Federal finance leprechaun Jim Flaherty has been signaling the need to cap the Equalization system this year.
"It's a federal program; we will put a limit on the growth of it," Mr. Flaherty said. "This is not something that is discretionary. We must do this, otherwise the integrity of the program will be under attack."
Flaherty says that in the face of a possible federal deficit for the first time in ages (i.e. the last time the Conservatives ran the place), it won't be possible to have a 15% annual increase in the funds allocated to the federal transfer.
Based on government data, federal transfers to other levels of government have surged 57% in the past five years, to $46.1-billion in the most recent fiscal year from $29.3-billion in 2003-04.
"In this time of fiscal uncertainty, we cannot sustain that rate of growth," Mr. Flaherty said this week.
Flaherty is likely to lay out the whole thing for his provincial counterparts at a meeting in Toronto on Monday.
Newly minted provincial finance minister Jerome Kennedy will be at the meeting.
Okay.
For the past five years, the current Provincial Conservative administration has been hammering away at the need for increasing federal transfer payments to Newfoundland and Labrador.
For the past two, the entire Family Feud between the Provincial Conservatives and the their federal cousins centred on an effort to get Equalization payments in addition to oil and gas revenues, even if, under ordinary circumstances, Newfoundland and Labrador wouldn't qualify for the Equalization top-up. In fact, this idea of getting effectively 200% of oil revenues (all the cash plus Equalization hand-outs) is the original demand Danny Williams made to Paul Martin.
That's why it is so bizarre that the provincial government talked about anything but Flaherty's remarks over the past couple of days.
Trivia was the order of the day at the cabinet shuffle and what wasn't trivia was pretty much stock stuff. Take a look at the raw scrum tape - via CBC - and you'll see the lightweight routine.
There's a reference to being fine on the current budget, without understanding that means increasing public debt if the budget targets are met.
There's some slagging of the oil sands and a claim that there won't be any delay on Hebron. No one apparently noticed that the Hebron project hasn't been sanctioned yet. How exactly can you forecast "no delay" in a project that has no timeline yet?
The ultimate superficial commentary came on the matter of representation. In Ottawa, there's not a problem since it's like the local cabinet where everyone looks after everything everywhere. Later on, the Premier refers to Susan Sullivan and filling in the hole in the dough, giving proper cabinet representation for a region of the province not previously represented in the Conservative cabinet. Sarah Palin couldn't have reasoned it anymore consistently, right down to insisting - in a manner of speaking - that a little fellow from up the shore could see Labrador from his house.
But nothing of the substantive issues facing the province, beyond a comment that there might theoretically be some difficulty in forecasting oil prices.
As for the consistent set of demands from the current cabinet for more cash hand-outs from Ottawa and Jim Flaherty's comments, there was nary a peep either from the cabinet or from reporters.
The silence was deafening.
Well, except for the CBC audio picking up messages coming to the Blackberries in the room.
The end result is that one wonders what, exactly will be the policy direction taken by cabinet "on a go forward basis". Until now, the cabinet has been fairly consistent in its remands for reparations from Ottawa, in its insistence that it can go-it-alone provided Ottawa ponies up the cash. The same ministers sit in place today, with a very minor number of exceptions, as sat in place in October 2003.
Yet, there is an evident change in perspective.
It can't be driven by the prospect of going off the Equalization system. That was forecast in 2004, even without the subsequent transfer deal with Paul Martin.
There's something else behind it.
You can tell by what isn't being said.
-srbp-
