39th PARLIAMENT, 1st SESSION
EDITED HANSARD • NUMBER 078
CONTENTS
Tuesday, June 12, 2007

Mr. Ed Komarnicki (Parliamentary Secretary to the Minister of Citizenship and Immigration, CPC):

Mr. Speaker, I will address some comments with respect to the budget bill.

The budget would restore fiscal balance in Canada, cuts taxes for working families, invest in priorities like agriculture, health care, education, infrastructure, the environment and reduce our national debt. It is fair, it is principled and it is good for the long term.

The budget would invest in agriculture, including a $400 million immediate one time payment to address the rising costs of production, a $600 million one time payment to enact a simpler, more responsive income stabilization program for farmers, with a new savings account type program being cost shared on a 60:40 basis with the province, and a $2 billion announcement in new incentives for renewable fuels. All in all, it is a pretty decent budget for all of Canada, and Saskatchewan as well.

The budget is also a historic one in that it acknowledges and addresses the fiscal imbalance by giving $39 billion over seven years to the provinces in additional funding. The provinces now have the additional resources they need to meet their many pressing needs. Each province, including Saskatchewan, would benefit with this transfer.

Federal support for Saskatchewan would be $1.4 billion in 2007-08, including $226 million under the new equalization formula, $756 million under the health care transfer and $342 million for the Canada social transfer that includes additional funding for post-secondary education and child care and $75 million for infrastructure. In total, budget 2007 would provide the residents of Saskatchewan with over $800 million in new money.

It is in this context that the equalization formula and the amount payable to Saskatchewan under it should be viewed. The purpose of equalization is a not a permanent entitlement, nor should it be. As a province's economic fortunes improve, its equalization payments will decline. Conversely, as a province's economic fortunes decline, its equalization payments will increase.

The current formula, as requested by many provinces, includes a higher equalization standard of 10 provinces. A province like Saskatchewan would get the greater of the amount it would receive by fully excluding natural resources under one option or by including 50% of natural resource revenues under another option. Should Saskatchewan's economy, economic fortunes, resource revenues or production levels decline, equalization payments would continue where 100% of natural resources would be excluded.

The fiscal capacity cap would ensure a receiving province would not end up with a fiscal capacity higher than a non-receiving province. That is how equalization should work. Obviously, one would always like an even better and more substantial deal under equalization, but one has to take into account the context of the need for a principle based approach and the overall amount a province like Saskatchewan receives as well as the benefits flowing to Saskatchewan by virtue of the many provisions in the budget. Saskatchewan has received the largest per capita gains of any province under the fiscal balance package in 2007-08.

The budget contains many more provisions. For example, farmers and small businesses would benefit from an increase in the lifetime capital gains exemption, from $500,000 to $750,000. Manufacturing and processing firms would benefit from a two year 50% straight line write-off for investment in machinery and equipment. All of us would benefit from the tax back guarantee, where money saved from paying less interest on the debt results in personal tax reductions.

Our government has allocated $22.4 billion to our national debt in just two years. With these payments alone, the government will save $1.1 billion in interest payments in 2007-08 and nearly $1.3 billion in 2008-09, all of which will go toward tax reduction.

There are more things I want to say about equalization, but I want to highlight what I call the height of hypocrisy. All things must be taken in their proper context. I know there is great temptation to dumb down complicated issues to single issues and to focus exclusively on those issues.

The equalization issue falls within the context of the budget and is not a stand-alone document. Its purpose is to ensure that the provinces that have not are helped by those that have, so Canadians across our great country can generally expect comparable or the same types of programs and services regardless of where they live. There is, by nature, a give and take in that process, with the best interests of all Canadians at stake, which by its nature requires some movement and some give and take for the benefit of all.
First and foremost, the promise was to fix the fiscal imbalance and to get things in proper alignment to ensure the provinces could meet their provincial obligations, and equalization was part of that. Many, myself included, have argued for, and quite vociferously I might add, for the exclusion of all non-renewable resources from the equalization formula. Why? Simply put, it would mean more money. Everyone wants more money.
I have always said that one should try to substantially achieve the goal of exclusion and do everything possible to that end, but in the end a fair and equitable solution must be found to balance that interest with the good of all of Canada.

As hard as that may seem, the approach is broader, it is bigger than any one province or any one premier or any one reporter or news media for that matter. For the Randy Burtons and Murray Mandryks of this world, who see the issue in isolation of all the facts and out of the context of decision-making, perhaps they should look beyond their very narrow focus. Where were they, the Premier of Saskatchewan and the member for Wascana when the previous equalization formula was in play?

Saskatchewan lost billions of dollars while the member for Wascana was finance minister, including a time when the current Premier of Saskatchewan was watching from the sidelines. The member for Wascana will say that he delivered $700 million, but what he forgets to say is that Saskatchewan lost billions right under his nose and he did nothing about it. In fact, as one expert indicated, $1.08 for every $1 of oil that left Saskatchewan was lost, and in some cases more.

Where was the member for Wascana when the Atlantic accord was being signed by the previous Liberal government? Why was he not making a similar deal for Saskatchewan? It is the height of hypocrisy for him now to say that he would do it differently. Thirteen years of evidence shows differently. In fact, the member for Wascana put together the expert panel, resulting in the O'Brien report. For him to suggest he would have done anything other than accept the report, is utter nonsense, totally unbelievable and the height of hypocrisy. Saskatchewan will not be fooled. It would be far worse under the previous Liberal government and the unamended O'Brien report, which the member for Wascana would surely have accepted.

For the moment, Saskatchewan's economy is hot. We are doing well, despite any financial mismanagement. I know the premier would like to get his fingers on more money, not to develop Saskatchewan but to try and win an election he cannot win. It is interesting to note that the premier, along with the member for Wascana, sat on their backsides while the Atlantic accord was signed and made no noise until after the fact. Let us be frank.

The formula is taking place within the context of a budget vote. One has to take it in that context. Would one be prepared to vote against the government and have an election call? The hypocritical member for Wascana, including the Leader of the Opposition, along with all of their members would run, with their tails between their legs, rather than vote down the budget and call an election.

Only when they knew there were sufficient numbers for the budget to pass, did they decide to vote against the budget, with all the rhetoric that goes with it. They know that and so does everybody in the House. That includes their NDP cousins, who blow hot and cold, both blowing and sucking at the same time, on the equalization issue. Yes, they with their Manitoba cousins are saying that oil and gas should be included. Yes, they with their Saskatchewan cousins are saying that oil and gas should be excluded. All things to all people, but hypocritical as well.

Where is the spirit of nation-building? Where is the spirit of nationhood? Where one goes against his or her better interests to ensure that nationhood works? What we have at play is called something simple. It is called greed. Give me, give me, but not if it costs me something.

We should be developing Saskatchewan and its resources. We should be growing our province so we can help others, so we can produce income and wealth. We should not be standing on a street corner with cap in hand looking for a handout. The current premier is trying to weasel a win for himself and he will go to long lengths to do it.

We are moving in a new direction in Saskatchewan. We have a new vision. We will not only become self-sufficient, but we will be leaders in our country and, in some instances, in the world.

This week the Minister of the Environment, the Minister of Natural Resources and the chair of the Standing Committee on Industry, Science and Technology will visit my constituency. Weyburn, Saskatchewan has the world's largest CO2 storage project. Estevan is the proposed site of the world's first zero emission coal-fired power plant. Midale, Saskatchewan, in the oil patch, has some of the most enhanced oil recovery technology that exists in the world.

It is time for the Premier of Saskatchewan to get on with the program and quit whining. Even Janice MacKinnon of the previous NDP government indicated that we needed a principled approach in equalization and that any side deals, in the kinds that were accorded, were done with an end in mind that was not helpful to the good of nationhood.
Our premier asked for an equivalent formula where oil and gas was included under the five province average. From what has happened in Atlantic, a 10 province average may it even make that better. That is what the equalization formula has. Yes, it has a cap, but it is for the purpose to ensure that those that contribute to equalization do not have a lower fiscal capacity than those that receive.

This is the way it should work. It is a matter of ensuring that all Canadians receive the benefits of similar programming.