NDP leader Earle McCurdy called the province’s major open line show on Thursday and by the sounds of things he hasn’t backed off the position that the size of the government’s financial problems will mean more cuts.
Sure he said he was opposed to austerity, but what Earle did say was that the government will have to cut jobs, lay people off and slash spending to cope with its financial problems.
Potato, potato, Earle.
A couple of years after his war with one prime minister, Danny Williams was locked in another war with another federal first minister.
Williams was demanding compensation for yet another supposed injustice.
“What I said before and I said going in, this is about principles,” Williams told reporters in November 2007 “but it's also about money as well. At the end of the day, the promise and the principle converts to cash for the bottom line ….”
The pattern set in 2004 was repeating itself.
The provincial government has tarnished the 25th anniversary of the Atlantic Accord by issuing a news release which contains false information:
In 2005, the Williams Government improved upon the benefits in the original Atlantic Accord by negotiating a new deal that retained a greater share of offshore revenues for the province. The new revenue-sharing arrangement reached between Premier Danny Williams and then Prime Minister Paul Martin resulted in Newfoundland and Labrador receiving 100 per cent of its offshore revenues for the first time, free from any clawbacks while an equalization-receiving province. he 2005 Accord enabled Newfoundland and Labrador to truly be the “principal beneficiary” of the petroleum resources off its shores. …[Emphasis added]
“The original Atlantic Accord has greatly assisted in the pursuit of long-term economic prosperity and self-reliance for Newfoundland and Labrador, and these benefits were secured and improved in 2005 when Premier Williams succeeded in convincing the Federal Government of the inequity Newfoundland and Labrador had endured for years in not receiving the full benefit of the exploitation of its offshore resources,” said Acting Premier Dunderdale.
All of that is completely false.
Provincial government officials should know it is utterly untrue false because they link to the text of the 2005 deal in the news release. Here’s what the 2005 agreement says in plain English:
2. This document reflects an understanding between the Government of Canada and the Government of Newfoundland and Labrador that:
- Newfoundland and Labrador already receives and will continue to receive 100 per cent of offshore resource revenues as if these resources were on land; [Emphasis added]
There were no changes to revenue-sharing spelled out in the 1985 Accord. Under the 1985 agreement the provincial government alone sets and receives all offshore oil government royalties. The federal government collects only what it would from any other industry in the way of business and personal taxes.
Despite ludicrous claims at the time it was signed, the 2005 agreement delivered nothing more than a single $2.0 billion payment to the provincial government.
That’s it.
The Equalization formula continued to work as it is supposed to work. As forecast in 2005, the provincial stopped qualifying for Equalization payments in 2009.
When that happened, the “clawback” described in today’s news release didn’t hit zero. Rather it became a full - 100% - clawback of all offshore revenues.
The 2005 made no changes to any of the provisions of the 1985 agreement.
The 1985 Accord alone forms the basis for the current offshore oil industry and for current provincial prosperity.
Here’s the way your humble e-scribbler laid it out in 2004/2005:
First, [under what became the 1985 Accord] the provincial government would gain the right to manage the offshore jointly with the federal government, particularly with respect to setting the mode of production. This had significant implications for local benefits, as evident from construction of the gravity-based system (GBS) for Hibernia.
Second, the provincial government gained the right to collect revenues from the resources as if they were on land. This established that the provincial government would determine its own revenues to be collected from offshore oil and gas development and production just as a province like Alberta is able to do. These revenues would, de facto, be treated as “own source” revenues like income tax, sales tax and other similar levies.
Third, the province as a whole would benefit from the development of local jobs. Mulroney committed that oil-related infrastructure would be sited in the province, where possible. This was no small matter. Mulroney’s letter [Brian Mulroney to Brian Peckford, 1984] contains strong language and conveys a deliberate intent on the part of the future Prime Minister to provide this province with significant job and business benefits. “Local job creation and labour development would be of paramount concern.”
Fourth, the province would benefit since the provincial government would not see a dollar-for-dollar loss of Equalization payments that would naturally result from growth in the government’s own-source revenues. The Government of Newfoundland and Labrador would receive all of its own-source revenue, potentially a portion of any federal shares in the offshore, and as well, additional payments to offset any losses from Equalization.
The same general approach was taken by the Liberal administrations which preceded Mr. Mulroney. For example, the comprehensive proposal made by the Government of Canada in 1982 stated that “it is recognized that Newfoundland should enjoy the major share of the revenue that offshore resources are expected to generate…” and that “the people of the province would realize the greatest and the most direct benefits from the development of offshore oil and gas resources in terms of growth and income, jobs, opportunities for new businesses, and significant new provincial government revenues.”
The federal Liberal proposal on revenue sharing was linked inextricably to the overall performance of the provincial economy and hence may be taken as further evidence of the extent to which the federal government before 1984 viewed the benefits from the offshore to this province to be greater than just the sums flowing to the provincial government’s treasury.
While local job benefits merited two short paragraphs in the original Mulroney letter, both the Accord itself and the enabling legislation provide an elaborate structure aimed at managing local benefits. No one can underestimate the value of local industrial benefits to the province; nor can anyone easily dismiss the contention that the architects of the Atlantic Accord saw local industrial development as a significant factor in establishing this province as the principal beneficiary of offshore oil and gas development. [Paragraphing altered to improve readability]
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Danny Williams once scorned the O’Brien formula that counted only 50% of the province’s oil and mineral revenues saying that the concept had “Ralph Goodale’s fingerprints” all over it.
Premier Danny Williams called the report "some kind of joke - otherwise it was just a bad dream."
He said the idea unfairly penalizes Newfoundland and Labrador, and is essentially the same plan that led him to storm out of first ministers' meetings in the fall of 2004.
"It's got (former Liberal finance minister) Ralph Goodale written all over it," Williams told reporters at Confederation Building. [Rob Antle and Jamie Baker, “Report would erase Accord gains”, Telegram, 6 June 2006]
Instead, Williams wanted a formula that didn’t count any of the province’s non-renewable resource revenues. Danny Williams wanted that 100% exclusion so badly he went to war with Stephen Harper hurling every name imaginable at the Conservative leader for not living up to the campaign promise in two elections.
Now, that 100% exclusion isn’t the good deal after all.
Now the one with Ralph’s fingerprints all over it is the right one.
And Danny Williams wants it.
The fingerprints one.
Not the no-greater-shame-than-a-promise-unkept one.
He wants it so badly he’s prepared to go to war to undo a slight targeted directly and deliberately at Newfoundland and Labrador.
Well, maybe not war, exactly he said a couple of days after launching the latest Equalization jihad.
Maybe a one year delay.
Still keeping track?
The tale of Danny Williams’ positions on Equalization since 2003 has more twists and turns in it than a road along Newfoundland’s rugged coastline, and the feisty Premier has followed every one doubling back on himself countless times in five short years.
Actually, the O’Brien 50% formula is good this time only because it apparently allows the 1985 Atlantic Accord – the real Atlantic Accord – to unlock more cash for the provincial coffers.
But Danny wasn’t always in love with the 1985 Accord.
Shortly after coming to office, Danny Williams launched the first of his now trademark hyperbolic assaults on a deal he said was robbing Newfoundland and Labrador of its offshore oil revenues and sending them off to Ottawa.
Nothing could have been further from the truth and those of us who dared say so publicly at the time suffered either scorn or curious pity for daring to doubt the Premier’s judgment.
When Williams snagged a $2.0 billion cheque from Paul Martin and Ralph Goodale in January 2005 as part of a new offshore transfer deal, the first thing he had to admit was that nothing had been further from the truth than the line he’d been spinning:
Newfoundland and Labrador already receives and will continue to receive 100 per cent of offshore resource revenues as if these resources were on land…
What’s more, a Telegram story from late January 2005 by Rob Antle contained this nugget of truth:
Because of quirks in the system - Accord offsets are tied to previous-year equalization drops - Newfoundland actually got back slightly more than 100 per cent between 1999 and March 2004.
The province took in $429 million in offshore revenues, a senior federal official said, while receiving total offset payments of $466 million.
Senior provincial officials had no beef with those figures, acknowledging that contention sounded accurate.
In effect, up to March 2004, the so-called clawback had no claws.
It never did.
And that 2005 deal?
Well, the public heard all sorts of predictions - at the time - that the deal was worth $2.6 billion up front (even though the cheque was for $2.0 billion) and maybe even more later on.
Jack Harris, then the provincial New Democratic Party leader predicted $4.9 billion. Wade Locke, destined to become the Premier’s favourite economist, predicted $5.2 billion over the first eight years of the deal.
Of course, at the time, projections (including one by Wade Locke) had the province going off Equalization within five years – just as it did – even without the insanely high oil prices that turned up. The odds of getting more cash was in doubt from the beginning.
Nonetheless they persisted.
In fact, at least one of them got annoyed when someone point out that his math skills were suspect.
As it turned out, the deal was never worth more than the first cheque.
The provincial government doesn’t qualify for Equalization any more and as such can’t earn any more credits against the cash advance. There is more than $1.1 billion sitting in the credit column, according to the latest audited public accounts for the province and odds are it will never be drawn down let alone generate double as the politicians originally predicted.
This pattern of flips, flops and alarums on the big issues isn’t the only aspect of the annual Equalization tirade.
In December 2007, former finance minister Tom Marshall announcing the government had opted for the O’Brien formula in late 2007, kicking the crap out of the 1985 Accord offset formula and former premier Brian Peckford along the way. Four months later, Marshall announced the provincial government would be sticking with the old Equalization formula and the 1985 offset in his spring budget. All the while, Marshall fell over himself trying to explain offsets and the virtues of O’Brien versus 1985.
Note at the time that Marshall indicated sticking with the old formula would offer the best cash return over the following five years.
Then there was the Great Cap. Wade Locke’s initial assessment [full article here] of the 2007 federal budget led him to recommend switch to O’Brien/50% in 2009 to maximize revenues. He then sparked a controversy when he discovered caps on the province’s offset deals the feds hadn’t previously disclosed. Locke’s analysis served as fuel for the provincial government’s attack on the federal government. It produced no assessments of its own but relied exclusively on Locke’s public analysis.
Locke then produced a new analysis that still excluded an assessment of 100% exclusion but which found that - get this - the old fixed formula delivered a better deal than O’Brien/50%.
Incidentally, Danny Williams told a CBC Radio audience on March 26, 2007 that the provincial government planned to flip to O’Brien in 2009 to maximize its cash take.
Then, most recently, Wade Locke told NTV News on January 28 that the net loss to the province would be $500 million or less from the most recent federal budget. Less than a day later, he revised his projections after speaking with provincial finance officials.
A proviso on his estimate prepared for the Atlantic Provinces Economic Council released January 29 suggests more information is needed. Nevertheless, Locke’s new assessment – prepared and released less than a day after his first assessment - now backs the provincial version.
Oddly, Locke’s new observations do not appear to include an assessment of O’Brien/100%. It’s even more odd considering that his 2007 analysis suggested 100% exclusion was the best. Now it is supposedly not good at all.
Confused?
That’s not surprising.
Confusion appears to be the order of the day when it comes to Newfoundland and Labrador and fiscal issues.
Makes you wonder, though, with all this flipping, flopping and general policy confusion, why would anyone – including reporters and politicians - accept anything these guys say without evidence.
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The crew that put together's CBC's usually fine "Reality Check" can be forgiven if they missed a few points by a country mile in a summary of the Family Feud.
Forgiveness is easy since the issues involved are complex and - at least on the provincial side since 2003 - there has never been a clear statement of what was going on. Regular Bond Papers readers will be familiar with that. For others, just flip back to the archives for 2005 and the story is laid out there.
Let's see if we can sort through some of the high points here.
With its fragile economy, Newfoundland and Labrador has always depended on money from the federal government. When they struck oil off the coast, the federal government concluded it would not have to continue shelling out as much money to the provincial treasury. N.L.'s oil would save Ottawa money.
Not really.
Newfoundland and Labrador is no different from most provinces in the country, at least as far as Equalization goes. Since 1957 - when the current Equalization program started - the provincial government has received that particular form of federal transfer. So have all the others, at various times, except Ontario. Quebec remains one of the biggest recipients of Equalization cash, if not on a per capita basis than on a total basis. Economic "fragility" has nothing to do with receiving Equalization.
In the dispute over jurisdiction over the offshore, there was never much of a dispute as far as Equalization fundamentally works.
Had Brian Peckford's view prevailed in 1983/1984, Equalization would have worked just as it always has. As soon as the province's own source revenues went beyond the national average, the Equalization transfers would have stopped.
Period.
That didn't work out. Both the Supreme Court of Newfoundland (as it then was called) and in the Supreme Court of Canada, both courts found that jurisdiction over the offshore rested solely with the Government of Canada. All the royalties went with it.
In the 1985 Atlantic Accord, the Brian Mulroney and Brian Peckford governments worked out a joint management deal. Under that agreement - the one that is most important for Newfoundland and Labrador - the provincial government sets and collects royalties as if the oil and gas were on land.
And here's the big thing: the provincial government keeps every single penny. It always has and always will, as long as the 1985 Accord is in force.
As far as Equalization is concerned, both governments agreed that Equalization would work as it always had. When a provincial government makes more money on its own than the national average, the Equalization cash stops.
But...they agreed that for a limited period of time, the provincial government would get a special transfer, based on Equalization that would offset the drop in Equalization that came as oil revenues grew. Not only was the extra cash limited in time, it would also decline such that 12 years after the first oil, there'd be no extra payment.
If the province didn't qualify for Equalization at that point, then that's all there was. If it still fell under the average, then it would get whatever Equalization it was entitled to under the program at the time.
The CBC reality check leaves a huge gap as far as that goes, making it seem as though the whole thing came down to an argument between Danny Williams and Paul Martin and then Danny and Stephen Harper.
Nothing could be further from the truth, to use an overworked phrase.
During negotiations on the Hibernia project, the provincial government realized the formula wouldn't work out as intended. Rather than leave the provincial government with some extra cash, the 1985 deal would actually function just like there was no offset clause. For every dollar of new cash in from oil, the Equalization system would drop Newfoundland's entitlement by 97 cents, net.
The first efforts to raise this issue - by Clyde Wells and energy minister Rex Gibbons in 1990 - were rebuffed by the Mulroney Conservatives. They didn't pussy foot around. John Crosbie accused the provincial government of biting the hand that fed it and of wanting to eat its cake and "vomit it up" as well.
It wasn't until the Liberal victory in 1993 that the first efforts were made to address the problem. Prime Jean Chretien and finance minister Paul Martin amended the Equalization formula to give the provincial government an option of shielding up to 30% of its oil revenue from Equalization calculations. That option wasn't time limited and for the 12 years in which the 1985 deal allowed for offsets the provincial government could always have the chance to pick the option that gave the most cash. It only picked the wrong option once.
The Equalization issue remained a cause celebre, especially for those who had been involved in the original negotiations. It resurfaced in the a 2003 provincial government royal commission study which introduced the idea of a clawback into the vocabulary. The presentation in the commission reported grossly distorted the reality and the history involved. Some charts that purported to show the financial issues bordered on fraud.
Danny Williams took up the issue in 2004 with the Martin administration and fought a pitched battle - largely in public - over the issue. He gave a taste of his anti-Ottawa rhetoric in a 2001 speech to Nova Scotia Tories. Little in the way of formal correspondence appears to have been exchanged throughout the early part of 2004. Up to the fall of 2004 - when detailed discussions started - the provincial government offered three different versions of what it was looking for. None matched the final agreement.
The CBC "Reality Check" describes the 2005 agreement this way:
The agreement was that the calculation of equalization payments to Newfoundland and Labrador would not include oil revenue. As the saying goes, oil revenues would not be clawed back. Martin agreed and then-opposition leader Harper also agreed.
Simply put, that's dead wrong.
The 2005 deal provided for another type of transfer to Newfoundland and Labrador from Ottawa on top of the 1985 offset payment. The Equalization program was not changed in any way. Until the substantive changes to Equalization under Stephen Harper 100% of oil revenues was included to calculate Equalization entitlements. That's exactly what Danny Williams stated as provincial government policy in January 2006, incidentally. The Harper changes hid 50% of all non-renewable resource revenues from Equalization (oil and mining) and imposed a cap on total transfers.
As for the revenues being "clawed back", one of the key terms of the 2005 deal is that the whole thing operates based on the Equalization formula that is in place at any given time. Oil revenues are treated like gas taxes, income tax, sales tax, motor vehicle registration and any other type of provincial own-source revenue, just like they have been as long as Equalization has been around.
What the federal Conservatives proposed in 2004 and 2006 as a part of their campaign platform - not just in a letter to Danny Williams - was to let all provinces hide their revenues from oil, gas and other non-renewable resources from the Equalization calculations. The offer didn't apply just to one province. Had it been implemented, it would have applied to all.
That was clear enough until the Harper government produced its budget 18 months ago. What was clear on budget day became a bit murky a few days later when Wade Locke of Memorial University of Newfoundland began to take a hard look at the numbers.
Again, that's pretty much dead wrong.
It became clear shortly after Harper took office in 2006 that the 100% exclusion idea from the 2004 and 2006 campaigns would be abandoned in favour of something else. There was nothing murky about it at all. So plain was the problem that at least one local newspaper reported on a fracas at the Provincial Conservative convention in October 2006 supposedly involving the Premier's brother and the Conservative party's national president. That's when the Family Feud started.
As for the 2007 budget bills which amended both the 1985 and 2005 agreements between Ottawa and St. John's, there's a serious question as to whether the provincial government actually consented to the amendments as required under the 1985 Atlantic Accord.
The story about Equalization is a long one and the Family Feud - a.k.a the ABC campaign - has a complex history. There's no shame in missing some points. It's just so unusual that CBC's "Reality Check" was so widely off base.
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"When I use a word," Humpty Dumpty said in a rather scornful tone," it means just what I choose it to mean -- neither more nor less."
"The question is," said Alice, "whether you can make words mean so many things."
"The question is," said Humpty Dumpty, "which is to be master -- that's all."
Through the Looking Glass: and what Alice found there
Tom Marshall must have received his law degree from the University of Wonderland.
You know.
The place Alice went.
She ran into Tom's old law prof, Humpty Dumpty, who first taught him that the words on the page are meaningless plastic things.
Humpty Dumpty's lessons took.
Last week, education minister Joan Burke said that, in picking a new president for MUN, the university board of regents would send over a list of names and cabinet would make the appointment since - as the law provides, according to Burke - the president's job is a cabinet appointment.
Hang on there, said a number of people including Grenfell professor Dr. Paul Wilson who insist that the words in the law - 'the board of regents shall appoint a president" - doesn't mean that cabinet does the job.
Marshall, a former attorney general, insists that Wilson is being a stick-in-the-mud, and that Wilson is "not helping" the university.
There's that favourite government phrase "not helping" or "being unhelpful".
In this case, it would mean pointing out the obvious bankruptcy of the government position, but that's really a separate issue.
Marshall, sounding a bit like a 1960s hold-over, insisted that the professor was being square, Man.
What's interesting is the way Marshall (LLB, U Wonder) described Wilson's view:
Everyone is entitled to their view. He’s given his analysis. I consider his analysis a literal interpretation — a strict, constructionist interpretation. A proper interpretation of the legislation would have to consider the wording in context. When you consider the wording in context, the minister of Education plays a very important role.
"Strict, constructionist interpretation".
You will note of course, that no where in Marshall's comment does he say that Wilson is actually wrong. Not at all.
Not if you actually read what Marshall said: according to Marshall, the legislation properly read with all the words in their context means that the education minister plays an important role in the process.
Marshall - clever fellow - didn't define that role, however. The role envisaged in the legislation is that the education minister takes the name of the appointed person to cabinet for approval. That's the role. it's largely administrative in nature.
And no where does it say cabinet picks, which is what Burke insisted she and her colleagues will be doing.
But still, according to Marshall, Wilson is wrong because he is using a "strict, constructionist interpretation"?
Here's a simple solution.
Let's put this before a judge.
They are easy to find down on Duckworth Street. Odds are, we could find one of them with a few spare minutes in between trips to the neighbourhood Timmies to hear the learned former attorney general appear on behalf of the Crown to argue the matter. Now we'd be doing this no just to resolve the dispute between Marshall and Wilson, but to settle on the legality of the cabinet's move in this extremely important crisis.
The justices would likely fight over the chance to hear this one.
And they get paid to resolve disputes.
After all, government has been extremely successful in this Mad Hatter, March Hare approach to the things before.
There was the now famous October 2004 interview Danny Williams gave to the CBC's Carole MacNeil. According to Williams, once the province didn't qualification for Equalization, clawbacks wouldn't be 100 per cent but zero., even though when the province qualified for just a fraction of a penny of federal handout, the clawback was 99.9999999 per cent.
Then there was Tom Rideout's classic time travel episode:
Consider Rideout's efforts to explain that while today might well have been June 14 when the bill was passed, tomorrow did not actually mean June 15. Rather it meant some date four months hence:
"Since Green didn't say the act comes into effect today, we, in consultation with him, said what can come into effect today comes into effect today, what needs time to come into effect tomorrow comes into effect tomorrow, and tomorrow is Oct. 9, 2007"
Or Marshall gamely trying to criticise Brian Peckford and in the process fibbing royally about the province's finances.
Or on legal matters, just ask Don Burridge, the current deputy attorney general and, odds are, the poor sod who would carry this threadbare Stanfield's of an argument downtown to see what others made of it.
Burridge is the extremely talented lawyer who was in the unfortunate position of having to carry forward government's argument in Ruelokke. The government argument, one suspects, was dictated to him by the learned barristers in cabinet but he gamely laid it out.
They tried the argument that a clause in the 1985 Atlantic Accord which said the hiring tribunal's decision was binding on both the federal and provincial, governments really meant that the courts couldn't intervene in the matter.
Mr. Justice Halley loved that one, one suspects, so much so that he likely had to stab himself repeatedly with a fork under his robes so that the pain would keep him from rolling on the floor in laughter.
We all know the outcome of that foray into the courts.
All of this just goes to show just exactly how desperate the cabinet is to try and escape the Memorial mess they've created. Tom Marshall is trotting out all sorts of verbiage to try and obscure things.
The problem for Marshall in this little drama is that he is stuffed in the role played before by Burridge. He is carrying a preposterous argument and he knows it.
But if he is game, there are a few people wearing black robes in the later summer heat who will gladly sit and enjoy the government's revival of Through the Looking Glass or Alice in Wonderland.
We'd all enjoy the play immensely even if the outcome is predictable.
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Doyle Pleased With Harper's Letter
Norman Doyle, Conservative incumbent in St. Johns East, is pleased that Stephen Harpers' letter to Premier Williams contains a number of significant commitments to this Province.
In his letter, said Doyle, Stephen Harper made commitments on federal financial support for the Trans Labrador Highway and the Military Base at Goose Bay. He also committed the federal government to providing financial guarantees with regard to the Lower Churchill Project.
Doyle noted that Harper also committed to setting up a Territorial Defence Battalion, composed of 100 regular and 400 reserve soldiers, in the St. Johns area.
Mr. Harper also reiterated his willingness to invoke fisheries custodial management out side the 200 mile limit, said Doyle, and to exempt all non-renewable resource revenues from the ravages of the Equalization clawback.
Doyle recalled that it was Stephen Harpers commitment on offshore revenues that forced Prime Minister Martins hand on the issue in the Federal Election of June, 2004.
Unlike the Liberals, said Doyle, we don't have to be forced to help build a stronger Newfoundland & Labrador.
The Conservative Party believes that a stronger Newfoundland & Labrador means a stronger Canada so many of our Partys policies are designed to give the provinces the tools to help build a stronger and more prosperous nation.
"When I use a word," Humpty Dumpty said, in a rather scornful tone, "it means just what I choose it to mean - neither more nor less."
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master - that's all."- Charles Ludwig Dodgson, (Lewis Carrol), Through the Looking Glass
A Better Deal on Oil and Gas RevenuesOf particular interest, both Premier Williams and other Conservative party commentators have linked provincial government offshore revenues with the concept of the province being the principal beneficiary of offshore development under the Atlantic Accord. In his news release of 12 March 2004, Premier Williams said:
The Government of Newfoundland and Labrador will collect billions of dollars in revenues over the next 20 to 30 years from oil, natural gas, and other minerals. Less than a quarter of the revenues will stay in the Province. Ottawa will simply deduct most of the increased revenues from equalization payments. This deduction is known as "the equalization clawback".
The clawback denies us the opportunity to build a better future for our children and grandchildren. We should not have to consume our non-renewable resources for current expenses and leave none of the inheritance for our children and grandchildren.
"Essentially, we are asking the federal government to live up to the spirit and intent of the "principal beneficiary" component of the Atlantic Accord. Currently, the federal government receives 86 per cent of the revenues of our offshore petroleum resources, while the province receives a meager 14 per cent," added the Premier. "This revenue sharing is completely contrary to the spirit and intent of the accord and must be addressed now before these non-renewable resources are gone forever. Our province is facing a very serious fiscal situation which must be addressed. We are making tough choices to manage our expenditures and to grow our revenues at the provincial level. We, as a province, are putting into place a long-term plan to grow our economy; however, Ottawa must also be a part of the solution."The overhead slide presentation describes the Atlantic Accord as being a ‘“Memorandum of Agreement between the Government of Canada and the Government of Newfoundland and Labrador on offshore oil and gas resource management and revenue sharing.”’ The paper includes several slides purporting to confirm that “[a]nalysis shows that Newfoundland and Labrador will not be the principal beneficiary of the revenues generated from oil and gas developments.”
9. Mr. Martin’s commitment is worth nothing unless he puts in writing that “principal beneficiary” means that Newfoundland and Labrador is to receive 100 per cent of all offshore revenues, including royalties, provincial corporation income taxes, all fees and bonuses etc. on a net basis with no clawback effect and to be received until we become a “have” province with agreed benchmarks as to when “have” status is achieved. [Run-on sentence in the original. ]Flowing from these statements of the provincial government position, four issues must be addressed. These are ownership of offshore resources, the origins of the Atlantic Accord and federal government intentions, the existence of a “clawback” in the Equalization program, and definition of the term “principal beneficiary”.