Premier Presents Nova Scotia's Case to Senate

Premier Rodney MacDonald appealed to the Senate today, June 19, to use all of its power and authority to require the Parliament of Canada to honour Nova Scotia's offshore accord.

He presented evidence on how the federal budget kills the offshore accord, costs Nova Scotia hundreds of millions of dollars, jeopardizes federal-provincial relations and is dividing the country.

"The federal government's efforts to tear up the accord are not only extremely harmful to Nova Scotia, they do great damage to the reputation of the Parliament of Canada, they fuel public cynicism, create regional divides, and they cast a dark shadow over the future of our federation," the premier said. "It demonstrates to Canadians, that the word of their government is to be questioned -- and the contracts it signs on their behalf -- not worth the paper they are written on."

Contrary to federal Finance Minister Jim Flaherty's contention that the accord remains intact, the premier quoted Section 81 of the federal budget implementation bill which changes the accord. The accord guaranteed Nova Scotia 100 per cent of its resource revenues under any equalization program.

"The federal budget violates not just the spirit and intent of the accord, it violates the letter of the accord in every way, shape and form," the premier said. "The offshore accord was designed to last at least 15 years. It will survive about two years unless the federal budget is amended."

Finance officials estimate that losing the offshore accord could cost Nova Scotians between $793 million and $1.3 billion. The range is projected from freezing the federal government's latest estimates of provincial fiscal capacities, disparities and population for 2008-09, combined with projected changes in Nova Scotia's offshore natural resource revenues.

Premier MacDonald said that while the financial hit is alarming for Nova Scotians, the principles at stake should worry all Canadians.

"This is about more than dollars and cents. It's about equality of opportunity, fairness and respect for all Canadians," he said. "It's also about harmony within our federation, and what value we can put on the government of Canada's signature."

The offshore accord is an economic development agreements, rooted in the government of Canada's constitutional obligation to further economic growth in all regions of our country. The accord was meant to allow Nova Scotia to use the full benefits of its offshore resources to gain economic momentum, to put the province on the road to greater self-sufficiency, and to make an even greater contribution to Canada.

The premier cited, and supported, federal decisions to invest in Quebec's aerospace industry, Ontario's automotive industry, western grain subsidies, and Alberta's tar sands.

"Why is it that Nova Scotia's economic agreement is under such harsh attack when the financial benefits to our province pale in comparison to so many others across our country?" he asked. "By tearing up the accords, the federal government has sent the wrong message to Atlantic Canada."

Finance Minister Michael Baker proposed specific amendments to the federal budget legislation that would continue the federal government's full compensation to Nova Scotia for any lost offshore revenues as a result of equalization changes. This would help restore the intent and integrity of the 2005 Offshore Accord.

The speech can be found at www.gov.ns.ca/premier/speeches/2007-06-19-Senate-Accord-en.asp .