Letter to the Editor
NOTE: The following is a letter to the editor from Premier Rodney MacDonald.
June 11, 2007
Letter to the Editor:
Federal Finance Minister Jim Flaherty says in Saturday's Herald that it is an "urban myth" that the federal government's 2007 Budget affects the 2005 Atlantic Accord. In fact, that budget claws back every cent of the initial $830-million accord payment, and more, by giving us lower Equalization payments than we're entitled to receive. How does the 2007 Budget do that? Mr. Flaherty says it's "complex" and that's the only part of his letter to the Herald that I agree with. Mr. Flaherty talks about a choice between two formulas. On the surface, having a choice sounds reasonable. In fact, it's not reasonable. Let me give you an analogy that explains why.
Suppose you are an employee in a company and you achieve a bonus from your boss. You take that bonus and put all of it against your mortgage. Two years later, the company is doing better so the boss gives everyone a raise. But he gives you a choice between your old salary with the bonus you got two years ago or the raise. But the catch is that if you take the raise you have to pay back the bonus you got. Is that fair?
That's what the federal government is doing to Newfoundland and Nova Scotia. They gave us the accord two years ago and we put it on our debt. Now they are clawing it back if you choose the richer Equalization formula. In effect, to get the full value of the Equalization formula they are asking Nova Scotia to go further into debt. It makes you wonder if Nova Scotia and Newfoundland are part of Canada.
Minister Flaherty is wrong in another important way about making a choice. Nova Scotia, in fact, does not have to make a choice because the Atlantic Accord contemplates precisely the situation we find ourselves in now. The accord says we are entitled to the benefits of the accord and to whatever we would receive from the equalization formula in place at the time.
Nova Scotia has a full right to Equalization like all eligible provinces. The irony is that we want one day to be ineligible for Equalization. We want to be a "have" province. That it is the purpose of the Atlantic Accord - to develop our economy so that we can become a "have" province. The Atlantic Accord, without clawback, is fundamental to that goal.
Minister Flaherty knows better. Contrary to his letter in the Herald, he knows that it is not "an urban myth" that we are being short-changed. His own officials have informed us that Nova Scotia will lose $54 million next year from Equalization because of his Budget's impact on the Accord.
This week there will be another vote in the House of Commons on the budget. I urge every Nova Scotia MP, whether Conservative, Liberal, NDP, or Independent to vote against the Budget bill on third reading. I also call for every Nova Scotia Senator to delay passage of that bill through the Senate until they've had a chance to understand our position and fully comprehend the impact of the Budget on Equalization - our constitutional right.
The accord is a contract between Nova Scotia and Canada. It guarantees that Nova Scotia will be the principal beneficiary of petroleum developments off our shores, a principle agreed to by the governments of Canada and Nova Scotia more than 20 years ago and which culminated in the Atlantic Accord that then-premier John Hamm signed in 2005.
The government of Canada has a choice. That choice is between living up to the agreement it signed or repudiating that same agreement, with all the consequences that flow from the fundamental breach of trust inherent when an agreement is unilaterally disavowed.
At the end of the day, all we want is what was signed in 2005. This is the Atlantic Accord. Instead, the federal government unilaterally ripped it up on March 19 when they introduced their budget. We want the Accord. That is my position. I'm confident it is the position of all Nova Scotians. Minister Flaherty, give us back our Accord.
Rodney MacDonald Premier of Nova Scotia