Nova Scotia and Newfoundland and Labrador agree to work for offshore fiscal fairness

Premier Roger Grimes today announced that Newfoundland and Labrador will renew its efforts to seek its fair share of offshore resource revenues and will work with Nova Scotia Premier John Hamm to seek a better deal from the federal government.

Newfoundland and Labrador and Nova Scotia are not the principal beneficiaries of their respective offshore accords because of the clawback, or the tax back rate, Ottawa imposes on resource developments. Premier Grimes and Premier Hamm have both been publicly seeking a better deal from the federal government through the elimination/reduction of the clawback to retain a greater portion of offshore resource revenues. 

"For every dollar Newfoundland and Labrador makes in offshore oil revenues, we only keep 30 cents," said Premier Grimes. "This current arrangement makes it almost impossible for the province to get on its feet and eventually move from a �have not' to a �have' province status and contribute significantly to the national growth."

Premier Grimes said Newfoundland and Labrador has a longstanding position on seeking a fairer deal on resource revenues and he has been personally lobbying for the province's fair share. "Since becoming premier, I have been lobbying extensively for Newfoundland and Labrador's fair share of our offshore revenues," said Premier Grimes. "I have met with the Prime Minister of Canada, Finance Minister Paul Martin and Minister Brian Tobin on this issue."

"Newfoundland and Labrador is currently not getting its fair share of our own offshore resources and this arrangement must change," said Premier Grimes. "Our province must become the primary beneficiary of any revenues collected from the offshore so that as the revenues from our offshore oil and gas grow, the additional benefits will continue to flow to our province."

"We want a solution that will allow us to keep all our offshore revenues until our economy is at the national average," said Nova Scotia Premier John Hamm. "This kind of solution allows us to use our non-renewable offshore resources to make the transition to a diversified and sustainable economy." Premier Hamm said the two provinces simply want to follow the path used by other energy-rich provinces.

The two premiers pledged to develop a joint submission to the federal government on the principal beneficiary issue. They both believe Prime Minister Chr�tien is sympathetic to the principle of securing long-term economic change in the two provinces. Premier Hamm said the two provinces will also work together on assessing the economic impact of this issue on the Atlantic Region, which should help the provinces argue their case for action.

The premiers also acknowledged that although there are many similarities in the situation for each province, they may look for different solutions in some areas.
Premier Grimes added that this would enable the province to capitalize more fully on its opportunities in the resource sector, assisting Newfoundland and Labrador to further expand our economy and reduce the economic and fiscal disparities that currently exist between our province and the rest of Canada. 

Media contact: 
Carl Cooper, Office of the Premier, Government of Newfoundland and Labrador, (709) 729-3960
Dale Madill, Office of the Premier, Government of Nova Scotia, (902) 424-6600.

2001 08 15                                                           10:30 a.m.