The Government of Newfoundland and Labrador has not signed onto any new equalization deal, including the side deal reached between the Government of Nova Scotia and the Federal Government. The Honourable Danny Williams, Premier of Newfoundland and Labrador, said today that people should understand that his government has never sat down and negotiated nor signed onto any agreement with the Federal Government.

"What we have here is a situation whereby the Federal Government made unilateral changes to equalization, a program that they design and administer, and our government is forced to make decisions accordingly," said Premier Williams. "In this year�s budget, the Federal Government made unilateral changes to both equalization and the Atlantic Accord. The result is that our government has no choice but to select one of the options they presented to us, despite Accord agreements with two previous Federal Governments. Obviously, when the time comes in March 2008 to make that decision, we will choose the formula that yields the most financial benefit for Newfoundlanders and Labradorians. Indeed, this is no different than availing of money under federal programs such as infrastructure or ecotrust."

The Government of Newfoundland and Labrador has signed no deal, rather is following the new rules imposed by the Federal Government. "Essentially, we are being railroaded into an untenable situation whereby we are forced to choose the O�Brien formula because in this particular year, it will give us additional monies just as it will give all equalization-receiving provinces extra cash," added the Premier. "However, we can not lose sight of the fact that this is a one-year gain. We get slightly more money this year, but overall the broken promise of the Federal Government will still see our province short changed by approximately $10 billion."

The Premier said that people should not be misled into believing that we are gaining under this new program. The changes unilaterally imposed by the Federal Government still include provisions for a fiscal cap which essentially makes it more difficult for Newfoundland and Labrador to qualify for equalization. Furthermore, additional changes also make it more difficult for Newfoundland and Labrador to qualify for the second eight years of the 2005 Atlantic Accord.

The Premier also pointed out that the side deal between Nova Scotia and the Federal Government is complex and contains some provisions that have no practical application for Newfoundland and Labrador.

"The regional Minister for Newfoundland and Labrador, Loyola Hearn, himself admitted on the public airwaves that the promise to remove non-renewable resources from the equalization formula was broken by his government," said Premier Williams. "That broken promise means $10 billion to this province, and the time has come for this situation to be addressed. I am hopeful that the Prime Minister is seriously considering the options I put forward to him at our meeting in November, and that we can have a positive response in the very near future."

Media contact:
Elizabeth Matthews
Director of Communications
Office of the Premier
709-729-3960, 693-7291
elizabethmatthews@gov.nl.ca