanistan rebuild their lives and their country, gone.

What does the opposition think about this? What does the Liberal leader in the Senate, Ms. Hervieux-Payette, have to say about the prospect of that lost funding? She said, “If we spend all our time ringing bells, other bills will not pass as well”. Nonsense. It is nonsense that means nothing to the average Canadian and it should.

What does mean something to Canadians are better roads, a renewed public transit, a better health care system, better equipped universities, cleaner oceans, rivers, lakes and air, and training to help Canadians get the skills they need to build a better future for our country. That means giving adequate funding to provincial and territorial governments.

In budget 2007, through our historic plan, we are working to restore fiscal balance in Canada. Contrast that with the Liberals, like the former finance minister, the member for Wascana, who had the audacity to write:

The Conservatives complain that the previous Liberal government didn't concede the existence of a fiscal imbalance in Canada.

Do members know what he said? He said, “so what”. We also have the leader of the Liberal Party who has repeated publicly that he does not care about the fiscal imbalance. In fact, he pronounced:

Don't ask me to pretend there is a fiscal imbalance and elect me, and hope I will fix it. I don't want to create those kind of expectations.

Today the Liberal leader said that he was for excluding natural resources from equalization but when asked this March about excluding 100% of resource revenues from the equalization, he said, “No, no. I would not commit to this”.

When he was intergovernmental affairs minister he said:

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

Today the Liberal leader said that he was against a fiscal capacity cap but, when asked last March, he said, “a province that received equalization payments cannot see its fiscal capacity going above the fiscal capacity of a province that does not”.

When he was intergovernmental affairs minister he said, “Some provinces want special treatment to maintain their incoming benefits even as their fiscal capacities increase”.

What he said was that he disagreed.

I am particularly proud to note that our approach to restoring fiscal balance is the result of significant consultations conducted with all of our partners as committed to in budget 2006.

Our approach to restore fiscal balance was not conducted in a vacuum. Rather, broad consultations were conducted by the Minister of Human Resources and Social Development, the Minister of Health and the Minister of Transport, Infrastructure and Communities.

The former minister of intergovernmental affairs' predecessor held face to face meetings with his counterparts between August and November, 2006 seeking views on ways to achieve a balance between a principled based approach to the limitation of the federal spending power and the need to continue to offer and ensure flexibility.

The minister sought perspectives on lessons learned from the past, options for future consideration and potential priority areas for action. Written submissions from provinces and territories were also provided. These consultations allowed the Government of Canada to demonstrate to provinces and territories its commitment to a new and open federalism. They also provided an opportunity to obtain provincial and territorial views on ways to achieve enhanced accountability through a clarity in roles and responsibilities of all orders of government.

The government took into account all that we gleaned from these consultations and we also committed to returning the equalization program to a principles based, formula driven footing as part of our plan to restore fiscal balance.

In doing so, we relied extensively on the recommendations of the independent expert panel chaired by Al O'Brien, a former Alberta deputy treasurer. A panel appointed under the tenure of the aforementioned member for Wascana, who at the time said of the panel:

There are so many arguments among the provinces about what the right formula ought to be, that we will engage an independent panel of experts—people who don't have a particular bias, don't have any kind of regional, vested interest—and have them come up with recommendations....

I wonder how those experts would react to the member for Wascana's new “so what” attitude to the fiscal balance.

Following extensive consultations, the O'Brien report proposed a comprehensive, principled based set of reforms to the equalization program. As a Globe and Mail editorial pronounced, the O'Brien report “presented a largely acceptable approach to the predicament”, a predicament caused by what The Globe and Mail termed “recklessly” and “dubious meddling” of the old government.

We reviewed this report and consulted extensively with Canadians and with provincial governments. We have concluded that the O'Brien report forms a solid foundation for the renewal of the equalization program.

As the Toronto Star noted, “the Conservative government is cleaning up the equalization mess the member for LaSalle—Émard left behind”.

Indeed, the new program meets our commitment on fully excluding natural resource revenues from the program. We said that we would exclude non-renewable natural resource revenues without adversely affecting provinces by the changes to the equalization formula, and we did. Budget 2007 delivers on this commitment.

The new equalization program will give provinces the higher of the payments calculated under 50% natural resources exclusion or full exclusion.

We would expect the exclusion of 50% of natural resource revenues to provide higher payments in most cases because it increases the equalization standard. However, this of course depends on resource production, the levels and natural resource prices.

Giving provinces the benefit of full exclusion or 50% exclusion, fulfills the government's commitment to fully exclude non-renewable natural resource revenues from equalization without lowering payments to any province.

We said that we would respect the offshore accords with Newfoundland and Labrador and Nova Scotia, and we did. Newfoundland and Labrador and Nova Scotia can continue to get the benefits of their offshore accords and operate under the previous equalization system, ensuring that these provinces continue to receive the full benefit envisioned in these agreements.

As The Globe and Mail editorial bluntly remarked, there is no cap”. It said that resource revenues were not included when the province's share of equalization was calculated. The article goes on to state:

That is because...the Atlantic Accord...explicitly exempted the province's resource revenues from any calculation of its equalization entitlements.

That accord trumps the budget's measures. And the Conservatives went out of their way to underline that stipulation in the budget.

I will conclude my remarks by reminding the member opposite that we do not and we have not abandoned any principles. We have not abandoned the Atlantic accords. Rather, we have taken action on fulfilling our commitments, in an open and principled way, to strengthen our Federation so that government can work in a collaborative way to provide tangible results for all Canadians.

If the members opposite do not believe us, they should listen to what the independent equalization experts are saying, the people who do not have a particular bias, as the former Liberal finance minister would call them. We have people like Thomas Courchene, who rendered a thumbs up to budget 2007 and its major accomplishment to remove the fiscal basis of our Federation from its earlier state of disarray and to strive to reposition Canadian fiscal federalism within a framework of principles, fiscal, institutional and political.

We just need to listen to the former NDP Saskatchewan finance minister, in that respect an academic, Janice MacKinnon, who lamented the former Liberal government for turning “its back on the long established, formula-driven, rules based process for deciding equalization entitlements in favour of an ad hoc approach”.

MacKinnon wants federal-provincial fiscal relations to be put on a more predictable, stable footing and be based on rules and established formulas that prevent the federal government from making ad hoc decisions and, in her words, “the 2007 federal budget goes a long way to achieving this goal”.

Let us listen to what Al O'Brien, the head of the expert federal panel, had to say. He said, “Budget 2007 adopted our recommendation. Our recommendation is the core framework and I'm really quite encouraged”.

Tackling this issue was not easy. It was not a simple proposition. It involved making tough decisions and seeking compromise. Fundamental to the working of any successful federation is compromise or, as MacKinnon put it, “Federal-provincial relations require compromise and a willingness of provinces to look beyond their own provincial borders”.

Through our efforts, equalization has been restored to a principles based program after years of ignoring it. Instead of working for partisan interests, we made our decisions in the best interests of all Canadians, including those in Nova Scotia and Newfoundland and Labrador. That is what all premiers asked and all Canadians expect us to do. We will not apologize for that.

When we look at what we have done and the commitments we have made to each province and territory in this country, it is clear that decisions are not easy and tough decisions are that much more difficult to make. When we look at Newfoundland and Labrador or Nova Scotia, they receive $1.3 billion under the new equalization formula: $130 million in offshore accord offsets, $639 million under the Canada health care transfer and $277 million for the Canada social transfer, which includes additional funding for post-secondary education and child care. Commitments made throughout the country in each province and territory are included in the budget.

The budget went through committee and the committee heard from witnesses, including the Saskatchewan premier who was given an hour to ensure he had a full opportunity to present his thoughts and his position on the budget and what he felt it did not include. We did not ignore anyone who wanted the opportunity to speak to this.

However, what is important at the end of the day is that we have a budget, which the finance committee went through clause by clause. We are debating it in the House today. It should go through the Senate process of being heard but, as I indicated in my speaking notes, there are close to $5 billion worth of priorities waiting.

The fact that we have put a number to it is important and relevant from a numbers perspective but what needs to be heard is that there are many programs that hinge on that funding to be implemented in this year.

We obviously look to the leaders in the Senate, the majority of whom are from the Liberal Party, to dedicate themselves, prior to the end of this month, to ensuring the budget passes and becomes law so the expenditures within it can be met, whether they be from one end of the country to the other, for defence, the environment or the investment in the work Rick Hansen has done for decades in this country, which has now been recognized.

From the over 450 presentations at the finance committee, 44 recommendations were put together by all parties and they were given to the finance minister. Many of those recommendations, which were agreed to by all parties, are in the budget, but there are two parties today that are opposed to the budget.

For those reasons, I sure hope, while the debate happens and the debate continues, that at the end of the day respect for this process is brought and that budget is passed by the Senate.

[Charles Hubbard, Liberal, Miramichi, NB]

Mr. Speaker, I listened with interest to the member for St. Catharines. In fact, I have been here most of the day and I am waiting for some member from Atlantic Canada on the other side of the House to tell us what a great budget it is.

The member talked at length about equalization. My province of New Brunswick is getting a less than 2% increase this year in its equalization from the federal government. The province of Quebec is getting nearly a 30% increase. In fact, it is such a big increase that the Premier of Quebec has decided he can reduce taxes in that province by nearly $1 billion.

First, could the hon. member relate to us why the other nine or ten Conservatives from Atlantic Canada are not here supporting him? We would like to hear from them. Second, on equalization, is it fair that only Quebec received a big increase in equalization?

[Rick Dykstra, Conservative, St. Catharines, ON]

Mr. Speaker, the member has said that he has been here all day. I will take him at his word on that. He may have slipped out for a bite to eat and missed the Minister of Fisheries and Oceans, who delivered a speech in the House this morning on that exact issue.

I do not think there is any doubt that those of us who sit on this side of the House are more than prepared to stand up and defend the budget and the equalization payments that are included within it.

My colleague speaks about New Brunswick. We can talk about percentages, but what we really need to do is start to talk about fairness in equalization, which includes $1.4 billion in equalization payments to New Brunswick, $512 million under the Canada health transfer, $222 million for Canada's social transfers, including additional funding for post-secondary education, and $64 million for infrastructure. I could go on.

New Brunswick, Nova Scotia, Ontario and Quebec get what they deserve in this budget.

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

Mr. Speaker, we are not really arguing the budget today. This is about one aspect of the budget that concerns the Atlantic accords.

I would like the hon. member to answer two questions.

First, he talked about the offset payments involved here. However, an independent economist says that over the life of the accords $1 billion will be lost under this formula. How can he justify the offset payments that he talked about, but at the loss of $1 billion over the Atlantic accords, which is fundamentally breaking a promise?

The other issue is this. The member talked about how the finance minister and the Prime Minister did not break a promise, but yet almost every Atlantic Canada Conservative MP has said that they are continually working behind the scenes to ensure that we get what is right, obviously admitting that it is not right currently as it sits.

I encourage the member not to talk about other aspects of the budget. If he talks about other aspects of the budget, he will fully admit that he has no idea what he is talking about when it comes to the offset payments to the Atlantic accord.

[Rick Dykstra, Conservative, St. Catharines, ON]

I will speak to my colleague's second point first, Mr. Speaker.

There are members on this side of the House who continually work to improve every aspect of legislation, whether it be justice legislation, or finance legislation, or any other legislation that we have moved forward. The fact is the difference between the Liberal Party and the Conservative Party is that we are prepared to continue to work, continue to move forward and ensure that we have left no stone unturned.

I guess for the Liberal Party members, they say it once and never say it again. Those members continually say that is always right regardless of whether it is wrong.

As I indicated very clearly, we have not broken our commitment. We laid that out very carefully with the budget that the Atlantic accord is being honoured.

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

Mr. Speaker, it would be comical if it were not so sad. The hon. member accuses one of the Liberal members for not reading the budget. I doubt the hon. member even read the Atlantic accord. He did not sit in on the meetings.

He talks about the budget, so I will talk about what is not in the budget. There was a motion passed in the House for veterans first to help injured soldiers, widows and veterans. The motion was passed by the House and not a word nor a penny of it is in the budget. A promise was made by the Prime Minister to a widow of a veteran that a VIP program would be extended immediately, but there is not a word on that in the budget.

I will get back to the point of the accord. There are many things the government left out of the budget, but it will not speak about those parts. An hon. member from the Conservative caucus was unceremoniously booted out, even after the Minister of Foreign Affairs said, “We do not and will not kick people out of the Conservative caucus for voting their conscience”.

I will ask the hon. member a very simple question. Does the hon. member support what the Minister of Foreign Affairs said, or does he support booting out one of his own colleagues from the Conservative Party?

[Rick Dykstra, Conservative, St. Catharines, ON]

Mr. Speaker, the member asked a question and made a comment with respect to issues of conscience.

The member could go back to his riding to talk about the valuable things in this budget and tell his constituents that they are good for his them. These are things such as accelerating the implementation of the Canada first defence plan so Canadian Forces will receive $175 million this year, earmarking $60 million to bring the environmental allowances paid to soldiers, $10 million to establish five new operational stress injury clinics to assist Canadian Forces. These are investments in the member's riding and province.

No doubt, after the budget is passed, even though he will vote against it, the member will say that these things are good for province.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Mr. Speaker, it is very interesting to hear a member from Ontario discuss this issue. I wish the hon. member would stick to the issue at hand, which is the bold-faced abrogation of an agreement that the then leader of the opposition, now Prime Minister, said fully, squarely and without equivocation he would support.

I will give the hon. member a copy, if he wishes, of the arrangement between the Government of Canada and the Government of Nova Scotia on offshore revenues. It is signed February 14, 2005, St. Valentine's Day. It breaks my heart to have to tell the hon. member this, because it contrasts what is said in the budget.

Under point four, it says:

Commencing in 2006-07, and continuing through 2011-12, the annual offset payments shall be equal to 100 per cent of any reductions in Equalization payments resulting from offshore resource revenues. The amount of additional offset payment for a year shall be calculated as the difference between the Equalization payment that would be received by the province under the Equalization formula as it exists at the time if the province received no offshore petroleum resource revenues in that year...under the Equalization formula as it exists at the time...

The budget on page 115, which the hon. member claims to have read and has invited other members to talk about, simply says:

—the Offshore Accords and ensures that these provinces will continue to receive the full benefit that they are entitled to under the previous system.

There is the problem. The government has gone to the old system while abrogating the new one.

Would the hon. member finally get it right and answer this? Would he at least acknowledge that this is a broken promise?

[Rick Dykstra, Conservative, St. Catharines, ON]

Mr. Speaker, absolutely not. The member just verified that the Atlantic accord trumps the budget. It is as simple as that. I thank him for doing that.

If the Conservative government were not here and it were a Liberal government, horrid thoughts come to my mind. The fact is a Liberal government would not have dealt nor tried to deal with this issue. It would not have even tried. Members on the other side of the House do not think it is an issue or a problem. We dealt with it.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I feel sorry for my hon. colleague, the member for St. Catharines. He obviously has been sent in here today and has been asked to give a speech on the subject because his government cannot find many folks from Atlantic Canada who are willing to speak on it from his side. He has come in, read a speech and tried valiantly to defend the indefensible.

I thank my hon. colleague, the member for Pickering—Scarborough East, who has had a look at the Atlantic accord, the accord that I signed, in fact. I am familiar with it as well. He has tried to explain for the member for St. Catharines what it means and how it is a betrayal in this case.

The question before us today is very simple. Has the government honoured the offshore accords with Newfoundland and Labrador and with my province of Nova Scotia? The answer is also very simple. The answer is no.

I know it, Danny Williams knows it and John Crosbie knows it. The member for Cumberland—Colchester—Musquodoboit Valley knows it, and he had the guts to admit it. He can be proud of that. Nova Scotians are proud of him for his decision.

Premier Rodney MacDonald sort of knows it. I wish he would be a little more firm about it and a little stronger. He seems to be a little afraid to stand up and fight for Nova Scotia. Maybe he is afraid of the Prime Minister. It seems a lot of members on that side are, and I understand that. I would like him to be a little firmer and stronger. We have seen Mr. Williams be very strong.

Everyone with a shred of common sense in Atlantic Canada knows it. They know that our region has been betrayed. They know the Prime Minister has shown to Atlantic Canadians that his word is worthless.

I do not think I mentioned, Mr. Speaker, that I have the honour of splitting my time today with the honourable member for West Nova, my esteemed colleague. I look forward to his comments as well.

Atlantic Canadians know the Conservative cabinet and members of the caucus from Atlantic Canada are too afraid of the wrath of the Prime Minister to speak up, to tell the truth, and to fight for the interests of the people of their provinces, as they should do. Atlantic Canadians are not being fooled by the false arguments that are being trotted out by Conservative members to explain how my province, for example, will lose $1 billion and how that is a good thing supposedly for Nova Scotians.

The finance minister loves to say that Nova Scotia has a choice of either the new equalization program or the accord and the old equalization program. My honourable colleague, the member for Pickering—Scarborough East just explained why that is a false dichotomy, a false choice. As Jim Meek, a columnist at the Halifax ChronicleHerald said today, “The minister's cheap parlour—or parliamentary—trick is to suggest he has given the province a fair deal”.

We know that is not the case. The fact is the accord applies, as it says, to equalization as it exists at the time. No matter how it changes, provisions and the terms of the accord still apply. The payments under the accord are still to be made. The government has denied that and it has torn to shreds the Atlantic accord.

What other answers is the government giving? The Minister of Finance, for example, loves to list off the various things in the budget, other things that affect Nova Scotia, Newfoundland and Labrador and Atlantic Canada in general. Is the government really saying that we do not deserve to have payments for health care, that we do not deserve funding for environmental protection, for example? Is that what the government is saying? Is it saying that we cannot have this because we are going to have that? Is the government saying that we cannot have what it promised on the offshore accord because it is going to do something in terms of funding that it is giving to every other province anyway? This is some deal. That is not very impressive.

Is the government really saying that we only get equalization and education dollars because of its charity and goodwill? Is that what the government is saying? It is hogwash. It is absolute rubbish. The argument Conservatives are making is beneath contempt and worst of all, they know it, but they do not dare cross the bully boss, the Prime Minister. They are clearly afraid of him and they have not found intestinal fortitude.

[The Acting Speaker, Andrew Scheer]

I am not sure if referring to the Prime Minister in those terms would be parliamentary. I would ask the honourable member from Halifax West to withdraw that comment.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, if that is in fact unparliamentary, and I was not aware it was frankly, then I will withdraw it.

It is fair to say that the hon. members are clearly afraid of the Prime Minister. We have seen many bullying tactics in the House and on the Hill. These colleagues from Atlantic Canada have not found, unfortunately, the intestinal fortitude to stand up to the Prime Minister. There is still third reading of the budget bill coming up shortly. I hope they will show that fortitude then.

There are two things that everyone in Nova Scotia knows. The first is that the Prime Minister betrayed Atlantic Canada on budget day when he failed to honour a signed agreement between the Government of Canada and my province. It was a signed deal, a signed contract; I know, because I signed it.

The second thing is that the hon. member for Central Nova and the hon. member for South Shore—St. Margaret's had the chance to stand up for their province. They could have said, “Wait a minute, this is not right. One cannot just unilaterally tear up a written contract just because one does not like the region and wants to punish us”. They could have said that.

Those members could have done what the member for Cumberland—Colchester—Musquodoboit Valley did, who showed he has a backbone. He stood up for his region and his province. Instead, sadly, they chose to support their misguided leader. Was it out of party loyalty? Was it out of fear? I do not know what the reason was, why they could not show more fortitude.

I know one thing, that voters in Nova Scotia and across Atlantic Canada will remember the lack of support those Conservative MPs from Atlantic Canada showed the region. When the next election is called and the members are out knocking on doors, I think they will hear about it. Voters will remember that the budget betrayal at the hands of the Conservatives may cost my province, for example, $1 billion for things that we need, such as better hospitals, schools, fixing roads and many other important investments. They will remember that those Conservative members of Parliament squandered a deal that gave Nova Scotia 100% of its offshore revenues with no clawback.

It is exactly what those Conservative members promised when they sent out a brochure to Atlantic Canadians a few years ago, which said on its cover, “There is no greater fraud than a promise broken”. They promised no clawbacks, 100%. That promise has been broken.

The foreign affairs minister said that the budget respected the accord. That has been his claim for months. Now he is saying that the decision of the member for Cumberland—Colchester—Musquodoboit Valley was premature because he and others are still in talks over honouring the accord. Huh? How is it possible for one to have already honoured it but one is still in talks over honouring it? It seems to me it ought to be one or the other.

The finance minister and his Nova Scotia puppets over there tell us we should be happy that we are getting more in equalization this year. What a joke. What a farce. They should read the accord.

That is why columnists in Atlantic Canada such as David Rodenhiser of the Daily News are so outraged. He said today:

We have a government that lies to us, steals from us and aligns itself with a party bent on tearing the nation apart. These are not proud days for Canada.

In fact, underneath his article there is a line which reads:

David Rodenhiser thinks [the Prime Minister] has a phobia of accords: the Atlantic Accord, the Kyoto Accord, the Kelowna Accord. The man must be petrified when passing a Honda dealership.

When the finance minister was Mike Harris's henchman in Toronto, he mocked Premier Hamm, saying that his campaign for fairness was like someone who won a lottery and still wanted to collect welfare. It seems the same meanspirited mentality prevails today. The hon. member for Central Nova and the hon. member for South Shore—St. Margaret's have adopted it, unfortunately. That is very sad. It is frustrating. It is atrocious. They should be ashamed that the government has a petty, patronizing attitude toward Atlantic Canada. The next thing is they will say we have a culture of defeat.

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

Mr. Speaker, I listened to the hon. member's words very carefully. I want to ask him a question that I posed to his leader earlier today to which I did not get an answer. I am not sure whether I will get a direct answer from the hon. member. I would like the member to clarify remarks made by his leader in March of this year, only a few short months ago.

In March of this year the Leader of the Opposition stated that he believed that non-renewable natural resources should not be excluded from the equalization formula. He went to say that he also believed in addition to that, there should be a fiscal cap.

Today the hon. opposition leader seems to be completely reversing himself. There is a complete contradiction. Three months ago the opposition leader stated there should be no removal of non-renewable natural resources, and in addition to that, we should put on a fiscal cap, which would have destroyed, frankly, any attempts by Newfoundland and Labrador and Nova Scotia to receive money through equalization.

Since the opposition leader is clearly a learned man and I am sure he chose his words very carefully, was he misleading Canadians then, or is he misleading them now?

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, in fact my hon. colleague should have listened to the answer to his question this morning. Obviously he did not, because he would have heard the leader of my party make it very clear that is not what he said at all. In fact, I know what he said.

The Leader of the Opposition has made it very clear that he will live up to the terms of the Atlantic accord. In fact, he was part of the cabinet that approved the Atlantic accords, that implemented the Atlantic accords. What the member is talking about is absolute nonsense and he ought to know it.

I think we should hear more from Conservative members from Atlantic Canada who actually have some idea, or I hope they do, of what the accords are all about.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I rise in my place today very troubled. We went through an election campaign where we were promised honest and accountable government with good stewardship. In Hamilton where we have lost 11,000 manufacturing jobs in the last year alone, we are facing a situation where there is no manufacturing strategy. We have had the softwood sellout. Now Premier MacDonald, Premier Williams and former premier Hamm are flatly saying that the government has betrayed people.

My question for the member opposite is, how low does he think they will go and who is next?

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, it is becoming increasingly apparent that the Prime Minister has a rather negative attitude toward written agreements and his own promises.

Did the government honour the Kelowna accord? No. Did the government honour the child care agreements that it signed with every province in the country. No. Did the government honour our international obligations under Kyoto? No. Did the Prime Minister keep his own word on income trusts? No.

Does the government have any honour or integrity left? I do not think it does. It is not showing it.

Can the Prime Minister be trusted to keep his word to hard-working Canadians on anything? No, unfortunately.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, my question for my colleague, the member for Halifax West, is a fairly simple one.

The fact is the Premier of Nova Scotia said immediately after the budget:

I'm...caught by surprise tonight [by the budget] and quite frankly, my government's caught by surprise. I've always believed the offshore accord was an economic right of Nova Scotians...not a handout.

It is almost as if the government wants to continue to give handouts to Nova Scotia. That is unfair. The premier said that he was blindsided by the federal budget and yet, the other night he was on the phone trying to convince the member for Cumberland—Colchester—Musquodoboit Valley to vote for the budget that he had earlier said blindsided the people of Nova Scotia.

My question for the hon. member is, who is Premier Rodney MacDonald serving, the people of Nova Scotia or the Prime Minister?

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I must tell my colleague that I am disappointed in the performance of the premier of my province in this case. Actually, I like the premier. I have played hockey with him. He is a very good hockey player and he is a nice guy, but I think he has not been nearly as strong as he should be on this issue.

We have seen very great strength from Premier Danny Williams in Newfoundland. He has been very firm and has shown real backbone. I would like to see a greater strength from the premier of Nova Scotia. To say to the one gentleman here on the Conservative side, the one hon. member who is prepared to stand up for Nova Scotia, that he should not do so is unfortunate and I regret it.

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, I am pleased to participate in this debate in support of the motion introduced by the member for Labrador, which reads as follows:

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.

It is quite serious when we have to stand in the House and make such a resolution about the Prime Minister, about his engagement, his respecting of his word. There are institutions that Canadians have to be able to depend on. One is the office of the Prime Minister. While we may debate policy, while we may have different opinions on how to bring the country forward and what the right programs are for our country, we should always be able to depend on the office of the Prime Minister, and that whoever occupies that office at the time will be a person of integrity who is true to his or her word.

It is very disappointing that we are in the situation where Canadians cannot trust the office of the Prime Minister because the person who holds the office has shown time and again that his word is completely meaningless. Let us remember back to before the same individual became Prime Minister. He said that supply management was a communist scheme of price fixing. He said that we had to build firewalls around Alberta. On national unity he said he did not care how many national capitals there were, and he now calls himself the great defender of national unity. That is the person in whom we should be able to put our trust and confidence in trying to advance the interests of the citizens of this country and the country's future.

When we look at the example of the Atlantic accord, I think first we should look at what the accord is. The accord is quite simple. It says that Nova Scotia and Newfoundland shall benefit from 100% of the revenues from their non-renewable resources, in this case offshore oil and gas, to the exclusion of all other programs. That means if there is change in equalization, if there is additional money given in other programs by the federal government to the provinces, that Nova Scotia and Newfoundland would their share and the Atlantic accord is separate from that. It is above and beyond all other programs.

The budget turns it into an either/or situation. The province of Nova Scotia and its finance minister must decide whether to participate in the new equalization formula which has some advantages for Nova Scotia, or to maintain the Atlantic accord which also has some advantages for Nova Scotia. If Nova Scotia goes into the new equalization formula, the Atlantic accord substantially disappears, the amount of revenue is capped and Nova Scotia stands to lose $1 billion.

Some may argue that in the current system the accord is a disproportionate benefit for Nova Scotia and Newfoundland and Labrador. Well, perhaps one could make that argument. Perhaps the Prime Minister could advance that argument but that is not the argument he advanced during the election campaign. He said in writing and verbally that he would honour the letter and the intent of the accord.

I remember when I was on the government side of the House, we presented a budget that included the ways and means to implement the Atlantic accord. The Prime Minister and members of his party, the opposition at that time, asked that we split the bill, that we remove the Atlantic accord from the budget because the intention of the opposition members at that time was to vote against the budget but they wanted to vote in favour of the accord.

That was the very same accord they are now knee-capping. That is pure hypocrisy and it is a betrayal. It is a betrayal to the people of Atlantic Canada and it is a betrayal to the people of Saskatchewan who were promised that they would get 100% of the revenues of non-renewable natural resources outside of the equalization formula.

It was pointed out by the member for Labrador that we are getting hit now, as will others, each at their time.

The Prime Minister, when he made those promises in the campaign, did not say he would somewhat honour the accord but would cherry-pick elements, suggestions and recommendations out of this and that report, some from O'Brien and some from others, and make a budget that dismantles the intent of the Atlantic accord. That is not what he promised. He promised that there would be 100% exclusion of non-renewable natural resource revenues from the equalization payment and that the accord would be maintained.

I was disappointed. I happen to have the privilege of sitting on the finance committee, where we evaluated the budget. Premier Lorne Calvert came before us and made a very good presentation on behalf of his government. I was very disappointed, as was mentioned by the member for Halifax West, by the relative weakness of the premier of Nova Scotia on this issue.

We know that he is in a dire political situation. We see in the polls that he is in third place. There is not a lot of confidence in his government. People are looking for alternatives. Rather than showing strength and fighting for what already has been won by his predecessor, the relative weakness of the premier of Nova Scotia on this issue can be seen. We are not asking for anything new here. We are asking that the Government of Canada honour its commitment.

That brings me to the second point, which is the institutions. We must be able to trust the Office of the Prime Minister and whoever occupies it, and we also must be able to trust the legacy of the succession of the Government of Canada, in that an agreement signed by one Government of Canada lasts until the end of its natural course. In this case, it would be 2020. An agreement is an agreement is an agreement.

Premier Rodney MacDonald should accept the invitation of Stephen McNeil, leader of the Liberal Party, to put forward a common front. Although I have not been in discussions with him, I am sure Darrell Dexter would join. We would have a common front with all Nova Scotians fighting for 100% of the Atlantic accord.

What we see and hear in the papers and the media is that there are negotiations happening, and the Minister of Fisheries and Oceans mentioned that in question period, negotiations for improvements in the bill presented by the government, but not the 100% retention of the Atlantic accord.

A promise 90% kept or 80% kept or 70% kept is 100% broken. The accord is a signed deal. It should be maintained. I think the member for Cumberland—Colchester—Musquodoboit Valley has made it very plain.

Let us look again at the institutions of our country. Let us look at our Prime Minister. He and the Minister of Finance, during the election period, promised that they would not tax income trusts. They gave that solemn promise to Canadians. Canadians, many of them seniors, were encouraged to invest even more within the income trust sector as they had the promise of the Prime Minister that they would not be taxed.

What does he do? At the first occasion, there is a 33% tax and a 100% betrayal of those investors, with $25 billion worth of capital loss, a lot of it in the hands of seniors, either retired or preparing to retire. Let us imagine this. I spoke to some seniors who told me that they went from having a comfortable retirement, and being economically and financially self-sufficient, to poverty, essentially, to sustenance living on small pensions and reduced savings.

They were losing $10,000 to $15,000 of revenue a year. When one's revenue is $35,000 to $45,000, losing $10,000 is a lot. It is huge. That is money they had depended on. They had been encouraged to do it by the Prime Minister. If the Prime Minister had not made that promise, the reasonable investor would not have had such huge exposure in one element of the market, but that was not the case.

The Atlantic accord? Betrayal. It was a betrayal by the Prime Minister of the people of Atlantic Canada. And there was a betrayal by the Prime Minister of the people of Saskatchewan.

As for the member for Central Nova, he is an experienced member of the House of Commons who is not prone to fly off the handle and do things he has not considered. He has been here long enough. In answer to my question, he made a promise in the House to his colleagues that they could vote as they wished, that they could vote their conscience on the Atlantic accord and there would be no retribution and they would not be kicked out of caucus.

Either he was misleading the House or he is a complete buffoon, because he knew, as we saw with the vote, that the minute the member for Cumberland—Colchester—Musquodoboit Valley voted his conscience, he was removed from his caucus.

The member for Central Nova goes around the world representing our country. We have seen the Prime Minister betray the country, its citizens and Atlantic Canada, and we have seen the Minister of Foreign Affairs betraying his colleagues. These people are out there representing the interests of the nation and entering into dialogue with statesmen from other countries in trying to find accommodations to bring forward. Those people from other countries can have no confidence in the institutions of our country.

It is a dire situation. It is a situation that I have not seen before. I ask that the Prime Minister and the Minister of Finance apologize to Canadians, to Saskatchewan and to Atlantic Canadians before it is too late and reverse this unfortunate decision.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, the member's comments draw to mind the newspaper headline following the last election in Nova Scotia which stated that the NDP is a government in waiting. With the references to what that premier has been doing, now I am starting to understand why.

My question is very simple. I would never claim to be a mathematician, but if there is no exclusion, that is a billion dollar loss for Atlantic Canada. It should be that simple. When we have Premiers MacDonald and Williams and former premier John Hamm all saying that the government has betrayed them, again I say, who is next?

[Robert Thibault, Liberal, West Nova, NS]

Absolutely, Mr. Speaker. A quick evaluation of the budget shows it on the equalization and on transfers. The three provinces that will suffer most and not get any increases are Saskatchewan, Nova Scotia, and Newfoundland and Labrador, three provinces that need a lot of assistance, that need a hand up in using their resources to advance their own cause.

I was honoured to see that the member for Cumberland—Colchester—Musquodoboit Valley had the courage to make a very tough decision and vote against his caucus. I am amazed that not one of the Newfoundland and Labrador MPs had the courage to do that. One out of three from Nova Scotia did, but zero out of 12 from Saskatchewan. There are a dozen Conservative MPs from Saskatchewan and none of them raised the issue. None of them made any noise. A dozen is six of one and half a dozen of the other: six sheep and half a dozen cowards. They should fight for their province, as did the member for Cumberland--Colchester--Musquodoboit Valley.