Archive for June, 2007

Sometimes there is a bit of a disconnect between what I hear at my offices, and what dominates the political press. The debate on equalization is one example. While there is considerable attention paid to equalization by large media outlets; my office has received very few calls on the issue. Therefore I apologize if this is just a boring “Ottawa” story–but I thought I would review what the entire issue is.

Equalization is the transfer of money by the national government to poorer provincial governments to help them pay for roads, hospitals, schools etc. The idea is that all Canadians should have similar services across Canada, regardless of the province in which they live.

Conservatives of all stripes (PCs, Canadian Alliance, Reformers) hold that provinces should benefit from the wealth of their own natural resources (oil, gas, potash, etc.). This view is quite different from the Liberals policy. Under the Liberals’ equalization formula, the wealth of natural resources was counted twice. First, when the general income and sales taxes the natural resources’ generated were counted. Then they were counted again when the royalty payments were made to the province. Under the Liberals, this double counting cost Saskatchewan several billion dollars over the previous decade.

Now, in two election campaigns, many Conservatives, myself included, campaigned to stop this double counting which discriminated against Saskatchewan (the situation in Atlantic Canada is somewhat different). We promised to remove natural resource royalties from the formula, thereby ending the double count. By the way, we are the only party to explicitly state our policy on this issue.

After the Conservatives were elected, we implemented the changes we had promised. There was one little twist that was added to the changes that caused the controversy. A cap was put on the amount of payments that could go to a province. Saskatchewan could only receive an amount that would put its revenue powers at a level equal to Ontario. (The rational is that if you are poorer you shouldn’t support someone who is richer.)

It’s this cap that Premier Calvert is upset about, because it does cut back what Saskatchewan would receive in 2007 from the federal government. While Saskatchewan receives more money for roads and hospitals etc., (than it would have under any other formula supported by either the federal NDP or Liberals) it does not receive as much as it would have without the cap.

I am not sympathetic to the premier for the following reasons:

1. The cap only affects Saskatchewan in 2007, and NOT in 2008, 2009, or 2010. So this is not an ongoing problem. If it was an ongoing problem than I think his concerns would have more validity.

2. The fact that Saskatchewan was shortchanged by the Liberals federally for so many years, and the fact that the cap does hurt us for one year, makes it easier to advocate for Saskatchewan projects, for this year and future years. In fact, Saskatchewan received more federal funding per person in the federal budget than any other province. In addition, this amount was on top of a substantive increase in agriculture spending in the 2006 budget.

3. The premier and his government have a habit of displaying biases against rural Saskatchewan in general and certain regions in particular. Two examples that come to mind is their foot-dragging on fixing the road into St. Brieux (a town known to be strongly anti-NDP) and the delays in building the Humboldt Hospital.

I hope this brief summation of the debate over equalization helps answer any questions you may have had.

Brad Trost, MP Saskatoon Humboldt.

In my role as an MP, I get quite a bit of correspondence, sometimes on general themes and sometimes regarding specific questions. When I receive several letters on one particular issue, I know that it is being talked about in the community at large. Today, I am going to try to answer some of the questions which I have received in the mailbag.

1. Q: Is Canada negotiating away its bulk water to the USA?

No. This issue seems to come up periodically, and I’m not sure where the story comes from. Stories about water shortages, bottled water sales and the like certainly sell a lot of newspapers. But people do not have to worry about Canada’s lakes being drained or rivers diverted. Also, from a very practical perspective, it is way too expensive to ship the amounts of water necessary for irrigation and other large scale uses down to the desert areas of the southern U.S.

2. Q: Can the federal government pave the highway near my town?

No, not directly. The federal government does not provide direct payments for paving highways, except in very specific and unique situations. Ottawa does give money to the provinces and they pave the roads. But I cannot dictate that any specific road be paved. This year, the federal government gave record amounts of money to Saskatchewan for roads and infrastructure. So, there should be no excuse for roads to be in disrepair in areas like Bellvue, St. Brieux to Muenster, etc. The only excuse for these roads not to be in good condition is either waste by Premier Calvert or provincial riding favoritism by NDP cabinet ministers.

3. Q: I thought the new employment tax credit was $1,000/year. Why isn’t it that high? (see line 217 of your income tax return) The employment tax credit will be $1,000/year over a full year. On last year’s taxes, the amount was lower because the budget was introduced in March. Changes were phased in to reflect a July 1st start for the changes to the tax code.

I’m Brad Trost, your MP for Saskatoon-Humboldt. I welcome your feedback, contact my offices anytime. You can contact my office at (306) 975-6133.

Today I decided to write a series of updates on a variety of issues.

Passports: Even though there is a backlog, the Passport Office is now processing 20,000 passports per day. Considering that this is slightly more than the number of applications being received, the delays are slowly shrinking. The addition of 500 new employees at the Passport Office should improve service as we move into the summer.

The SJHL hockey bill (Bill C-294) is nearly through the Senate. This legislation will reverse a tax ruling from several years ago that ended up costing SJHL teams thousands of dollars. This bill has been worked on for three years: FINALLY, it will pass into law this summer. When passed into law, a $300 per month allowance for board and lodging provided to amateur junior hockey players by not-for-profit hockey teams will be tax exempt.

Help for railway shippers (farmers, potash companies, manufacturers, etc.) was introduced into the House of Commons on May 30th. Minister of Transport Lawrence Cannon tabled amendments to the rail freight provisions of the Canada Transportation Act. The aim of the amendments is to meet shippers concerns about rail service and rates while providing the railways with regulatory stability. Final offer arbitration (similar to what is offered in pro-sports salary disputes) is part of the legislation.

I hope these bits of news are useful. If you have any comments contact my office at (306) 975-6133

I’m Brad Trost, your Member of Parliament for Saskatoon-Humboldt