Living in a fog: one Connie offers his thoughts

Mainland Connies think the people of Atlantic Canada are, to quote the Wonderful Grand Band, living in a fog, living in a dreamworld.

Nonsense like this stuff from the ironically titled My Conservative Dreamworld should give a good idea of how much traction the provincial government's arguments have out past the Port au Port peninsula.

If the Premier can't get at the Conservative vote base, there's not much hope for his so-called ABC option. He doesn't need to convince Liberals and New Democrats that Stephen Harper is a bad idea; they didn't vote for him in the first place.

In passing, it is worth noting how little this form of institutionalized bribery actually benefited its instigators. The concession on ownership rights (by Mulroney) and on natural resource revenue clawbacks (by Paul Martin) did not produce quite the electoral harvest those two gentlemen were anticipating. This also has its own rationale: when voters have grown accustomed to welfare they view it as a right, and then why should they sell their votes for something that is rightfully theirs? The Atlantic Accords is therefore that rare political event that is worse than a corrupt vote-buying exercise - namely a failed, corrupt vote-buying exercise.

Some of these guys actually want to demolish the 1985 Atlantic Accord.

Think about it.

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Wait five minutes

Only a couple of days after dismissing legal action against the federal government as a waste of time, Premier Danny Williams is considering joining Saskatchewan in its case against the Harper administration on Equalization.

The Premier said he hadn't considered the idea of legal action, preferring to try the matter in the court of public opinion.

Meanwhile, McGill constitutional law professor Stephen Scott says there is a way to put the matter in front of the courts.

The fastest, most economical route through the legal system would be to start an action for a declaratory order to see if the agreement is legally binding.

Then Nova Scotia could use the power of reference that every province has in its statute books to send a set of detailed questions to the court of appeal.

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300 or all politics is local

How many times have provincial cabinet ministers or the Premier's parliamentary assistant claimed that the 2005 Equalization offsets deal put $300 million in the provincial treasury this year?

Lots of times? Too many times.

Paul Oram did it this morning speaking with Randy Simms on VOCM's Open Line.

But here's the thing: it isn't true.

The 2005 offshore deal has not added a single penny of new cash to the provincial coffers since 2005.

Here's why.

The 2005 Equalization offsets deal provided for two specific things that are relevant. First, there was an advance payment of $2.0 billion. Second, the clause covering that advance payment also provided:

Amounts calculated starting in 2004-05 under clauses 3 and 4 will not result in actual payments to the province until such time as their cumulative value exceeds $2.0 billion. [Emphasis added]

The cheque was received and applied against a portion of the unfunded pension liability in 2005.

Spent.

All that has occurred over the past four budgets (FY 2004 to FY 2007) is that the finance minister is accounting for the payment that the province is entitled to receive under the deal.

There's no new cash involved. That's because there won't be new cash until the full $2.0 billion has been accounted for annually. right now, the four year total (including the paper money cabinet minister talk about for this year) is $847 million. Simple calculation: another $1.153 billion will have to be drawn down before that deal actually generates new cash in the bank.

Take a look at any of the calculations done by Wade Locke and you will see pretty quickly that the 2005 deal will not generate any new cash before the deal expires. The provincial government will not qualify for Equalization under either system - fixed pot or 50% exclusion - long before the add-on benefits reach that figure of $1.153 billion.

In some respects, the ongoing racket over the so-called side deals is a bit overblown. The Atlantic Accord (1985) provided for temporary, declining Equalization offsets intended to cushion the provincial treasury against a sudden drop in transfers. The transitional cash was intended to support debt reduction and infrastructure development.

Improving the financial lot of Newfoundland and Labrador makes sense for the province and it makes eminent sense for the country. Temporary transfers from the federal government to Newfoundland and Labrador for a well-understood purpose, even if linked to the Equalization program, is backed by precedent and the focused nature of the transfers doesn't come close to destroying the fundamental fairness of the Equalization system.

Ontarian taxpayers, among others, can rest easy that they will not be funnelling cash into a gaping maw. The whole thing is set up as a limited program. Take a look at even the most recent assessment of the Equalization program and the offsets, and one thing becomes clear: Newfoundland and Labrador's economy will do so well in the next four years that the provincial government will become a so-called "have" province in short order. Ontarians, and others upset about the offsets arrangements should follow a simple rule: don't look at the theatrics continuously surrounding the 2005 agreements; look at the facts.

Even the 2005 deal is a temporary arrangement with triggers designed to shut the whole cash tap off when the provincial government becomes a "have" province. The final agreement - as opposed to the October draft - has a dual trigger to shut down the cash flow. The province must be meet two conditions to keep receiving offsets; the draft version had an "either/or" option that made it easier to extend the deal under any Equalization formula.

Politically, it would impossible for any federal government of any stripe to produce an Equalization program that ignored completely non-renewable resource revenues. It wasn't possible in 1962 when the object of attention was Alberta and it sure as heck isn't possible today when the focus is on Nova Scotia and Newfoundland and Labrador. Only the most fool-hardy of political parties or a party with no hope of actually forming a government would make a political promise that is politically untenable.

And in Newfoundland and Labrador? Well, aside from the people who voted Conservative on the basis of the Equalization promise - were there any? - few people are likely to organize a lynch mob for Conservatives now or in the future. Sure, there are plenty of provincial Progressive Conservatives who took the cue from the Premier and worked on Conservative campaigns. Realistically, though, Equalization wasn't likely a vote driver except for a very limited number of people.

Conservative candidates may face some heat next time and a year from now they may face a vengeful provincial premier, but realistically, they can rest easy knowing that a year is a long time in local politics. Things change. In 2004, Danny Williams rejected Harper's 100% exclusion option. A year later, Harper supposedly delivered the pyjama's for Danny's cat. A year after that, Harper is "untrustworthy" and his Conservative members of parliament are "traitors".

If nothing else, Conservatives have likely taken heart from the most recent regional poll. That's why they voted for the budget on third reading, despite the intense political pressure. Look at the whole picture: the only place when Connies are currently facing a real problem is Newfoundland and Labrador. The federal Conservatives likely are counting on Danny Williams' limited traction outside his own province and, given the available evidence, he doesn't seem to have much traction.

That's because his messages are aimed mainly at his own province. His communications plan ignores the attitudes toward his goals and his approach; it makes no effort to put the local issue in a context that genuinely counteracts perceptions. It does nothing to connect with his audience except, as in the case of teachers and students, with their instinctive, ideological opposition to the federal Conservatives.

Behind it all, though Danny Williams knows full well that his province is not hurting financially. In the worst case scenario, that is where he plays it smarts and opts to maximize the cash, federal transfers to Newfoundland and Labrador through Equalization and offsets will be $2.787 billion over the next four years.

The gap between that and the old Equalization system, according to APEC figures, is less than $300 million a year over that period and that amount will likely be generated in the economy anyway. The Premier knows there will be new investment in western Labrador through Consolidated Thompson. He can count on a couple of other major developments in the next five years or so and maybe, just maybe, there will be renewed interest in the offshore oil and gas industry.

Danny Williams is a smart guy and he is playing the whole Equalization racket very smartly. If he has learned one thing over the past three years it is that Danny Williams can make whatever claim he wants and people will react to it without thinking. That's the $300 million thing, for example. He knows he can create a firestorm of domestic political controversy that makes him look good and makes others look like, well, traitors. It reinforces his status as the only force in provincial politics and that's really the point of the whole exercise.

All politics is indeed very local.

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Why cabinet avoided a public inquiry

When judges have real powers they can upset carefully concocted sets of excuses.

Like say Chief Justice Derek Green's conclusions on the secret bonus money handed out to members of the House of Assembly, after the Accountability and transparency police came to office.

Bear in mind Green's terms of reference did not give his commission the powers of a public inquiry.

Yet he was still able to make this observation, as quoted in the Telegram:

MHAs contended the two events were unrelated.

The chief justice disagreed.

"If I were sitting in a court of law assessing, as sworn evidence, the information I have been presented with, I would not have too much difficulty in drawing the inference that the issue must have been present in the minds of at least some of the participants in the decision," he wrote.

That's judge-speak for "pull the other one, it's got bells on it."

Imagine what Green would have done if he'd put everyone he spoke to under oath.

Some politicians and their scripted supporters said the inquiry would take too long.

Like maybe a year?

Green took almost a year.

Pull the other one, indeed.

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SK court case to undermine NL and NS

Saskatchewan's court case over Equalization will tackle the issue of fundamental fairness in the system, according to Premier Lorne Calvert.

CBC News is reporting it this way:

Calvert said the legal action would not be over a broken campaign promise.

If a lawsuit was filed for every broken Conservative promise, there wouldn't be enough lawyers, he said.

Instead, he said, the suit would be based on the sections of the constitution that require the equalization program to be fair and equitable.

One possible route to that argument will undermine the offshore side deals from 2005 between the federal government and Nova Scotia and Newfoundland and Labrador.

Why?

Because those side deals are effectively a political work-around for the Equalization program. After all, if Saskatchewan's argument is based on fair and equitable treatment, the province that's been looking for an Accord-type exemption might just put that point on the table.

If Saskatchewan doesn't raise the issue directly, we might well see other provinces weigh in on the case. Bet your bottom dollar that those other provinces - already fried about the deals - will bring it up as an example of a fundamental inequity in the federal government's approach to Equalization.

Ask Ed Stelmach if his province might seek standing on this one. His province has had its non-renewable revenues clawed back, to use that idiotic phrase, for 45 years. Why would it be equitable, from Alberta's perspective to treat that province differently from the others?

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Offal News round up

Some choice posts from another local blog:

1. A post on the First Law of Petropolitics, a reprint of a column from the Globe on the implications in Canada.

2. "Jobs out east", a look at the local supply and service sector for the oil industry.

3. Energy transportation issues.

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Andrew Coyne on the Equalization racket

From the National Post:

It is not true, then, to say that the Accord has been violated. It is true that Mr. Harper played Atlantic Canadians for suckers. At least he is paying the price.

Well, suckers is a strong word. Appropriate but strong.

And it's not fair to lump all Atlantic Canadians into one lot.

Only some people were suckered, and the ones who are angriest now are the ones who were fooled.

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APEC assessment of Budget 2007 and Equalization

From the Atlantic Provinces Economic Council:

June 13, 2007

APEC releases study on the Equalization Options of Budget 2007 for the Atlantic Provinces

APEC is today releasing a new report on the implications of the proposed changes to the Equalization program for the four Atlantic provinces. The report entitled Assessing the Equalization Options of Budget 2007 for the Atlantic Provinces has been prepared by Professor Paul Hobson of Acadia University and Professor Wade Locke of Memorial University, both Senior Policy Advisors of APEC.

Following on the recommendations of the Expert Panel on Equalization, the new Equalization program includes the re-establishment of a ten province standard, simplified measures of fiscal capacity and a more predictable and stable payment system that is formula driven. The new program also reverses a pre-election commitment to exclude natural resource revenues, and includes 50% of these revenues.

The study provides estimates of the revenue flows to the four provinces under the current program (Fixed Framework) and the new Equalization program for each fiscal year from 2007-2008 to 2019-2020, the year in which the Nova Scotia and Newfoundland and Labrador Offshore Accords expire. These simulations utilize publicly available data projected forward, based on certain key assumptions. In particular, it is assumed that the aggregate of the fiscal equalization payments under the Fixed Framework will grow at an annual rate of 3.5% (as currently specified by legislation) and that non-oil and gas fiscal capacities for all provinces grow at an annual rate of 1.4% (the aggregate rate of growth of per-capita fiscal capacity in Canada over the last ten years). In addition, the simulations take into account changes to the Fiscal Arrangements Act, and to Offshore Accord legislation as detailed in the Budget Implementation Act (Bill C-52).

The Atlantic Accord, signed in 1985, and the Canada-Nova Scotia Offshore Petroleum Resources Accord, signed in 1986, gave Newfoundland and Labrador and Nova Scotia, respectively, the right to collect royalties and to levy taxes on offshore operations as if the resources were on provincial land. In addition, the Accords provide Equalization offset provisions to compensate for potential reductions in Equalization payments as these additional revenues come on stream. The 2005 Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act provided for additional Equalization offset payments to Nova Scotia and Newfoundland and Labrador to ensure that each province would receive 100 percent of the benefit of its offshore revenues. That is, offset payments would ensure no claw back of offshore revenues through Equalization.

The summary revenue implications for each of the four Atlantic provinces are provided in the table below. Nova Scotia, New Brunswick and Prince Edward Island are better off financially under the new Equalization program for two years and thereafter are disadvantaged by the revised Equalization program. Newfoundland and Labrador is immediately worse off under the new program.

Specifically, the impacts on the provincial treasuries are:

o Nova Scotia - $159 million increase in revenues for the first two years under the new Equalization program, and reduced revenues in each year thereafter compared with the Fixed Framework: in aggregate, the province receives $1.4 billion less under the new Equalization program than under the Fixed Framework;
o New Brunswick - $68 million increase in revenues for the first two years under the new Equalization program, and reduced revenues in each year thereafter compared with the Fixed Framework: in aggregate, the province receives $1.1 billion less under the new Equalization program than under the Fixed Framework;
o Prince Edward Island - $7 million increase in revenues for the first two years under the new Equalization program, and reduced revenues in each year thereafter compared with the Fixed Framework: in aggregate, the province receives $196 million less under the new Equalization program than under the Fixed Framework;
o Newfoundland and Labrador - $654 million reduction in revenues for the first two years under the new Equalization program, an increase of $22 million in the third year, and reduced revenues in each year thereafter compared with the Fixed Framework: in aggregate, the province receives $1.4 billion less under the new Equalization program than under the Fixed Framework. It should be noted that Newfoundland and Labrador will no longer be a recipient of Equalization after 2008-2009, under both the Fixed Framework and the new Equalization program. [Emphasis added]

Beyond 2007-2008, both Nova Scotia and Newfoundland and Labrador can choose to permanently opt into the new Equalization program or remain under the Fixed Framework. The results clearly indicate that both provinces should remain under the Fixed Framework. Since other provinces were not offered this choice, this would result in an unprecedented situation in which two distinct Equalization programs are operating simultaneously, a situation which is not likely to be sustainable.

Furthermore, Equalization payments under the new program are constrained by a fiscal capacity cap. For purposes of the cap, fiscal capacity is measured, on a per-capita basis, as the sum of non-resource fiscal capacity, one hundred percent resource fiscal capacity, (pre-cap) Equalization entitlements and payments under the Accord legislation (applicable only to Nova Scotia and Newfoundland and Labrador). Total fiscal capacity of a receiving province cannot rise above that of the lowest non-receiving province. Should it do so, Equalization payments are to be reduced accordingly.

The Budget Implementation Bill contains significant changes to the 1985 Atlantic Accord, and to the 2005 Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act, necessitated by the introduction of the new Equalization program. The protection provided by the Accords is undermined by any Equalization reductions caused by the fiscal capacity cap, since any reductions amount to claw backs of Accord payments. In the authors’ view, this violates both the letter and the spirit of the Accords. [Emphasis added]

****************************
The Atlantic Provinces Economic Council is an independent, non-profit research and public policy organization that seeks to advance the economic development of the Atlantic region.

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Williams big on Harper promise...in 2006

From the archives, a couple of stories containing Danny Williams' fulsome praise for the newly elected Harper administration.

Did the Premier actually claim he never trusted the guy?

Williams sees new allies in Ottawa
CBC News

Premier Danny Williams says a new Conservative government in Ottawa is nothing to fear – and could deliver on long-standing issues involving the federal government.

"I think Atlantic Canadians are going to be very pleasantly surprised and pleased with the performance of Mr. Harper," said Williams.

While Williams embraced Harper's response to a letter he sent to the major party leaders on issues pertinent to Newfoundland and Labrador, he refrained from actively campaigning for the Conservatives in the election.

Instead, Williams planted a sign supporting Conservative candidate Norm Doyle outside his residence, and used cautious language during the campaign.

During the campaign, Williams also applauded a response from NDP leader Jack Layton to the same list of questions, while being cool to the response from Liberal leader Paul Martin.

Williams also denied a rift between himself and the new MP for Avalon, Fabian Manning.

Manning was booted from the provincial Progressive Conservative caucus last May, after Manning spoke out against the provincial government's controversial raw materials sharing plan for the crab industry.

Williams said the dispute was "a caucus issue" and applauded Manning's victory.

"In all fairness to Fabian, I wouldn't take anything from Fabian's victory tonight. It was expected," said Williams, who noted a number of the members of the provincial Tory caucus campaigned for Manning.

In fact, Williams suggested that the Atlantic Accord dispute – in which he launched salvo after salvo against the Martin Liberals in a campaign to wrest more financial benefits from the offshore oil industry – helped Manning take the seat.

"That was John Efford's former district. The Atlantic Accord played a big role in that particular district, as it has played a role in the entire province," Williams said.

Efford, who won the Avalon race in 2004 with almost 60 per cent of the vote, became a lightning rod for anger when he rebuked Williams in the early days of the Atlantic Accord fuss.

"We basically had to drag Ottawa kicking and screaming to come with the Accord deal … I think it played a significant factor."

Efford announced his retirement in November, citing his lengthy battle with diabetes.

Williams, meanwhile, said he looks forward to a productive relationship with Harper.

"It's a delicate job [and] it's a difficult job to manage the relationship between the premiers and the prime minister of the country. However, I think it will be a refreshing change," Williams said.

He said he expects Harper to follow through on pledges involving the fishery, energy issues and the "fiscal imbalance" in Atlantic Canada.


Provincial Politicians Weigh In on Election - Jan 24, 2006
VOCM

Premier Danny Williams says he was a little surprised at last night federal election results. Williams says he thought Stephen Harper's Conservatives would get a larger minority than they did. He's also surprised that Atlantic Canada did not go a little stronger towards the Conservatives. Overall though he is generally pleased with the
result. He says the biggest issue facing the province is the fishery.

Williams says he did give some consideration to calling a by-election in Placentia-St. Mary's today, but he says this wouldn't be fair to party workers having just come off a federal election which saw Fabian Manning win John Efford's old seat. The by-election will be held soon.

Opposition Leader Gerry Reid says Paul Martin has made the right decision to step down as Liberal leader. Following his defeat last night, Martin announced he will leave the post after an orderly transition of power. Reid says Martin realizes that he can't lead the party to another victory. Reid says he believes Brian Tobin would be a good choice and Canadians would accept him.

Provincial NDP leader Jack Harris says given the calibre of local NDP candidates he's very disappointed the Province hasn't sent an NDP member to Ottawa. As for the Conservative minority victory, Harris told VOCM Open Line the federal NDP will have a strong voice in the House of Commons.

How times change.

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A spotter's guide to plants and other political flora

That would be labradore, which ha staken lately to tracking the appearances of the various planted and scripted supporters of the current provincial governing administration.

labradore's wjm has also been known to tackle the factually dubious comments of individuals, including reporters on subjects of interest to the province. Odds are he's right and the quibbles he raises are only sometimes trivial.

If David Cochrane actually claimed - as wjm says - that Danny Williams was neutral in the last federal election, then Cochrane would have to be officially classed as out-to-lunch. Progressive Conservative members of legislature would not have dared campaign openly for Connie candidates if Danny Williams himself disapproved.

Danny Williams himself would not have actually invented commitments from Stephen Harper if he was not actively involved in the federal election campaign.

If a claim is made, odds are that wjm will challenge it. Incidentally, CTV's Bob Fife is a fact checker's nightmare, but oddly wjm hasn't set his sites on that guy yet.

But to return to the main story, wjm is especially adept at spotting the numerous planted callers organized by the premier's office to spread the official partisan position of the moment on the issue of the moment. He's named most of them who call regularly. He's noted their odd habit lately of stating that "it's not like they get told what to say from the premier's office", or words to that effect.

Kinda like saying "It's not about Danny" two or three times on a subject that pretty much is all about Danny.

Roger Grime's is quoted in news media? A raft of callers will turn up saying "I don't know how he can gave the gall to stick him head up...".

Like dandelions after a good rain, they will pop up all saying exactly the same thing. People who don't normally call will suddenly be spouting obscure references to something that happened in the House of Assembly during a late-night sitting (not broadcast) in 1993.

Really odd stuff that even politcal junkies like your humble e-scribbler long ago forgot. But someone claiming to be a house-frau from Humber will be able to cite chapter and verse from a cabinet meeting minutes.

or they'll just repeat Standard Anti-Grimes Position Number 6. it's like they are little japanese soldiers deserted on some island, destined to carry out their last order unti, they pass out or are killed by a falling cocoanut.

And that's what some of it is like. A Marx Brothers movie.

Bizarre stuff, really, but it gets on the air. Most often at VOCM, but increasingly the planted callers - Progrsssive Conservative and Liberal - are turning up at CBC. Easy know there's an election coming up in October: the bulls**t is already so deep you need something by bodyglove to get through it without getting an infection

So if you want a convenient spotter's guide to the politcal flaura and fauna of Newfoundland and Labrador, check out WJM's labradore.

Here's a question to start your search through the local political jungle: what newspaper columnist, author and former Tory candidate actually claimed that in 1949 the Newfoundland government gave away all its resources and received a miserable allowance in return?

Hint: a collection of her greatest calls to Open Line will likely be titled: The other Gin and Tonic Gardener.

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Don't blame me!

I didn't vote for 'em.

In fact, Bond Papers raised some fairly consistent questions about the Harperites and some of the claims on their own political effectiveness made by one of the cabinet ministers soon to be efforded.

Now Dr. Bondolo may have been wrong about how short some people's memories were, but the Equalization forecast and how other provinces viewed the offshore deals? Bang on!

Oddly enough and despite all the public evidence that problems were looming on the federal political horizon, others did encourage Newfoundlanders and Labradorians to vote for Stephen Harper's merry band of reverse leprechauns.

Like this one, or for that matter the Big One.

Frankly, the people in Newfoundland and Labrador most-pissed by the Harper administration right now are those who voted for them, encouraged others to vote for them or invented bizarre political theories to promote the Harper cause only to find out that the theories were nonsense.

They should be ticked off.

They were caught flat by the Connie performance and these former Harper supporters ignored solid evidence in order to make their pitches.

For example, Premier Danny Williams says he is astonished at Norm Doyle's behaviour. Had he read Bond Papers, then he'd have seen an account of Doyle's voting history in the Commons. There's nothing in it that suggests he will buck the party line. Had the Premier read Bond, he would have seen all along the numerous questions with the Conservatives' positions.

Heck, he might not have claimed there was a loan guarantee on the Lower Churchill from Harper when there obviously wasn't one.

Wishful thinking. Maybe Derek Green will put it in a report and then it will be accepted.

Because, ya know, it's not like these Harper Connies haven't said one thing and then done another right in front of our eyes.

Like say on custodial management, something they abandoned during the campaign.

Or "federal presence" which Loyola Hearn abandoned a couple of days after polling day.

So while you are wondering what will happen next in the Equalization racket, just ask yourself a simple question:

For all the concern about public safety offshore and in the air raised by Connies and their provincial cousins in the last federal election, is there any marine or aviation forecasting being done at Gander?

Ya might just want to think about that next time someone suggests who you should vote for.

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Public policy on the fly

Does anyone else wonder if Kathy Dunderdale and her colleagues are making this stuff up as they go along?

One of things likely contained in the changes to the Electrical Power Control Act will be the correction to this problem, hopefully.

All of this just fixes the mess created last year with a hastily drafted piece of legislation setting up the the Hydra Corporation in the first place.

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A meaningless gesture

And an entirely pointless debate.

Under amendments to the FPI Act passed last year - in just a single day - the power to break up the once-proud Newfoundland based company and sell the assets to a grab bag of local and international companies was passed to the cabinet.

Cabinet has exercised its powers; that's why the deal has been announced already.

The old FPI legislation can be scrapped without any worries.

It's just too late to do anything about the sale of the company.

The Opposition gave up their right to deal with this issue last year. They can't moan about it now or accuse the cabinet of doing something improper.

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Where's John?

The Atlantic Accord negotiating team photo.

That's the real Atlantic Accord signed in 1985.

Where's John Crosbie?

Draw the obvious conclusion.

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Harper team fragmenting

Loyola Hearn is clearly out of touch.

Now on top of that ctv.ca is reporting that Jim Flaherty's infamous weekend letter was originally supposed to be signed by Peter MacKay, DDS.

MacKay refused.

Insiders say that Sandra Buckler, the prime minister's communications director, instructed MacKay to sign the letter, which rejected any side deals with Nova Scotia.

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Housing trends, St. John's 1992-2007

Courtesy of the Dominion statistician, a chart showing average house prices and new house starts in St. John's, from 1992 to 2007.

Housing starts began an upward climb in early 2001 and peaked in early to mid 2004.

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Take it to the bank!

Danny Williams, from 2003:

Our voice in Ottawa must be strong and passionate, however it must also be rational and levelheaded. Only then will we be effective in achieving for this Province the rights and benefits we have earned and deserve. My government will work cooperatively and collaboratively with our federal counterparts. In so doing, we will develop a mutual respect with the federal government, which in my experience is the key to successful and productive relationships.

Stephen Harper, from 2006:

It is my hope as Prime Minister to initiate a new style of open federalism which would involve working more closely and collaboratively with the provinces and the Council of the Federation to develop Canada’s economic and social union, to clarify appropriate federal and provincial responsibilities, and to resolve the fiscal imbalance between the federal and provincial-territorial governments...

We believe that a new equalization formula should exclude non-renewable resource revenues for all provinces, but also that no province should be adversely affected during the transition to any new equalization formula. We look forward to hearing the suggestions of the expert-panel review currently underway on the equalization formula, and to working collaboratively with the provinces and territories to develop a renewed equalization formula that is fair and acceptable to all provinces and territories.

Jim Flaherty, from March 2007:

"Now we can get over the bickering and now the federal government can concentrate on our constitutional responsibilities."

Stephen Harper, May 2007:

"If we cannot continue with this agreement ... we will have to address it ourselves in the courts."

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Pat Carney joins the fray

From the Chronicle Herald, a letter from Senator Pat Carney.

It seems that Bond Papers isn't the only one questioning John Crosbie's grip on the facts of the 1985 Atlantic Accord:

In Stephen Maher's June 6 story, "Crosbie pushed PM to honour offshore deals," it says John Crosbie was "instrumental in negotiating the l980s deals under which the Conservatives under Brian Mulroney ceded control of offshore petroleum to Nova Scotia and Newfoundland."

In fact, and despite claims to the contrary, John Crosbie was never involved in the offshore negotiations with either province in the l980s. That task was assigned by prime minister Brian Mulroney to me, on the grounds that a Western MP and minister with an energy background would bring more balance to an issue which involved intense regional as well as national implications.

Mr. Mulroney was still leader of the Opposition when he signed the original principles of the Atlantic accord with then premier Brian Peckford on June 14, 1984, three months before the Conservatives won the federal election. The completion of negotiations, led by me, was a priority of his government.

There would be no Atlantic accords without the Conservative government of Mr. Mulroney. The primary objective was to treat the provinces with offshore resources on the same basis as provinces like Alberta with land-based resources, in the interest of national unity. That object has been accomplished.

The actions of Mr. Crosbie in attacking the Atlantic accord provisions in the Harper budget show Mr. Mulroney's concerns were valid.

Pat Carney, PC,
Senator for British Columbia

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A dispute that divides familes

Gerald Keddy, Harper Conservative member of parliament, married to...

Judy Streatch, one of Rodney MacDonald's cabinet ministers.

Now that situation has to be uncomfortable, but word on Monday is that Keddy is wavering in his support for Harper over Equalization changes.

Makes sense.

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Harper to Rodney and Danny: Bite me!

Now this could get really interesting if the Stephen Harper administration actually refers the current Equalization spat to the courts for an opinion on whether or not his administration is violating the Atlantic offshore revenue deals.

Harper might have an argument on the 2005 deals.

On the 1985 one?

Pretty much black letter.

Under s. 60 of the 1985 memorandum of understanding neither party can change the enabling legislation without mutual consent.

The Harperites might try a legal argument based on some provisions of the constitution, but that's just a possibility.

The Prime Minister would have to send the thing to court first. Of course, there's nothing to stop the provincial government from sending the thing to the courts either.

Somewhere along the line someone must have surely uttered the words "constitutional crisis the likes of which we haven't seen in this country for decades".

That's basically what the Prime Minister is threatening, and all because he made a terribly poor political judgment.

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