Constitution says Offshore resources belong to the Federal Government

[geoffrey]

Agreed. I just figured Albertans would side with the maritimes on this one...that is to say, that resources should be excluded. I know it doesn't matter now because you are not receiving equalization, but in principle, how do you feel about resources being included?

In principle, they should be excluded. They are the inherent wealth of the province, can only be used once, hopefully to diversify.

edit: I'm still confused on whether they are included or not

50% are included now. Previously, they were not.

"Under the new Equalization program, provinces will get the greater of the amount they would receive by fully excluding natural resource revenues, or by excluding 50% of natural resource revenues."

Exactly why the Atlantic Accord wasn't violated. The Maritimes can choose what works best for them! Saskatchewan gets a bad deal though, they are pitied as much as the Maritimes so they'll be left out to dry.

[gc1765]

Exactly why the Atlantic Accord wasn't violated. The Maritimes can choose what works best for them! Saskatchewan gets a bad deal though, they are pitied as much as the Maritimes so they'll be left out to dry.

Why can't Saskatchewan make the same choice? That seems to be what the government website is saying:

"Under the new Equalization program, provinces will get the greater of the amount they would receive by fully excluding natural resource revenues, or by excluding 50% of natural resource revenues."

Link

edit:...and how would provinces get more money by excluding resource revenues?

[gc1765]

In principle, they should be excluded. They are the inherent wealth of the province, can only be used once, hopefully to diversify.

To play devil's advocate, pretty much any industry is "non-renewable" in a sense. Alberta may run out of oil and need to diversify...but in 100 years cars could be obsolete and Ontario car makers may need to diversifty.

[gc1765]

I think this answers most of my questions (finally!):

"During the election campaign, the Conservatives promised to take non-renewable resources like oil and gas out of the equalization formula — a change Calvert said would mean an extra $800 million a year for provincial coffers.

The March 19 budget did remove oil and gas from the formula, but added a cap on equalization payments. As a result, Saskatchewan is getting $226 million this year and nothing next year."

Link

[Figleaf]

Don't maritime provinces have jurisdiction to a certain amount of miles off their coasts? Like countries do?

Interesting point. There is a frequent assumption that provincial powers end at the shoreline. However, upon looking at the Constitution, I saw nothing that specifies that. It seems equally plausible that the division of federal and provincial powers would continue to apply within Canadian territorial waters.

[geoffrey]

Why can't Saskatchewan make the same choice? That seems to be what the government website is saying:

"Under the new Equalization program, provinces will get the greater of the amount they would receive by fully excluding natural resource revenues, or by excluding 50% of natural resource revenues."

It looks like they can choose.

edit:...and how would provinces get more money by excluding resource revenues?

It lowers their tax revenues compared to the average of those 5 I mentioned before. The great the difference, the greater the collection.

[jbg]

That is a good point. All other provinces were granted huge land tracts with plenty of natural resources(oil, gas, hydro, mineral wealth, etc) while the Maritime provinces remained small and since offshore resources were under federal jurisdiction it hindered the ability of the provinces to generate funds.

Manitoba has oil?

[NovaScotian]

Manitoba has oil?

No, not large quantities, but it does have hydro power, mineral wealth, vast stretches of arable land and lumber.

[gc1765]

edit:...and how would provinces get more money by excluding resource revenues?

It lowers their tax revenues compared to the average of those 5 I mentioned before. The great the difference, the greater the collection.

Oops I meant to say how would provinces get more money if they included their resource revenues. IOW, why would a province choose to have 50% of resource revenues included? The closest answer I could come up with is that under that method, they would have a cap? I think the article mentioned something about Saskatchewan being capped at $200 million, where they would have received $800 million if resources were excluded and no cap?

[geoffrey]

Oops I meant to say how would provinces get more money if they included their resource revenues. IOW, why would a province choose to have 50% of resource revenues included? The closest answer I could come up with is that under that method, they would have a cap? I think the article mentioned something about Saskatchewan being capped at $200 million, where they would have received $800 million if resources were excluded and no cap?

Caps would obviously limit payouts. They don't really make sense in an equalisation formula, if one should exist.

Generally, have-not resource provinces will always be hurt by resource inclusion. The only province that really benefits is Alberta ironically, and Ontario to a lesser extent.

Alberta benefits because everyone else gets less, so they have less of a net transfer. Same with Ontario. Quebec slightly benefits as they become closer in poverty to the now richer Maritimes, meaning they get some of the Maritimes money.

[jbg]

Alberta benefits because everyone else gets less, so they have less of a net transfer. Same with Ontario. Quebec slightly benefits as they become closer in poverty to the now richer Maritimes, meaning they get some of the Maritimes money.

Sounds like quite the race to the bottom?

[Mad_Michael]

Don't maritime provinces have jurisdiction to a certain amount of miles off their coasts? Like countries do?

No. Off-shore jurisdiction falls to the Federal level since coastal water doesn't respect provincal boundries. Coastal waters have always been under federal jurisdiction in respect of fisheries, coast guard, navy, etc. under the BNA.

Issues of coastal and off-shore jurisdiction fall under the realm of international law, a field to which no Province may claim to. International law is federal jurisdication by definition.

[geoffrey]

Alberta benefits because everyone else gets less, so they have less of a net transfer. Same with Ontario. Quebec slightly benefits as they become closer in poverty to the now richer Maritimes, meaning they get some of the Maritimes money.

Sounds like quite the race to the bottom?

Oh it is. The faster you trash your economy, the faster you can use other jurisdictions taxes to do what you please. It's nice how the more your economy goes into the hole, the less accountable you are for your governmental activities.