New Atlantic Deal More Than Fair

[Keepitsimple]

Every now and then, the Star surprises me......here is today's Toronto Star Editorial.

Link: http://www.thestar.com/comment/article/224596

New Atlantic deal is more than fair

................

Martin's deals, dubbed the Atlantic Accords, so angered Ontario premier Dalton McGuinty that he launched his campaign for a "fair share" for Ontario. McGuinty was right to be miffed. While Ontario was struggling to meet the costs of health care, education and other programs, Martin was diverting revenues collected from Ontario taxpayers to boost equalization transfers to the two Atlantic provinces, which were reaping big windfalls for their offshore oil and gas. When Harper was elected, he vowed to come up with a new deal for the provinces based on sound principles as opposed to special deals. Principle demanded at the very least that Ottawa should give the two "have" provinces, Ontario and Alberta, the same per capita grant for health care and post secondary education as other provinces received. And principle demanded that equalization payments to the "have not" provinces should be awarded on the basis of true need, not on the basis of an arbitrary arrangement that pretended the two Atlantic provinces did not benefit from having off or gas revenues.

To his credit, Harper came up with a new deal that was both principled and fair. He followed the advice of a blue ribbon task force, which concluded that fairness demanded one half of provincial resource revenues be counted in a new, richer equalization formula. But Harper didn't stop there. In a bid to placate Newfoundland and Nova Scotia, he offered them another choice. They could avoid having to count any oil and gas revenue in the calculation of their equalization entitlements if they also agreed to stick to the old equalization formula that was in effect when the Atlantic Accords were signed. In offering this option, Harper was trying to hive off the worst excesses of the original accords, which guaranteed the provinces would also benefit fully from any enrichment in equalization over time.

..............

[scribblet]

http://www.thestar.com/comment/article/224596 this it?

Martin's deals, dubbed the Atlantic Accords, so angered Ontario Premier Dalton McGuinty that he launched his campaign for a "fair share" for Ontario. McGuinty was right to be miffed. While Ontario was struggling to meet the costs of health care, education and other programs, Martin was diverting revenues collected from Ontario taxpayers to boost equalization transfers to the two Atlantic provinces, which were reaping big windfalls for their offshore oil and gas.

[Michael Bluth]

The Globe and Mail also chimed in supporting Harper.

No doubt so will the National Post and the Sun.

The GTA will have the Conservative's backs on this one.

So sorry Rodney.

[Topaz]

Yes, the Star said all. Harper came up with a NEW DEAL because he didn't want to honour the original. Its like a parent saying to their 10 kids, I'll give you a $ day and when some of those kids go out and make more $$$ for themselves, do you say ok, you have more than the rest of your Bros. and sisters so I have to cut you off!! A promise is a promise and that is the main problem Harper has and now people will not trust him to what he says! The Reform and the Alliance always complained it was always a Easterner that was the PM, well now the west knows why!!!!

[Argus]

Yes, the Star said all. Harper came up with a NEW DEAL because he didn't want to honour the original. Its like a parent saying to their 10 kids, I'll give you a $ day and when some of those kids go out and make more $$$ for themselves, do you say ok, you have more than the rest of your Bros. and sisters so I have to cut you off!!

Are saying the Martimes are a bunch of irresponsible kids who shouldn't be trusted with complicated things like - er, voting?

Here's a clue - parents stop giving their kids an allowance at some point. What Williams and the others are after is an allowance forever no matter how much they make in their jobs.

[Canuck E Stan]

Yes, the Star said all. Harper came up with a NEW DEAL because he didn't want to honour the original. Its like a parent saying to their 10 kids, I'll give you a $ day and when some of those kids go out and make more $$$ for themselves, do you say ok, you have more than the rest of your Bros. and sisters so I have to cut you off!! A promise is a promise and that is the main problem Harper has and now people will not trust him to what he says! The Reform and the Alliance always complained it was always a Easterner that was the PM, well now the west knows why!!!!

One little issue you forgot in your analogy,

the $ the parent is giving to some of the kids comes from their brothers and sisters . Is that fair?

[kimmy]

I think the editorial's repeated use of the phrase "have their cake and eat it too" is very applicable to this situation.

The new equalization formula wasn't in place when the "Atlantic Accord" was made. Participating in a newer and far more generous formula wasn't part of what Paul Martin promised them.

Giving them the option of either participating in the new formula, or keeping their natural resource revenue and operating under the old formula, is entirely fair. They can have exactly what Paul Martin promised them, if they choose to.

If one wants to apply little kid analogies to these two premiers, I would say that these two have been offered a choice between cake and ice cream, and are having a temper tantrum because they're not allowed to have cake and ice-cream.

-k

{and what are they threatening Harper with? Nova Scotia and Newfoundland consistently vote Liberal anyway.}

[BC_chick]

Again, as "right" as he may be, Harper should've thought of all these things BEFORE making false promises.

Therein lies the problem.

If you are a supporter of his decision, can you provide a good reason for making false promises if this deal is so fair because of xyz?

I'll start... I think it was nothing but opportunist and short-sighted vote buying.

[noahbody]

If you are a supporter of his decision, can you provide a good reason for making false promises if this deal is so fair because of xyz?

I'll start... I think it was nothing but opportunist and short-sighted vote buying.

I'll debate that with you. Just what do you consider false promises?

As far as your comment about it being "opportunist and short-sighted vote buying," I'd say that is a better characteristic of the Atlantic Accord. The promise of the Accord was made on the campaign trail to buy votes and counter Harper's stance that the Atlantic provices deserved a better deal. Was the Atlantic Accord short-sighted? Apparently. Agree?

The hatred of Harper by the Atlantic provinces over this issue is a little ironic in that Harper, in opposition, was actually the catalyst behind the Atlantic Accord as well.

[Michael Bluth]

I'll debate that with you. Just what do you consider false promises?

There is the rub.

There is and was no false promise.

Harper vowed to respect the Atlantic Accord.

He left it up to the Premiers. If they want to keep the Atlantic Accord they can.

If they want to accept a cap, they can take another deal.

[Keepitsimple]

Nova Scotia and Newfoundland DO have a leg to stand on - but it is a technical one and to my mind, is not a genuine or morally correct one. I'm including the text of the entire Accord below - and a link. If you read it in it's entirety, you can clearly see that it was written entirely by Danny Williams and his crew - and then signed by Ottawa. This happened at a time where Paul Martin was desperately trying to hold onto any votes and seats that he could - so he caved in and sold the farm. It was tantamount to blackmail and was not in the best interests of Canada. As I see it, here is the contentious statement in the Accord:

4. 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, and the Equalization payment for the province in that year under the Equalization formula as it exists at the time, net of any payments made with respect to the existing Atlantic Accord or Equalization offset provisions.

This statement appears to allow for future adjustments to Equalization....but the reality is that Harper went about re-working the entire Equalization formula in an attempt to make it more fair and principled to ALL provinces. This is not an "adjustment".

Arrangement between

the Government of Canada and

the Government of Newfoundland and Labrador

on Offshore Revenues

The Government of Canada recognizes the unique economic and fiscal challenges faced by Newfoundland and Labrador and the strong commitment of the province to improve its fiscal situation, as outlined in the correspondence received from Newfoundland and Labrador.

1. Recognizing that the obligations intended to be assumed by the Government of Canada, as outlined in this document, will require legislation, the Government of Canada will seek legislative authority from Parliament that will authorize additional payments to provide 100 per cent offset against reductions in Equalization payments resulting from offshore resource revenues.

2. This document reflects an understanding between the Government of Canada and the Government of Newfoundland and Labrador that:

Newfoundland and Labrador already receives and will continue to receive 100 per cent of offshore resource revenues as if these resources were on land;

the Government of Canada intends to provide additional offset payments to the province in respect of offshore-related Equalization reductions, effectively allowing it to retain the benefit of 100 per cent of its offshore resource revenues1 .

3. Given that, under the new Equalization framework agreed at the October First Ministers’ Meeting, Equalization payments are determined for 2004-05 and 2005-06:

For the fiscal year 2004-05, the value of the additional offset payment to provide this 100 per cent offset will be $133.6 million.

For the fiscal year 2005-06, the value of the additional offset payment to provide this 100 per cent offset will be $188.7 million.

4. 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, and the Equalization payment for the province in that year under the Equalization formula as it exists at the time, net of any payments made with respect to the existing Atlantic Accord or Equalization offset provisions.

5. If in any fiscal year in the period 2006-07 to 2011-12 the province does not qualify for receipt of an Equalization payment, no additional offset payment in respect of clause 4 will be made for that fiscal year beyond the payment specified in the existing Atlantic Accord. The province will also be provided benefits equal to what it would have received if Part 1 of the Equalization offset provision of the Atlantic Accord had been extended to include the year 2011 12, should the province not qualify for Equalization in that fiscal year.

6. It is the Government of Canada’s intent to provide the Government of Newfoundland and Labrador a payment equal to $2.0 billion upon passage of legislation implementing this arrangement. This payment will allow the province to reduce its outstanding debt. Amounts calculated starting in 2004 05 under clauses 3 and 4 will not result in actual payments to the province until such time as their cumulative value exceeds $2.0 billion.

7. A successor arrangement would be put in place for the period 2012-13 to 2019-20 if the province qualifies for an Equalization payment in 2010 11 or 2011-12 and its per capita debt servicing charges have not become lower than those of at least 4 other provinces.

Payments would continue to be calculated to provide 100 per cent offset for Equalization declines, as per clause 4, in any year in which Newfoundland and Labrador would qualify for Equalization.

Should the province not qualify for an Equalization payment in any year in the period 2012-13 to 2019-20, the province would receive, in that year, an offset payment equal to two-thirds of the previous year’s offset payment and an offset payment equal to one-third of that previous year’s payment in the following year, should it continue not to qualify for Equalization.

8. No later than March 31, 2019, the parties agree to review the current arrangement.

The review will address a) the extent to which the Atlantic Accord objectives have been achieved, including the key objectives of the Atlantic Accord that Newfoundland and Labrador be the principal beneficiary of its offshore; whether Newfoundland and Labrador has realized lasting fiscal and economic gains from its offshore petroleum resources revenues; c) the Equalization arrangements then in effect; d) the fiscal disparities that then exist between Newfoundland and Labrador and other provinces; e) Newfoundland and Labrador’s undeveloped offshore petroleum discoveries; and will have regard to the 1987 Canada-Newfoundland Atlantic Accord Implementation Act, any legislation that implements the terms of this arrangement, and any other relevant considerations.

9. If, in the future, the Government of Canada enters into an arrangement with another province or territory concerning offshore petroleum resource revenues, which in Newfoundland and Labrador’s view provides, on balance, benefits greater than those contained in this arrangement, Newfoundland and Labrador may elect to enter into discussions with the Government of Canada to revise this arrangement.

10. Signed in St. John’s on February 14, 2005.

For the Government of Canada

________________________________________

The Honourable John Efford,

Minister of Natural Resources, Canada

Link: http://www.gov.nl.ca/atlanticaccord/agreement.htm

[JerrySeinfeld]

OK I haven't been following this very closely because over time the whining from the Atlantic provinces just starts sounding like noise.

But if I get this right, the Atlantic provinces get money from their O&G revenues which, if included in the calculation of equalization payment would reduce the amount of money they get from Ottawa?

So - if this is the case - they're pissed because oil and gas riches will reduce the amount of welfare they get?

What planet are these people from?

[NovaScotian]

Are saying the Martimes are a bunch of irresponsible kids who shouldn't be trusted with complicated things like - er, voting?

Here's a clue - parents stop giving their kids an allowance at some point. What Williams and the others are after is an allowance forever no matter how much they make in their jobs.

From the look of the equalization projections Newfoundland will not need equalization beyond 2011-2012. Nova Scotia, well it will be longer(we don't have as much oil and gas as NFLD.) Hopefully by 2020 we will not need it either.

Here are equalization payments past and projected.

NFLD

1998-99 1,068m

1999-00 1,169m

2000-01 1,112m

2001-02 1,056m

2002-03 862m

2003-04 753m

2004-05 726m

2005-06 n/a

2006-07 632m

2007-08 477m

2008-09 197m

NS

1998-99 1,221m

1999-00 1,290m

2000-01 1,404m

2001-02 1,316m

2002-03 1,111m

2003-04 1,120m

2004-05 1,146m

2006-07 1,386m

2007-08 1,308m

2008-09 1,294m

source: http://www.fin.gc.ca/FEDPROV/eqpe.html and mapleleaf web.

So it is not as if equalization in these two provinces are spiraling out of control and although Nova Scotia remains a little sluggish, NFLD is doing a good job.

[normanchateau]

One little issue you forgot in your analogy,

the $ the parent is giving to some of the kids comes from their brothers and sisters . Is that fair?

Just like the 4.8 billion dollar handout that Harper promised Quebec came from Quebec's brothers and sisters:

http://billtieleman.blogspot.com/2007/03/b...ote-buying.html

[BornAlbertan]

Anyone ever thought that a lot of the fiscal problems in the Maritimes could be resolved by not having so many provinces? I mean, think of the waste created from having so many levels of government for 2,324,833 people!!! Despite our geographical diversity, why is there even a PEI, NFLD, NS or NB. Merge the resources. Natural, political and human.

The only reason to be against this would be the preservation of "culture"...which is an expensive thing to preserve and is unfair to expect the rest of Canada to have to pay for it because you yourself can't.

[guyser]

Anyone ever thought that a lot of the fiscal problems in the Maritimes could be resolved by not having so many provinces? I mean, think of the waste created from having so many levels of government for 2,324,833 people!!!

Kind of like merging Alta, Man, and Sask since there is only 5.384 M people there. That way Sask and Man can be richer.

The savings would be huge and the profits even richer.

[Guest chilipeppers]

I'll debate that with you. Just what do you consider false promises?

There is the rub.

There is and was no false promise.

Harper vowed to respect the Atlantic Accord.

He left it up to the Premiers. If they want to keep the Atlantic Accord they can.

If they want to accept a cap, they can take another deal.

Right I don't get it as they are getting a better deal here. They sure do want their cake and eat it too.

[BornAlbertan]

Anyone ever thought that a lot of the fiscal problems in the Maritimes could be resolved by not having so many provinces? I mean, think of the waste created from having so many levels of government for 2,324,833 people!!!

Kind of like merging Alta, Man, and Sask since there is only 5.384 M people there. That way Sask and Man can be richer.

The savings would be huge and the profits even richer.

You obviously missed my point.

It is not about spreading the wealth as would obviously be the case in your example. It would be about minimizing overhead to maximize revenues in a part of Canada which really does not have anything diverse enough to warrant or sustain such inefficient means of management of such small populations.

[guyser]

You obviously missed my point.

It is not about spreading the wealth as would obviously be the case in your example. It would be about minimizing overhead to maximize revenues in a part of Canada which really does not have anything diverse enough to warrant or sustain such inefficient means of management of such small populations.

I dont think I missed anything.

The same can be said for the "west" or prairie provinces, minimize overhead, max revenues etc.

I guess my point is that down east, they have pride in the respective provinces, the same if not more so than the RoC and the idea most certainly would not fly, just like it wouldnt in the prairies.

[BornAlbertan]

You obviously missed my point.

It is not about spreading the wealth as would obviously be the case in your example. It would be about minimizing overhead to maximize revenues in a part of Canada which really does not have anything diverse enough to warrant or sustain such inefficient means of management of such small populations.

I dont think I missed anything.

The same can be said for the "west" or prairie provinces, minimize overhead, max revenues etc.

I guess my point is that down east, they have pride in the respective provinces, the same if not more so than the RoC and the idea most certainly would not fly, just like it wouldnt in the prairies.

Let's go the other way then. How prosperous do you think Ontario would be if it were split into chunks which separated its major industries and then placed bureacritic red tape in between them due to variants in legislation? Or imagine Alberta it it were broken up. The geographics of the maritimes does not support any form of sustainability of their current layout.

If a company is not suviving without handouts and bailouts, it has to restructure.

Down east it might not fly....but what happens when Alberta and Ontario finally say enough of this shit?

[guyser]

Let's go the other way then. How prosperous do you think Ontario would be if it were split into chunks which separated its major industries and then placed bureacritic red tape in between them due to variants in legislation?

Well, if it were Southern Ontario , then we would be richer than hell . Richer than Alberta too.

Down east it might not fly....but what happens when Alberta and Ontario finally say enough of this shit?

I dont see that happening. The maritimes have their problems no doubt, but I cannot see what you propose coming to fruition.

[geoffrey]

I guess my point is that down east, they have pride in the respective provinces, the same if not more so than the RoC and the idea most certainly would not fly, just like it wouldnt in the prairies.

Who should be paying for their feelings of pride?

[jdobbin]

{and what are they threatening Harper with? Nova Scotia and Newfoundland consistently vote Liberal anyway.}

Do they? I count three Conservative MPs in Newfoundland. There were three in Nova Scotia.

I suppose the Tories have enough MPs that they can lose them all.

[geoffrey]

Most Newfoundlanders I know are smarter than to be jostled around by Danny Williams. They understand the deal at hand, they'll obviously like it because they get more.

[jdobbin]

I'm not surprised at the Toronto media's reaction to the Accords, etc.

It certainly hasn't translated into popular support for the Tories in Ontario though given the last Decima poll.

Here is what the latest study says the deal will cost the Maritimes.

http://www.ctv.ca/servlet/ArticleNews/stor...?hub=TopStories

Meanwhile, a study released Wednesday predicted Ottawa's new equalization formula could cost the Atlantic provinces $4 billion in payments over the next 13 years.

The Atlantic Provinces Economic Council, a Halifax-based think tank, concluded that Nova Scotia, New Brunswick and Prince Edward Island will receive additional money early on, but will lose out in the long run.

Nova Scotia, according to the study, will miss out on $1.4 billion by the 2019-2020 fiscal year. New Brunswick will lose $1 billion and P.E.I. will come out with $196 million less than if Ottawa left the program as is.

Newfoundland will lose $654 in the first two years and $1.4 billion overall, the study projects.

The authors of the study say Newfoundland and Nova Scotia would be better off remaining under the current formula and the 2005 Atlantic Accords -- but they go on to say that the budget goes against those earlier agreements.