Finance Minister to present to Expert Panel on Equalization and Territorial Formula Financing

Loyola Sullivan, Minister of Finance and President of Treasury Board, will present to the Expert Panel on Equalization and Territorial Formula Financing on Friday, October 28 at a meeting in Quebec City.
The federal government announced in October 2004 that an independent expert panel would review how the legislated equalization and territorial formula financing should be allocated among provinces and territories.

The premise of equalization is that provinces should be able to provide comparable levels of services with comparable levels of taxation. However, Minister Sullivan explained that the inadequacies of the equalization program over the years have forced this province to borrow more and more money to offer comparable services to the people of Newfoundland and Labrador, thereby adding to the province�s debt levels.

�Our province has been working hard to offer comparable services at comparable taxation levels, but with the inadequate federal transfers it means we continue to add to our debt to do so. As a result, we have a debt of approximately $12 billion, and on a per capita basis, it far exceeds any other province,� said the minister. �Furthermore, no other province faces the geographic program delivery challenges as we do. We are trying to control the rising costs of offering needed programs and services, but with a relatively small population dispersed over a wide geographical area, we are in a unique situation.�

�We want the federal government to have an adequate equalization program which provides provinces with the necessary funding to provide comparable levels of programs and services. Equalization is a constitutionally required program, and we want the program to be able to fulfill that commitment,� explained Minister Sullivan.

Media contact: Diane Keough, Communications, (709) 729-6830, 685-4401

2005 10 27                            2:15 p.m.