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NLIS 7
June 12, 2001
(Finance)


Minister reiterates province's position on equalization cap
before Senate Committee on National Finance

Finance Minister Joan Marie Aylward said today she was pleased to have been able to drive home the province's concerns regarding Bill C-18 before the Senate Committee on National Finance.

Bill C-18 is intended to amend the equalization program for one year to lift the existing ceiling. In the province's view, the amendment does not go far enough.

"The province of Newfoundland and Labrador is fundamentally opposed to the existence of a ceiling provision and believes it should be struck from the program. The ceiling should not be a mechanism used by the federal government to constrain and suppress normal program growth," said Minister Aylward, reiterating concerns about Bill C-18 the province had earlier expressed to the House of Commons Standing Committee on Finance. 

"A restrictive ceiling, such as was imposed in 1999, could lower equalization payouts at a time of buoyant federal revenue growth, diverting money from the equalization program into an already swelling federal surplus," said the minister. "As a recipient province, we cannot accept that this is an appropriate exercise in nation building and cooperative fiscal federalism."

"A fully functioning equalization program is of critical importance to Newfoundland and Labrador," said Minister Aylward. "It is the equalization system, with an entitlement this year of $1.1 billion, that allows us to put the meat on the bones of the public service in our province."

Media contact: Lynn Barter, Communications, (709) 729-0084.

2001 06 12                                                      2:40 p.m. 


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