Saturday, January 29, 2005

Offshore Deal

Late last night Prime Minister Martin and the Atlantic Premiers reached a deal over the months long offshore energy row. The dispute stems from equalization payments and the new found oil reserves off the Atlantic coast. The energy resources should fall under the control of the Federal Government. The Premiers have been demanding that they not only get all the oil money, but also continue to receive their massive equalization payments.

Last night's deal essentially involved the Prime Minister caving in every regard. Newfoundland.

Here's how it worked before last night's deal: for every dollar Newfoundland and Nova Scotia earned in offshore-oil revenue, they lost a dollar in equalization payments. But then Ottawa sent a cheque a rebate cheque, in effect to give them 30 cents for each of those lost dollars.

Martin's promise was to bump that 30 cents up to one dollar. For Newfoundland that would mean about $134 million for the 2004-05 fiscal year; for Nova Scotia, about $30.5 million.
So, Newfoundland and Nova Scotia are going to keep getting paid as if they're a poor province, even after they are making tons of money from offshore oil. The deal runs eight years, and by the end of that time Newfoundland and Nova Scotia are likely to be two of the wealthier provinces in the country.

Paul Martin has caved completely in the face of pressure. Crumpled like a deck of cards under pressure from the Conservatives. Equalization payments serve a purpose - to help provinces in need of financial assistance. They are not tool for political favours and gamesmanship. As a citizen of Ontario, one who's tax dollars will now be going to Newfoundland under the pathetic pretext of 'equalization', I'm livid. And every Canadian should be as well.

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