Atlantic Finance Ministers meet in Halifax

Atlantic Canada's finance ministers are urging the federal government to put more money into the region's economy, instead of removing it. The four ministers met in Halifax on November 14 and expressed their concern over the growing inadequacy of Canada's equalization program.

Nova Scotia Finance Minister Peter Christie said that Ottawa should be looking for ways to help Atlantic Canada�s economy, not hurt it.

"The federal government is unduly penalizing the Atlantic provinces by not providing forgiveness from the $500 million census-related impacts on transfers. How do they think we pay for health care in this region, if not through equalization?" he asked.

The federal government wants several provinces to repay large amounts relating to four years of equalization and health care payments, which were based on previous population data, a major component of transfer formulas. "Atlantic Canadians should not have to suffer through program reductions which could result from the use of this new federal data," said Mr. Christie. "We are already struggling to keep pace with the level of services provided by wealthier provinces. This will just be an added blow to our region." All Canadians pay into the equalization program, which is intended to provide comparable levels of service at comparable levels of taxation.

Prince Edward Island provincial treasurer Mitch Murphy also noted that the regional economy has made solid progress and own source revenues have performed well. He calls on the federal government to work with the Atlantic provinces to sustain this performance in the future and is concerned that the uncertainty over key federal transfers will undermine this progress.

"We want to work with the federal government to develop an economic strategy that will help the region grow and prosper, instead of resigning ourselves to lower quality health care in Atlantic Canada, as compared to other provinces," said Mr. Murphy. He said that strategic investments must be made to overcome the lack of regional infrastructure.

The ministers discussed the urgent need to strengthen the equalization program, which is under review and up for renewal in April of 2004.

"It is essential that the federal government understand Atlantic Canada's challenges and the absolutely critical role that equalization plays in our ability to provide our citizens with a level of service which is comparable to other jurisdictions across Canada," said Newfoundland and Labrador Finance Minister Loyola Sullivan.

The ministers again called on Ottawa to restore the 10-province standard within the formula, given the widening disparities between provinces under the current five-province standard. They also want full inclusion of all revenue sources in determining in the level of transfers under the program. Federal exclusion of these two ingredients in previous renewals has cost the Atlantic provinces over $760 million in lost revenues in 2002-03.

The ministers agreed that it is important to meet with the Atlantic federal caucus representatives to impress upon them the importance of a strengthened equalization program for Atlantic Canada.

The four finance ministers want the federal government to guarantee the $2 billion promise for health care that was announced in the February accord. They welcomed federal finance minister John Manley's recent promise that health-care dollars would be the first priority on any federal surplus in 2003-04.

New Brunswick Finance Minister Jeannot Volp� called upon Ottawa to follow through on this commitment by ensuring steps are taken within the federal government to ensure that a surplus in fact does materialize before year's end.

"We urge the federal government to provide the additional $2 billion commitment as soon as possible to address existing healthcare issues, and not wait until next fall," said the minister. "However, it must be recognized that this is one-time only funding. We need to look beyond next year. Our premiers are pressing for a return to 25 per cent federal sharing in health care costs, as recommended by health care commissioner, Roy Romanow."

"We anxiously await the federal response to these requests, as it will speak to their commitment to Atlantic Canada and renewed federalism," said Nova Scotia�s Peter Christie.

The ministers wrapped up their discussions by calling on the federal government to recognize the unique challenges confronting the region. They also called for the new federal finance minister to meet early with the Atlantic ministers to work towards a strengthened position within the federation.

Media contact: Deirdre Robinson Greene, Communications, (709) 729-0084

2003 11 17                                        12:45 p.m.