Wednesday, January 17, 2007

Quebec In The Balance

You know there's an election in the offing when the government of the day bribes Quebec with the rest of Canada's money:

The federal government is facing a backlash from some provinces over a report it plans to change the formula for equalization payments, with Saskatchewan's finance minister calling it an "absolute betrayal" of a Tory campaign promise.

In the last two election campaigns, Prime Minister Stephen Harper and his Conservatives pledged to exclude natural resource revenue from the federal program that gives to poorer provinces to help narrow the gap between "have" and "have-not" regions.

But the CBC's French-language network reports the government will renege on that pledge in its next federal budget, expected in March. Radio-Canada said Harper instead plans to follow the recommendation of a federal task force by including 50 per cent of the natural resource revenue when calculating a province's wealth.

If Harper makes the move, it would mean big losses in equalization payments to provinces like Newfoundland and Labrador and Saskatchewan.


Saskatchewan Finance Minister Andrew Thomson said his oil-producing province stands to lose up to $800 million next year under this plan.

"It's clear what they are trying to do is buy Quebec votes with Western oil. And I think that is a very dangerous game to be playing. This is not the way that Confederation should work," Thomson said.

The Ottawa syndrome strikes everyone there, even Stephen Harper. When you can see Quebec from for your office window, its parochial concerns take on exaggerated importance.

People in Ottawa seem to forget that the political equation that balanced Confederation for so long no longer applies. The Bloc Quebecois is now firmly entrenched as the party of Quebec, and the Tories and Grits can do no more than pick around the edges of its support.

The West, on the other hand, has shown an incredible political volatility as the incubator of protest parties. Stephen Harper, of all people, should know that.

It is no longer possible to buy a majority government in Quebec. But it is possible to lose a minority government in the West.

It would be a shame to see the equalization plan become this government's version of the CF-18 contract to Canadair.

Source: CBC


Canadian Patriot said...

You make a good point on maintaining the favor of the base in the west, but there is a bigger picture!

What the hell is the PM to do? There is a bigger picture here, and the problem is that Canadians love to bitch and complain.

If the west doesn't realize that if PM Harper doesn't renege on this particular item, you are going to end up with a Liberal government that will do alot worse.

Do you want an elected senate? Do you want a unified Canada? If you answer yes to either of these questions, then you and the West needs to stop being so goddamn selfish and look at the long term possibilities of where this government could take us.

The Liberal machine doesn't want to give the west a voice. Harper does, and this is the price.

wilson61 said...

Government revenues from oil & gas are Royalties.
A percentage of the price per barrel extracted.
Sask lowered their Royalties to between 5 and 20% (old finds-new finds & price sensitive) and offers up to 50% tax incentives, to Oil Companies, to compete with Alberta's low Royalties.

All the provinces have the ability to increase/decrease the Royalties/tax incentives that Oil Companies have to pay.
( Provinces also have the sale of lease lands, a competition amongst Oil Companies to purchase)

Maybe the Provinces should standardize their Royalties and incentives, instead of competing with each other to lure Oil Companies, to offset the equalization formula.

(not sure how it works for offshore)

Okay, I'm saying Provinces should download onto the Oil Companies.
I don't know how competitive that leaves Canadian Oil Producers.
Just a thought.