Released on March 7, 2005
Saskatchewan today requested that the Senate support our bid to create a Saskatchewan Energy Accord. Such an Accord will allow our province to fully retain its resource revenues, similar to the offshore agreement recently signed with Newfoundland and Labrador and Nova Scotia."In our submission, we tried to clearly demonstrate why Saskatchewan must be given the same opportunities as Nova Scotia and Newfoundland and Labrador were granted recently by the federal government," Van Mulligen said. "By retaining our resource revenue we will be able to reinvest in our province and make our economy grow, thus enabling us to continue to be a 'have' province."
Van Mulligen was making Saskatchewan's presentation to the Canadian Senate in Ottawa. It is reviewing Bill C-24, which covers equalization payments for two fiscal years – 2004-05 and 2005-06.
Saskatchewan's presentation showed that prior to the 1982 changes to equalization, Saskatchewan was able to retain a large share of its energy revenues after the effect of equalization clawbacks. However, Saskatchewan is currently able to keep, on average, only about 10 per cent of its energy revenues after clawbacks. In some years our province loses more than it raises in energy revenues.
Under their new agreement with the federal government, Nova Scotia, Newfoundland and Labrador are guaranteed to retain 100 per cent of their energy revenues. This will provide an estimated $1.1 billion and $2.6 billion respectively over the next eight years.
"Clearly the equalization program is flawed," Van Mulligen said. "We estimate that if Saskatchewan would have received the same deal, over the last 10 years we would have benefited by $4 billion. The federal government needs to address this inequality and immediately start negotiating a Saskatchewan Energy Accord."
In his presentation Saskatchewan's Finance Minister pointed out how the current Equalization program does not meet the federal constitutional commitment to ensure that all provinces can deliver reasonably comparable levels of public service at reasonably comparable levels of taxation, and must be reformed.
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| Mike Woods Finance Regina Phone: (306) 787-6578 |