The formula determining transfers under the federal equalization program will not change until at least 2024 despite the fact the provincial Liberals have declared it unfair to Newfoundland and Labrador.
Finance Minister Tom Osborne made an appeal directly to federal Finance Minister Bill Morneau late last year, asking for a change to allow at least some benefit to flow to Newfoundland and Labrador as it struggles with public debt, low population density and high-cost services.
Under equalization, thanks to non-renewable resource revenues from offshore oil, Newfoundland and Labrador is positioned with British Columbia, Alberta and Saskatchewan and considered a “have” province. It doesn’t receive any payout from the roughly $19-billion fund this year.
About $11 billion of the equalization fund will go to Quebec.
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“The formula is a revenue-based formula, not a financial needs-based formula,” Osborne said Friday. “And unless the formula changes from being a revenue-based formula … there’d have to be significant changes to how that’s written and designed before we’d see benefit.”
- equalization program is generally designed to address differences in provincial revenue-generation capacity, allowing provinces to publicly fund services equal to others.
While disappointed in the status quo, Osborne said the Trudeau government has been helping this province handle financial demands in other ways.
“I can say we’ve gotten much greater co-operation from Ottawa than the previous administration,” he said, adding there is also potential in the coming renegotiation of the Atlantic Accord.
Federal cabinet minister and MP for St. John’s South-Mount Pearl Seamus O’Regan said it’s important for everyone in the province to keep the big picture in mind and look beyond just the equalization program.
“Let’s think outside of a formula that is extremely difficult to change. Although I would say it’s nice if you show up at the meetings in order to help change it,” he said, taking a shot at the provincial Progressive Conservatives, who did not take part in the last talks on the formula.
Like Osborne, O’Regan emphasized not having equalization money is not the same as the province being left behind.
“We have seen an influx of federal cash to infrastructure, to the Canada Child Benefit, to research and development, to the Ocean Supercluster, to Memorial University, to CNA, to education, to broadband — a bigger influx of federal cash than we have seen in generations,” he said. “And that will give this province’s economy a significant leg up over the next few years.”
