Premier Williams encourages Layton to allow Ottawa to sell its Petro-Canada shares

In a letter to federal New Democratic Party leader Jack Layton, Premier Danny Williams said the Government of Canada�s remaining 19 per cent share of Petro-Canada should be sold to invest in social programs for all Canadians; however, Canada�s 8.5 per cent ownership stake in the Hibernia project � an entirely different kind of public investment � should be transferred to Newfoundland and Labrador which currently has no ownership role at all in its principal offshore petroleum project.

While the federal NDP leader has publicly supported the transfer of Canada�s Hibernia stake to Newfoundland and Labrador, he indicated Tuesday that his caucus may block the planned sale of Petro-Canada shares.

Premier Williams said Petro-Canada, which is now a multinational company with holdings all over the world, was initially created by and for all Canadians and, therefore, the $2 to $3 billion in returns from the sale of those shares should be returned to all Canadians through increased funding for social programs including health care and education which are in desperate need of new dollars.

Unlike the federal government�s investment in Petro-Canada, the Canada Hibernia Holding Company (CHC) was established by the Government of Canada solely to administer Canada�s 8.5 per cent equity investment that enabled the Hibernia project to proceed. "Now that Canadians have recovered the full value of their 8.5 per cent equity investment in the Hibernia project, the Government of Canada should transfer those shares to Newfoundland and Labrador, giving the province a direct ownership share in the Hibernia project," said the Premier.

Premier Williams said, while he welcomes the NDP�s support on the transfer of Hibernia shares, he would also like to see the party support the exchange of Petro-Canada shares for significant social benefits for Canadians. "It would be far more beneficial to Canadians to sell Petro-Canada shares to pay for improved social programs than to forego that revenue in order to hang on to a minority stake in the oil company," said the Premier, who pointed out that the Petro-Canada shares do not give Canada control of the company nor do they secure Canada�s energy supply or affect fuel prices.

"Newfoundland and Labrador receives just $16 million for every $1 billion in new social program funding, so an ownership stake in our major offshore project would greatly benefit the economic prospects of the province," he said. "Hand in hand, these policies would allow Newfoundland and Labrador to enjoy ownership and greater benefits from our nonrenewable oil and gas resources. More importantly, it would enable us to achieve our ultimate goal of a greater degree of self-reliance within the federation while, at the same time, strengthening social programs in our province and across Canada," he said. "Selling the federal government�s Petro-Canada stake in exchange for socially-progressive benefits would be a win-win situation for Newfoundland and Labrador and ultimately for all Canadians."

Media contact: Elizabeth Matthews, Office of the Premier (709) 729-3960 or (709) 690-5500

2004 07 01                                        2:25 p.m.