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.