Please check against delivery Good afternoon, ladies and gentlemen. I
want to thank you all for coming out this afternoon. What can I say? What an awesome day to be a
Newfoundlander and Labradorian! Today, I am so pleased to be joined by my
Cabinet and Caucus and all of our supporters. All of you, who have stood
strong and united over the past several months. All of you, who have stayed focussed and
resolute on the issue. All of you, who have shown the country what pride
is all about! I have to give a special mention to someone
who couldn�t be here in body, but is certainly here in spirit, and that
is my Minister of Finance, Loyola Sullivan. I knew things were going to
happen when I beat him at 120s on the way to Ottawa, after losing to him
on the way back from Winnipeg. The tides had clearly turned! Minister Sullivan has been a great support
and a vital part of this process over the past several months. I know he
would have loved to be here today; he never stops. He stayed in Ottawa for
meetings of provincial and territorial finance ministers. I�m sure he
will be the most popular guy in that room today! The effort to secure a better deal on the
Atlantic Accord was about more than money, for the people of Newfoundland
and Labrador. It was about integrity and dignity and honour, and it was
about pride! And those things cannot be bought. I can tell you that I have
never been more proud to call myself a Newfoundlander and Labradorian! Almost fourteen months ago, I went to
Ottawa for my very first meeting with Prime Minister Paul Martin. The very
first issue that I raised with the Prime Minister was our offshore
revenues and the inequitable arrangement that existed between the federal
and provincial governments. I pointed out that we were NOT principle
beneficiaries, as was intended under the original Accord. That day was the beginning of a long, hard,
intense and difficult road. After that meeting, I decided that my main
focus had to be convincing the Prime Minister that our province deserved a
more just and equitable arrangement. We not only deserved it, but we
needed it, if we were to have any hope of turning our terrible fiscal
situation around. So, we embarked upon a journey that began
with a proposal that we presented to the Prime Minister, his ministers and
federal officials. This proposal essentially requested that Newfoundland
and Labrador be allowed to truly be the principal beneficiary of our
natural resources - something that has eluded us for decades. I then went across the country and garnered
the support of my fellow premiers and territorial leaders, as well as
commitments from the leaders of two of the other national parties. Then, finally, on June 5 of last year, I
was able to secure the commitment and promise from Prime Minister Martin. The hopes and dreams of Newfoundlanders and
Labradorians were about to be fulfilled. Finally, there was recognition
that we have not been principal beneficiaries. We have not received a fair
and just return on these great resources, which we brought with us into
confederation. We all know that the promise that was made
to us on June 5 was a very long time coming. It is something that we have
wanted for many, many years; however, it is something that we had never
been successful in attaining. However, on Friday night past, Prime
Minister Martin lived up to the promise he made to me that morning in June
and agreed to a new arrangement which will mean substantial benefits for
the people of Newfoundland and Labrador. The Agreement in Principal that was signed
in Ottawa on Friday evening includes the following elements: First, a 100 per cent guarantee.
Newfoundland and Labrador will receive 100 per cent of our offshore
revenues, free from any clawbacks while we are an equalization-receiving
province, for the full life of the agreement. Second, an enhanced protection when we come
off equalization. Newfoundland and
Labrador will still receive the full benefits of the protection offered by
the Atlantic Accord. The existing Accord�s offset mechanism has been
extended by one year to cover the full first eight-year term. During the
second eight-year term, should the province no longer qualify for
equalization in any year, it will receive 66 per cent of the previous
year�s offset payment in year one and 33 per cent in year two. Should
the province requalify for equalization, the 100 per cent offset will be
restored. If we come off equalization again within that time frame, the
transition is reset. Third, a $2 billion floor.
Newfoundland and Labrador will receive an up-front payment of $2 billion
plus interest, which represents a floor on future offset payments above
and beyond the existing Accord offset payments. This floor essentially
protects the province from a decline in oil prices between
$30-35US/barrel. In other words, offset payments for the first eight years
will be no less than what they would be if the price of oil remains
constant at $30-35US/barrel and the level of production remains at the
forecasted levels. While minimizing risk to the province, this provision
in no way restricts the province�s ability to benefit from oil prices
above this range. It will also minimize the risk of a steep
decline in offset payments in years in which the province no longer
qualifies for equalization. This money will essentially be held "in
trust" while the province determines how it can provide the people of
Newfoundland and Labrador with the greatest return. And though we have a
floor for protection, we have no ceiling - which protects us on the
upside. There is no restrictions to the upside, which means that
Newfoundland and Labrador has the opportunity to prosper, just as every
other province, from this resource. This is a benefit that an Ontario cap
would have restricted. Fourth, all new projects are included.
The benefits of this agreement will apply to any new oil and gas discovery
that is developed within its 16-year term, including Hebron-Ben Nevis and
yet-to-be-discovered fields in the Orphan Basin, Laurentian Sub-Basin and
offshore Labrador. Fifth, guaranteed payments for 2004-05 and
2005-06. For the fiscal year
2004-05, the value of the additional offset payment to provide this 100
per cent offset will be $133.6 million. For the fiscal year 2005-06, the
value of the additional offset payment to provide this 100 per cent offset
will be $188.7 million. Sixth, this is a 16-year agreement.
This agreement ensures that Newfoundland and Labrador will continue to
receive 100 per cent of our offshore revenues while we are an
equalization-recipient province for sixteen years, subject to meeting
certain fiscal indicators. Next, we will have a review mechanism after
16 years. This agreement provides
for a review mechanism after sixteen years. The federal and provincial
governments agree that after the sixteen-year term of this agreement
expires, the two levels of government will jointly enter into a review of
the agreement. This provides future governments with the opportunity to
have this agreement extended. Finally, we also have a most favoured
agreement provision. Should the
Government of Canada enter into a new offshore petroleum resource revenue
agreement with another province or territory, that is more beneficial to
Newfoundland and Labrador, the province can opt to commence negotiations
to revise this agreement. Those, essentially, are the main elements
of this agreement. Some have reported that this agreement is
not substantially different from the offer that the federal government
made in Winnipeg on December 22, but I can assure you that it certainly is
a vastly improved deal. Through extensive discussions, we have improved
the Winnipeg proposal by getting a $2 billion floor plus interest,
securing a 16-year deal, eliminating the onerous balanced budget
requirement and achieving agreement to include a review mechanism after
sixteen years. We were also successful in getting the
existing Atlantic Accord benefits extended by an additional year, and we
have a transition mechanism negotiated into the second eight years - a
huge win for the province, which could translate into hundreds of millions
of dollars. We have also negotiated a key element, which is the inclusion
of all new projects into this deal. These are just some of the
improvements between the two deals. We have come a very long way from the offer
put to us in Winnipeg, and we have come substantially further from where
we were before we successfully secured this promise from the Prime
Minister. Prior to Prime Minister Martin�s commitment, this province was
nowhere close to being principal beneficiary of our offshore resources. The federal government would have taken
from us potentially billions of dollars of our provincial revenues, in
addition to their own federal revenues of several billions of dollars. We had no protection for the future. We were repeating our historic trend of
"giving it away". Well today, we have
protection for the future, and let me tell you - the giveaways are no
more. Today,
we are finally turning the corner, and we are ready to seize the
opportunities to stand on our own two feet. Today,
we start a journey towards self-sufficiency and prosperity. I would be remiss if I did not make mention
of some individuals who collectively, are an integral part of our
celebration today. The Atlantic Accord was devised and implemented under
the leadership of Brian Mulrooney and Brian Peckford, along with Ministers
John Crosbie and Bill Marshall and their governments. Those individuals
laid the foundation for the significant accomplishment we achieved as
province, and for that we all owe them a huge debt of gratitude. I would also like to thank those
individuals over the past several months who have supported us vocally and
morally. Federal MPs and Senators, Mayors - specifically Mayor Andy Wells
- and town councils across the province. Ex-patriat Newfoundlanders and
Labradorians who stood strong behind their home province. The support was
unflappable and more important than you all will ever know. It would be wrong of me to sit here this
afternoon and tell the people of Newfoundland and Labrador, that all of
our problems are gone. That suddenly, overnight, our fiscal challenges
have been overcome. The reality is that the fiscal situation
facing this province is serious and should not and cannot be
underestimated. There is no magic solution, no miracle answer to our $11
billion debt. There is no easy way to rebuild infrastructure, eliminate
waiting lists in our hospitals and revitalize rural communities. However, today we do have something that
was lacking last week. We have hope. Our government promised the people of this
province that we would provide real leadership and a new approach. And I
think our new approach is paying off. But a new approach and real leadership is
about more than securing new money. It is also about ensuring that money
is spent wisely, strategically and in a way that protects and promotes the
best interests of the people of this province. And that is what we are
committed to doing for you. We have already begun a number of very
important initiatives, such as our Rural Secretariat, developing an
innovation strategy, building infrastructure and making strategic
investments into social programs. With this new money, we now have the
ability to further develop and progress these initiatives. And we have the
flexibility to create new important initiatives and make more strategic
investments. This money will also assist us greatly in
addressing our structural debt and deficit problems. By adequately
addressing this enormous burden, we will begin to address some of the
systemic and structural changes that are absolutely vital to the future
fiscal health of our province. I know the people of Newfoundland and
Labrador want to feel the benefits of this new money. And they will. But I
also know that you want our government to take a new approach to spending
- a new approach to governance. A responsible and accountable and
transparent approach. We cannot forget that while these new
monies are significant and will greatly enhance the well-being of this
province, they are coming from a finite stream of a non-renewable
resource. One day, the money will start to dry up with the oil wells.
Hopefully, we are a long way from this, but it is a reality we would be
foolhardy to ignore. We said in our Blueprint that we wanted the
ability to use these resources in a manner that ensured "future
generations ... will continue to benefit long after the resources are used
up." It is, therefore, even more incumbent upon us to ensure that
these monies are spent wisely, with the future in mind. We must be strategic in both meeting the
challenges and optimizing the opportunities. And we will do this together,
in consultation with industry, unions, communities and all stakeholders.
The old, irresponsible style of government spending is gone. The new
approach is here to build a bright, strong, stable future. A future that
will mean self-reliance and pride for the people of our province. I want to close by once again thanking the
people of Newfoundland and Labrador for your support over the past several
months. We all have a lot to be proud, and I look forward to building our
future together. Thank you.
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