SASKATCHEWAN FARTHER AHEAD DESPITE PREMIER’S TANTRUM
By Garry Breitkreuz, M.P.
Yorkton-Melville
April 16, 2007

A half-truth is a good as a lie. Here is the rest of the story Saskatchewan Premier Lorne Calvert did not tell you in regard to the issue of equalization transfers to the provinces.

Several years ago, the Conservatives raised the issue of fiscal imbalance between the provinces and the need to fix the formula. At that time, the Liberal Government and then Liberal Finance Minister Ralph Goodale repeatedly denied the very existence of provincial financial concerns, including those of Saskatchewan. Yet, the Liberals and Mr. Goodale were willing to pen a side-deal with the Provinces of Nova Scotia and Newfoundland, and refused to make a similar deal with Saskatchewan. Mr. Goodale was a part of the Liberal policy of pitting region against region – deals for Nova Scotia and Newfoundland of the east, nothing for Western Canada’s Saskatchewan.

The whole idea behind equalization payments is to give all provinces in Canada the capacity to provide comparatively equal basic services to its citizens. A cap has to be placed on payments so that the province receiving a payment doesn’t end up with more money that the province paying in. That’s only fair. For example, Saskatchewan would have had a fiscal capacity greater than that of Ontario who has never received an equalization payment.

When the fiscal imbalance issue was first brought forward by the Conservatives, Saskatchewan was a “have-not” province and would have received a higher transfer from the federal government than it received in this year’s budget.

But, in recent years Saskatchewan has become a province of prosperity, and that is a good thing. A barrel of oil has gone from $40 to $70 per barrel. Uranium and potash has increased dramatically in price. These along with other factors have added a lot of money to the coffer of Saskatchewan. The amount of equalization payment Saskatchewan would have received three years ago would have been substantially higher.

The province of Saskatchewan received $878 million in new money in the 2007 Budget, which was just passed in Parliament. That’s more than $800 for every man, woman and child in the province. It is also more than the $800 million Premier Calvert was planning to use his way had non-renewable resource revenues been excluded from the equalization formula. Simply put, Premier Calvert was demanding $800 million. The people of Saskatchewan received $878 million.

Through the 2007 Conservative Budget, Saskatchewan has come out ahead. The increase in transfers to Saskatchewan this year was $2.34 per person. The transfer to Quebec was $0.91 per person. A lot of the money went directly to the people of this province and wasn’t money the Premier could manipulate.

Premier Calvert thought that by throwing a temper tantrum when he went to meet the Prime Minister, that he might be able to manipulate him into giving our province a special deal. That tactic worked with Paul Martin when used by the Newfoundland premier, but our present Prime Minister understood the principles at stake and did the right thing. Prime Minister Harper has ensured all Canadians, not just select regions, will benefit through tax credits, enhanced funding to existing programs and new money to all Canadian provinces.

Mr. Calvert wanted a pot of money with which to buy votes in the upcoming provincial election. Thankfully, Stephen Harper didn’t play his political game.

Stephen Harper acted on principle when it came to resolving fiscal imbalance between the provinces. All Canadians can be pleased he did or we would have a big mess right now.