EQUALIZATION” DOESN’T BEGIN TO
ADDRESS THE INEQUITIES IN SASKATCHEWAN
By Garry Breitkreuz, MP – February 23, 2005

On Monday, February 21, 2005, I made the following statement in the House of Commons:

Madam Speaker, a remarkable consensus was reached in Saskatchewan on Friday. Political leaders from four different parties agreed to press the federal government to implement the 10 province standard for equalization in Canada , which was a key factor in the Conservative election platform. The premier of Saskatchewan, the provincial leader of the opposition, seven Conservative MPs, and the leader of the provincial Liberal Party, all agreed that the people of Saskatchewan deserve an equalization deal that has the same terms as those provided for in the Atlantic Accord, in particular, non-renewable resources should not be included in calculating transfers to the provinces. We urge the finance minister, who is a Saskatchewan MP, to stand up for his home province and deliver a fair deal for the people of Saskatchewan . What possible excuse can the member for Wascana give for not treating all provinces equally under a program that is supposed to be a national program?

But that’s not the full story about equalization in Saskatchewan. 

Premier Lorne Calvert and Ralph Goodale, with much enthusiasm, recently declared Saskatchewan a “have” province.  While that announcement served as an ego boost to both the province’s NDP government and the federal Liberals, it is a far cry from the truth. This declaration indicated how deeply flawed the equalization formula is.

Our constitution requires that all provinces have the fiscal ability to provide equivalent public services. A complex formula involving 33 separate tax bases is used to calculate what the federal government will pay in “equalization” to the “have-not” provinces.  Saskatchewan has traditionally been short-changed.  In fact, this next fiscal year Saskatchewan will get nothing because it is now a “have” province.  Does it make sense for a province like ours to send your hard-earned tax dollars to Quebec , Manitoba and British Columbia ?

By all real indicators, Saskatchewan is far from being a “have” province. It is not a knock to the people of Saskatchewan, but to high-ranking political officials like Mr. Goodale, who know first-hand the financial struggle of the province’s key industry – farming. Our beef, sheep and other producers have been ravaged by the BSE crisis and grain farmers have had to endure year-after-year of weather-related crop failures. Countless farm families have had to sell off their machinery, animals, land and homes because their input costs far outweigh their income. Yet, we are a “have” province?  

Do you need more evidence?

• Saskatchewan ’s population declined by 24,000 between 1996 and 2004
• Saskatchewan ’s per capita income is almost $5,000 below the national average.
• Over the past 10 years, Manitoba has received approximately $800 million a year more than Saskatchewan in equalization payments.
• Saskatchewan has the longest wait times for surgery in the nation (24.5 weeks).
• Saskatchewan has the longest wait times for MRIs (25 weeks).
• Saskatchewan ’s net debt is nearly ten billion dollars or almost $10,000 of debt for every man woman and child living in the province.  The fourth highest net debt of the ten provinces.
• Saskatchewan pays the high cost of educating our kids who then move to Alberta , B.C., Ontario or the U.S.A where the pay is so much better and the taxes are so much lower.

Yet, we are a “have” province?

Saskatchewan is also the only province in Canada to not fully fund its share of farm safety-net programs. The premier claims they can’t afford it. Doesn’t anyone see the obvious contradiction in his attitude to the financial health of this province? On one hand he says everything is great, we are now a “have” province. Then on the other hand, he declares that he can’t fund certain programs to benefit the agriculture sector of the province – a sector that is the foundation of our economy in Saskatchewan .  Is this any way for the Premier of a “have” province to behave?

What is the reason for this disparity?  Part of it is the inequity of equalization and the unfair way it is applied across Canada .  The other part is that the Saskatchewan government doesn’t have its priorities straight.  If Saskatchewan really is one of the “have” provinces like Alberta and Ontario , then it has to start spending any extra cash on really important things like helping farmers through these extraordinarily tough times and paying down the provincial debt.  Not paying down the provincial debt is like a farmer with a stack of bills that would choke a horse going out and buying a new 4x4.

If we wait long enough, the federal government is likely to give Saskatchewan the same deal Newfoundland and Nova Scotia got for their resource revenue.  However, the people of Saskatchewan should be very, very wary about where and how this windfall is going to be spent.