William D. Casey, M.P.

Cumberland Colchester Musquodoboit Valley
646S Centre Block

House of Commons

Ottawa, ON  K1A 0A6

House of Commons

Chambre des communes

Canada

 Press Release

Ottawa Tel: (613) 992-3366

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    Casey questions need for three equalization programs

June 17, 2008

Ottawa –  After repeatedly being told the new O’Brien equalization formula would return Canada to ‘one principle based equalization formula,’ Bill Casey, MP, pointed out the reality in the House of Commons on Tuesday.

            “Prior to the March 2007 budget Canada had only one equalization formula for all provinces, now we have three unequal equalization formulas,” Casey said.

            Pointing out that Nova Scotia has the choice of the O’Brien Formula or the new amended 2005 equalization formula which has access to a fund that has a 3.5% escalator clause, which expires in 2020, eight other provinces have the O’Brien Formula with no escalator clause that ends six years earlier. Newfoundland has an amended 2005 equalization formula with access to funds that have an escalator clause, but does not have the option of the O’Brien Formula.

            “Why did the minister advocate for one principle-based equalization formula but end up with three formulas,” questioned Casey, who asked the Minister of Finance about his intentions to revert back to one equalization formula for all provinces.

            Although he didn’t answer Casey’s question, the Minister of Finance, the Honourable Jim Flaherty advised him that fiscal balance in the country is based on certain principals which were agreeable to most jurisdictions in Canada. He pointed out that the Government of Canada had reached an agreement with Premier MacDonald and Nova Scotia is  getting the full benefit of the off-shore accord.

            Mr. Casey will continue to press the government for straight-forward answers on the equalization system in Canada for the benefit of all Nova Scotians.

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