Equalization bickering continues after budget
Published Tuesday, March 20, 2007 11:10PM EDT
Last Updated Friday, May 18, 2012 5:54PM EDT
OTTAWA - One day after declaring a new era in federal-provincial harmony, Prime Minister Stephen Harper was beseiged Tuesday by angry governments and voters in five provinces that claimed to have been shafted by the federal budget.
And there was rising resentment in the aggrieved provinces that they were shortchanged in order to pay for a sweetheart deal for Quebec, the biggest beneficiary of federal largesse in Monday's budget.
That sentiment could intensify after Premier Jean Charest, struggling to survive a tight, three-way election battle in Quebec, announced Tuesday that he'll use his province's additional equalization money to cut taxes by $700 million.
Saskatchewan Premier Lorne Calvert, whose province is slated to get "a big fat zero" in equalization next year, appeared dumbfounded that Charest would flaunt his good fortune. Visibly agitated, Calvert said he'd just heard about Charest's tax cut and would "probably get warmed up" about it later.
But he said it's clear the budget - which promised the provinces $39.4 billion over seven years for equalization, post-secondary education, the environment, infrastructure and manpower training - was designed to curry favour in the country's two largest provinces, at the expense of the rest.
"Everyone in the country is concluding that what the prime minister was doing in the budget yesterday was trying to win himself an election. Where does he need to win seats? He needs to win seats in Central Canada, Ontario and Quebec," Calvert said in an interview.
"What we've got here is a prime minister so bent on his partisan agenda that he's willing to throw out - throw out - a promise made to the people of Saskatchewan and, by the way, to other Canadians."
Calvert, Nova Scotia Premier Rodney MacDonald and Newfoundland and Labrador Premier Danny Williams all claim Harper has effectively reneged on a promise shield their provinces' oil and gas revenues from being clawed back through reduced equalization payments.
Williams, a Conservative, is so incensed he's urging Newfoundlanders to vote against his federal counterparts.
"We're certainly going to encourage people in the province not to put any Conservative members in to support a Harper government," he said in an interview.
New Brunswick Premier Shawn Graham had different concerns about the equalization formula but the same bottom line complaint: His province, with a net gain of $26 million, didn't get as much as it had hoped.
British Columbia's revenue minister has also complained that his province got a relatively small infusion of cash compared with that doled out to Quebec.
Even Ontario's Dalton McGuinty is not entirely happy that the budget only goes part way towards resolving his longstanding complaint that Ontario has been shortchanged on other cash transfers to the provinces. Noting that it will have to wait until 2014 for a full per capita share of health transfers, McGuinty observed that "justice delayed is justice denied."
Finance Minister Jim Flaherty acknowledged at one point Tuesday that "there are a few provinces that are grumpy" about his budget. But his casual dismissal of their concerns only further enraged some premiers.
"Grumpy would be an understatement," said Williams. "We're very disappointed at being betrayed."
MacDonald was similarly annoyed: "Am I grumpy? Yes, and I should be grumpy."
Voters grumpy too
There were signs Tuesday that voters in the aggrieved provinces are grumpy too - a potentially ominious sign for Harper who is struggling to turn his minority into a majority in an election which could come as early as this spring.
A straw online survey conducted by St. John's radio station VOCM asked Newfoundlanders if they're happy with the Harper government's second budget. A resounding 83 per cent said no.
And some of the comments from respondents were blistering.
"(Newfoundland) got about what I expected from the PM who always despised Atlantic Canada. Now he doesn't have to be nice to us, he's bought a new best friend, Quebec," said one.
"Is Ottawa the capital or is it Quebec?" queried another.
"Maybe we should threaten to separate from Canada. It's working for Quebec."
"How many times do we have to get kicked in the teeth to realize that being a part of Canada just doesn't work?"
In a similarly unscientific online survey conducted by Saskatoon radio station CKOM, 61 per cent of respondents said they wouldn't vote for the Conservatives because they broke their promise on equalization. Another 32 per cent said Harper didn't break his promise and that the issue wouldn't effect how they vote.
In the Commons, Liberals tried to drive the regional wedges deeper.
Labrador MP Todd Russell said all his constituents got out of the budget was a series of "goose eggs" and he accused the senior minister from Newfoundland, Loyola Hearn, of political impotence.
Regina MP Ralph Goodale said Harper's failure to honour his promise to shield Saskatchewan's resource revenue amounts to "the biggest sucker punch since Todd Bertuzzi." He accused the government of treating the people of Saskatchewan with "utter contempt."
For his part, Harper accused Williams of getting his facts wrong. He noted that the budget allows Newfoundland to stick with the existing equalization regime if it chooses for up to 13 years, with no change to the separate accord which shields the province's off-shore resource revenues from clawbacks.
Hearn, the federal fisheries minister, said the budget allows Newfoundland to stick with the status quo while giving it time to negotiate a better deal in future. He added that he and the two other Newfoundland MPs are "always looking for something better for our province."
And Harper maintained that Saskatchewan will receive the "largest per capita" increase in equalization benefits. He was presumably referring to this year only, when the province's equalization payment will be capped at $226 million. Budget documents indicate Saskatchewan is in line for zero next year.
"The truth is that the Saskatchewan government just got the best deal that any Saskatchewan government ever had in history from this government," Harper boasted.
University of Saskatchewan political scientist John Courtney predicted Harper will emerge essentially unscathed from the budget furor. He doubted the premiers' complaints will resonate with average folks because the so-called fiscal imbalance debate is too complicated to be easily understood.
"There's no grabber here," Courtney said, adding that in Saskatchewan, Calvert's sniping looks like desperation by an unpopular premier who must go to the polls this year.
However, Don Desserud, political scientist at the University of New Brunswick in Saint John, said fed-bashing by premiers does resonate, even if voters don't understand all the ins and outs of the issue.
Desserud said Harper appears to be calculating that he can win a majority as long as he gains more votes in Ontario and Quebec than he loses in the West or Atlantic provinces. But he said Harper can ill-afford to kiss off the Tories' 12 seats in Saskatchewan or their nine in the Atlantic provinces.
"I think he's making a big mistake here . . . I think he has to think of every seat as something precious."