10 March 2016

The inexplicable persistence of nonsense #nlpoli

“There was a very good job done … of boxing this province out [of the Equalization program] a few years ago,”

That was Premier Dwight Ball talking to reporters on Tuesday after the Throne Speech that set the agenda for his new administration. He was talking about the prospect that he might get some cash from Ottawa to cover the province’s massive deficit.

What Ball said isn’t true.

It’s hard to know why the false version of events lives on, but it does. All sorts of intelligent people continue to believe – and repeat – the story that Equalization reforms made in 2007 were designed to screw Newfoundland and Labrador.

But it is most emphatically not true.

Regular readers will recall that we’ve looked at this idea that Ottawa might come through will piles of cash. Not gonna happen.  The Fiscal Stabilization Fund money is really small, probably about $31 million.  Newfoundland and Labrador doesn’t qualify for Equalization, which is basically a kind of welfare for provinces.

And even if the feds started mucking around with Equalization to give this province some cash, they’d wind up having to pay out even more money to others just out of fairness.  The federal government can;t afford to bail everyone out.

What’s more,  they shouldn’t have to bail out provinces like Newfoundland and Labrador given that the government takes in more money per resident than most other provincial governments and spends more than just about all of them, except maybe Alberta.

Dwight Ball could have said the simple truth:  the federal government isn’t in a position to bail out all the provinces who need help.  They would have a bigger financial problem of their own and that’s no good either.  He could have said that, as the head of a responsible government, we’d stand on our own two feet.

But for some completely unfathomable reason, Ball went with a widely held but completely false tale of woe.

The truth is that in the run-up to the Equalization changes, the provincial government here actually supported every possible way of counting resources from mining and oil and gas.   They supported half in/half out.  They supported all-out.  And they even supported all-in,  In fact, the begging letter Danny Williams sent to the federal party leader sin 2005 asked for the complete inclusion of all revenues.

Stephen Harper promised the complete exclusion of natural resources revenues, even though that’s not what Danny Williams asked him for.  Danny Williams later attacked Harper for breaking his promise.  Williams did so largely based on an assessment by Wade Locke that was, to say the least, about as far from an objective, impartial, and thorough assessment.

The federal Equalization reform in 2007 calculated revenues two ways.  One calculated a national average of all 10 provinces, hiding only half non-renewable revenues.  The second hid all non-renewable revenues.  On top of that, the federal government imposed a cap on the amount a province’s entitlement.  The reason for the cap wasn’t Newfoundland and Labrador.  It was Ontario.  Canada’s most populous province was qualifying for Equalization, a system that pays out based on population.

Even allowing for the cap, Newfoundland and Labrador made so much money from oil, it wouldn’t qualify for Equalization anyway. Danny Williams continued to take every position on the fact the province didn’t qualify for Equalization.  It was good if Williams wanted to praise himself and his colleagues. It was bad if he needed to bash Ottawa or find an excuse for his persistent financial mismanagement of the province.

What Danny Williams or Wade Locke  and now Dwight Ball said about Equalization reform?
Nothing could be further from the truth.

Kinda funny, actually, given the number of times Danny said that about others. Kinda odd, though, considering Dwight Ball doesn’t gain anything from repeating someone else’s false statements.