October 27, 2004
(Executive Council)


The following is a text of the speaking notes delivered at a news conference held today (October 27) by Premier Danny Williams in St. John�s:

Thank you all for joining myself and Minister Sullivan here this afternoon.

I must apologize to you today. As you can hear, my voice is failing me and I ask that you bear with me. I was unable to speak at all this morning, but I am making progress with plenty of lemon water.

I will make a brief statement and answer as many questions as I can, but will defer to Minister Sullivan when possible.

Yesterday, I made a very difficult decision in Ottawa when I decided not to attend the First Ministers� Meeting on equalization.

I have a great deal of respect for my provincial colleagues, and I do not take lightly a decision to leave a meeting of that magnitude.

However, given the circumstances, I make no apologies for not attending that meeting and for standing up for the people of Newfoundland and Labrador.

On June 5 of this year, after months of discussions and aggressively pursuing the federal government, the Prime Minister made a commitment to me personally and to the people of Newfoundland and Labrador. He acknowledged the commitment to local and national media.

He committed to accept our proposal for 100 per cent of our offshore revenues under a revised offset in the Atlantic Accord.

The Prime Minister and I had an agreement that would finally allow this province to benefit from our offshore resources.

This agreement did not include a cap or a reference to fiscal capacity. It did not include any linkage to the fiscal capacity of other provinces. And, it did not include a time frame. In fact, it specifically excluded it.

The agreement was simple and clear. The province of Newfoundland and Labrador would receive 100 per cent of all of our provincial offshore revenues with no clawback.

Our proposal that was given to the federal government clearly illustrates this.


This would be accomplished outside of the equalization formula so that we, as a province, could finally achieve self-sufficiency, fiscal stability and prosperity.

In the months since that agreement was achieved between myself and Prime Minister Martin, Minister Sullivan has been meeting and corresponding with Minister Goodale to finalize the details of the agreement.

We have sent several pieces of correspondence and documentation to the federal government throughout this period.

Included in that information is a formal request for the federal government to put their commitment to the province in writing.

The federal government refused to do so, and we had little choice but to continue to take the Prime Minister at his word.

He stated privately and publicly that his word was good, and we trusted him to fulfill his commitment.

I have personally sent the Prime Minister three letters on this issue since June. I have with me today a letter dated June 10, just five days after the agreement between us was reached. In that letter I state:

"Our proposal is for the current time limited and declining offset provisions in the Atlantic Accord to be replaced by a new offset provision continuing over the life of the offshore petroleum production which would provide a payment equal to 100 per cent of the amount of annual direct provincial offshore revenues, which are clawed back by the equalization program.

The mechanism for this payment would continue to be through the Department of Natural Resources Canada."

On August 5, I again wrote the Prime Minister and stated in the opening paragraph, "This letter is further to our telephone conversation of 10 July 2004, during which we reaffirmed our agreement that Newfoundland and Labrador will retain 100 per cent of the benefit of the offshore petroleum revenues it receives, notwithstanding the treatment of those revenues under the equalization program."

On August 24, I again wrote the Prime Minister and reaffirmed the agreement we made based on his commitment of June 5.

I received no response to any of these letters from the Prime Minister, with the exception of several verbal responses reiterating and reconfirming his June 5 commitment.

My clear understanding of the agreement reached between myself and the Prime Minister and confirmed to him in writing was never refuted, questioned or responded to negatively by Prime Minister Martin.

I also have with me today a copy of the letter from Minister Goodale which outlines the federal government�s proposal to the province, dated October 24, 2004.

The proposal laid out in Minister Goodale�s letter is in clear contradiction to what is laid out in my correspondence to the Prime Minister.

Specifically, Mr. Goodale�s letter states "...subject to the provision that no such additional payments result in the fiscal capacity of the province exceeding that of the province of Ontario in any given year."

While we did send the federal government several pieces of correspondence, we received nothing in writing from them until this letter from Minister Goodale received Sunday evening past.

The agreement reached between myself and the Prime Minister was clearly based upon the proposal we made in writing to the federal government, my subsequent letters to him, and our conversations. And that proposal was simple.

Again, the agreement did not include a cap. It did not include any linkage to the fiscal capacity of other provinces. And it did not include a time frame.

All of these components are a part of Minister Goodale�s letter and are clearly unacceptable.

I have here today a chart which outlines the province�s proposal which was the basis of my agreement with Prime Minister Martin, which would see the province getting 100 per cent of provincial revenues.

The chart also outlines the federal government�s verbal proposal of October 14 and the written proposal of October 24. Clearly, the October proposals do not come close to giving Newfoundland and Labrador 100 per cent of provincial revenues.

In fact, the last proposal is less advantageous to Newfoundland and Labrador than the first one. In both circumstances, they are completely unacceptable as they do not reflect our agreement.

What we have asked for, as represented by the red line in this chart, is not unreasonable. It gives us 100 per cent of our provincial revenues.

What the federal government�s latest proposal calls for is a cap that prevents us from benefiting from higher oil prices and increased production.

The only group to benefit from that would be the federal government. This is exactly the same scenario we have with Quebec in relation to the Upper Churchill and the absence of an escalator which has cost this province hundreds of millions of dollars.

Simply put, our proposal on the Atlantic Accord protects us from the pitfalls of another Upper Churchill deal.

Minister John Efford said earlier this week that we could take it or leave it; well, let me answer Mr. Efford loud and clear. We will leave it, thank you very much.

We are not prepared to give away potentially billions of dollars in revenue to contribute to an already bloated fiscal surplus in Ottawa.

Yesterday, in front of the national media, the Prime Minister stated that I was inaccurate in indicating that I placed a phone call to him on Sunday and stated that he always returned a premier�s call.

I am pleased that late yesterday the Prime Minister�s Office acknowledged that the Prime Minister was wrong when he claimed to not have received a call from me over the weekend.

I have since returned a call to the Prime Minister to advise him of this news conference, and asked him to honour his commitment once and for all.

We have agreed to talk further and I hope that this will result in the implementation of our agreement from June 5.

We are not prepared to have Ottawa keep the loaf and give us the crumbs, and we are not prepared to say yes to less than that which was committed by the Prime Minister.

Thank you, and now the Minister and I will take your questions.

Documents to accompany this release are available below: 

1. Commitment Shortfall Chart (High Price Assumption)

2. Letter to the Prime Minister (June 10, 2004)

3. Letter to the Prime Minister (August 5, 2004)

4. Letter to the Prime Minister (August 24, 2004)

5. Letter from Ralph Goodale, Minister of Finance (October 24, 2004)

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

2004 10 27                    4:20 p.m.

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