Atlantic Canada needs special consideration for transfer payments, premiers say

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Newfoundland and Labrador Premier Kathy Dunderdale smiles as she takes her seat at a meeting of the Atlantic premiers in Sussex, N.B. on Sunday. — Photo by The Canadian Press

FREDERICTON — Two Atlantic premiers say their provinces need special consideration under equalization and health transfers from the federal government to offset the escalating costs of delivering public services.

The region’s four premiers began a two-day meeting Sunday in Sussex, N.B., to discuss issues of mutual concern, but the sometimes divisive issue of federal transfers tops the list.

“We want to make sure that we come forward with as common a voice as we can because they have such huge impact on our provincial budgets,” said Prince Edward Island Premier Robert Ghiz.

The agreement on transfers with the federal government expires in 2014. During the federal election, Prime Minister Stephen Harper committed to maintaining the six per cent annual increase in health care funding to the provinces.

But Ghiz said it’s important that other funding levels don’t bear the brunt of cuts to keep health spending up.

“If our health transfers are going up by six per cent but our equalization of CST (Canada Social Transfer) is declining by an equal amount, then we’re no further ahead which means we cannot deliver the same programs to our residents as residents in Alberta and Ontario,” he said.

“That is un-Canadian.”

Ghiz said he is concerned because if the Atlantic provinces are to be able to offer relatively the same level of health care as other provinces, then the current per capita funding formula is unfair — especially when you compare the region to provinces like Alberta where the population is younger.

“Atlantic Canadians tend to be a little bit older, therefore it costs more to deliver health services than other provinces and we need to make sure the federal government realizes that,” Ghiz said.

Nova Scotia Premier Darrell Dexter agrees, and says it’s important that the four premiers have a united voice in advance of a meeting of all premiers in July in Vancouver.

“If it is simply done on a per capita basis, then we end up being disadvantaged in comparison with other provinces, and that’s not a position we want to find ourselves in,” Dexter said.

The call for more cash could be a tough argument to make in Ottawa, where the federal government is trying to erase a $28-billion deficit.

The region has been historically heavily dependent on federal transfers to deliver public services.

In the Maritimes, for example, federal transfers and equalization make up roughly a third of all provincial revenues, according to the federal Department of Finance.

Those same federal payments account for 19 per cent of all provincial and territorial revenues.

In Newfoundland and Labrador — which stopped receiving equalization payments three years ago — 14 per cent of revenues come from transfers.

But New Brunswick David Alward said addressing the growing cost of health care must involve more than just asking for more money.

“Health care budgets have actually been growing more than six per cent but in and of itself money is not the solution,” Alward said.

“I believe that is one of the reasons we need to look for ways to work together.”

Newfoundland and Labrador Premier Kathy Dunderdale said she hoped the premiers could also discuss energy issues at the meeting, which concludes Monday.

Her province is looking to develop the $6.2-billion Lower Churchill hydroelectric project in Labrador and export the power to the rest of the region and beyond.

The premiers will also get a chance to tour the Potash Corp. mine in Penobsquis, N.B., and the new Picadilly potash mine that is under construction.

The $1.7-billion project is due for completion next year.

Organizations: Canada Social Transfer, Department of Finance.Those, Potash

Geographic location: Atlantic Canada, FREDERICTON, Sussex Alberta Prince Edward Island Newfoundland and Labrador Ontario Vancouver Ottawa Penobsquis

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