Friday, January 30, 2009

I have no idea what Danny Williams wants.

I read through the federal budget to try and understand what Danny Williams of Newfoundland and Labradour has a problem with. He has called on all the Liberals MPs from the province to vote against the budget - this would be an interesting task given that Ignatieff is no Dion and will expect his MPs to vote for the budget.

They seem to be claiming that the federal budget will cost the province $1.5 billion dollars over the next three years. Liberal MPs Judy Foote and Scott Andrews are planning on voting against the budget if there is no change.

I am trying to understand on what basis Newfoundland can claim the massive shortfall. I have read through the 1985 Atlantic Accord and it was written completely to the benefit of Newfoundland over all other Canadians. Even when Newfoundland becomes better off than other provinces, the Federal government continues to foot the bill. Basically Newfoundland continues to get the federal share of revenues from the offshore oil even when it has reached parity with the rest of Canadians.

The 2003 Crosbie White Paper covers things in some detail, though I have real problems with much of the math. Though my favorite line from the white paper is Newfoundland is unlikely to ever become a self sufficient province within the Canadian federation. It simply reflects the state welfare mindset of the province. Countries and places with less resources have managed to develop their economies. Crosbie assumed that Newfoundland would still be getting equalization payments in 2012 when the Atlantic Accord ends.

Newfoundland now has the second highest GDP in Canada - it has risen dramatically over the last ten years, as recently as 2003 it was towards the bottom of the ranks in Canada. Newfoundland has a bigger economy than New Brunswick and will shortly pass Nova Scotia.

The Crosbie white paper came out in 2003 when Newfoundland still looked like it was a lifetime away from parity with the rest of the country.

As to the $1.5 billion loss, I fail to see how they are coming up with this number. The province will still be getting $1.2 billion of federal revenues over the next three years, more than was projected as the potential total government revenues from offshore oil.

I am rather disgusted at this purely greedy action by Newfoundland.

John Ivison of the National Post has a good column on some these things.
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