Equalization, the offshore deals and the current racket

As noted here a few days ago, there are some blogs that veritably scream for comment largely because of the inanity of the rants they offer. Earlier today we labeled one of them for what it is: bullshit.

Well, the bullshit continues.

In this instance, the comments under review come from Roger Grimes' former senior policy advisor as she continues her own Danny-esque rantings on topics she appears to have some difficulty with. She apparently doesn't understand the issues yet she feels obliged to comment. Hence, the comments fit the textbook definition of bullshit.

The topic du jour is Equalization and the offshore deals signed in 2005 by the federal government with Newfoundland and Labrador and Nova Scotia. Now, Equalization is a complex enough issue to explain to people who have no previous experience with federal-provincial fiscal relations. We've taken a crack at it around here and hopefully Bond Papers has been able to pierce enough of the gloom so readers can grasp what is currently going on.

However, when one sees said former senior policy advisor to a provincial premier shag it up royally, we can start to understand, at the very least, how a provincial administration can get so sadly off the rails. But that is another story.

Just listening to Rodney MacDonald being interviewed by Don Newman - he is the Premier of Nova Scotia - he actually does not know that the accords are included in equalization.

Let's just leave aside the first point, namely that this sentence tells us that Don Newman is the premier of Nova Scotia.

Let's also look past the confused construction that makes it unclear who doesn't know what...at least in the context of that sentence.

Instead, let's just look at the last six words: "the accords are included in Equalization."

The simple fact is, they aren't.

The offshore oil and gas management and royalty agreements between the federal government and the provincial governments in Nova Scotia and Newfoundland and Labrador are not part of the Equalization program.

Both the Nova Scotia agreement in 1985 and the Real Atlantic Accord (1985) contain bilateral transfer payment agreements between Ottawa and the two provinces that are designed to replace declines in Equalization payments resulting from increased oil and gas revenues to the provinces.

But they aren't Equalization and they aren't included in Equalization.

Danny Williams' weekend tantrum is actually just a recycling of an old tantrum from June when the O'Brien panel issued its report.

Williams subsequently claimed he had gotten the panel chairman to to admit that the panel couldn't change Equalization. Big score, there, Danny, bye. That's like getting deputy premier Tom Rideout (right) to admit he's not an 80-year-old Tasmanian eel fisherman.

He isn't.

The panel couldn't.

Everyone knew that.

But to get back to the point, though, this little Dan-trum is about more than the blisteringly obvious point that Williams is posturing for his by-election campaign and that he doesn't have anything to offer the electorate but hot air, flop sweat, a dozen "quite franklys" and a lecture on the price of pride.

Yes, the low-rent imitation of Winston Churchill is just participating in the ongoing first ministers' battle with Ottawa to extort more money from the Prime Minister. We discussed this back in January, under what turned out to be an apt title: "Gimme your lunch money, dork".

If you doubt that all the Premiers are part of an on-going struggle to get cash from Ottawa, just look at comments on Tuesday from Saskatchewan premier Lorne Calvert. Apparently he sees Danny as an ally. Of course he does. Calvert wants the same kind of side-deal on transfers Newfoundland and Nova Scotia enjoy.

If that doesn't convince you, consider an October 14 piece in the Toronto Star.

After a lull of a few months, the federal-provincial fiscal war is about to heat up again and enter a new phase.

The first phase, earlier this year, was fought mainly among the provinces, with the have-nots (all but Ontario and Alberta) against the haves.

At issue was essentially the definition of the "fiscal imbalance" in Canada: is it vertical (between Ottawa and the provinces) or horizontal (between provinces)?

Ontario Premier Dalton McGuinty - a vertical imbalance guy - said the federal government should enhance payments to all the provinces rather than pour money into the equalization program, which just benefits the have-nots.

He was pilloried for this by the have-not premiers; one even suggested McGuinty was being "anti-Canadian."

But the have-nots also fought among themselves, as those with oil and gas reserves took on the others over whether revenues from non-renewable resources should be included in the equalization formula.

In the end, the premiers basically agreed to disagree at their annual meeting in July, and the issue was punted to Prime Minister Stephen Harper for a decision.

For those of us who saw that story before the Dan-trum in Gander, and who understand the issues involved in Equalization and the offshore offset deals, we can understand why Nova Scotia premier Rodney Macdonald isn't issuing any ultimata to Ottawa.

He doesn't have to. There's plenty of discussion underway and planned and there is plenty of time to work out a deal among all the provinces and the federal government on Equalization. After all, this really isn't something the federal government can impose on the provinces, as much as any given prime minister at any point in time might like to, given the political extortion artists and bully-boys that sometimes get elected as provincial first ministers.

What's more, the newly elected premier of Nova Scotia - Rodney Macdonald - seems to understand the issues. Don Newman - the CBC newsworld guy - does too, no doubt.

Rodney also understands that everything else is, well, bullshit.