Mar 22, 2007 04:30 AM
OTTAWA–Prime Minister Stephen Harper's plan to mend strains in the federation appeared on the verge of backfiring after the Quebec government earmarked $700 million in new "equalization" money from Ottawa to cut Quebecers' income taxes.
The promise by Premier Jean Charest is stirring an angry reaction and more criticism of Monday's Conservative budget, which is pouring an extra $2.3 billion of federal cash into Quebec annually.
About $700 million of this federal money, intended under the "equalization" program to allow Quebecers to enjoy social programs equivalent to that of richer provinces, is being channelled into income tax cuts by Charest, who is in the final days of a hard-fought election campaign. Coupled with Charest's earlier promised tax reductions, it would allow a couple in Quebec to save about $750 a year.
Saskatchewan Finance Minister Andrew Thomson said this development has Westerners fighting mad.
"We had feared all along that that was exactly what the Prime Minister was going to do – use western oil money to buy votes in Quebec," he told the Toronto Star. "But none of us expected it to be so blatant."
Many provinces are complaining about being shortchanged in the budget. But Saskatchewan, along with Newfoundland, is accusing Harper of betraying a promise not to include non-renewable resources in the Tory-created formula for determining how much provinces receive under the federal-provincial wealth-sharing program.
The provinces say that Harper's equalization plan is a "sleight-of-hand" scheme that has cost them hundreds of millions of dollars in lost revenues.
Thomson said people in Saskatchewan are even more upset "to see that in the budget this week, that there were no tax cuts for Western Canadians but tax cuts for Quebecers delivered through the equalization program."
Federal Liberals, though rooting for their provincial cousins in the March 26 Quebec election, nonetheless expressed outrage over Charest's decision to use federal money meant to equalize social services in Quebec to finance tax cuts.
"We want Charest to win but we didn't think we would have to pay for it like this," snapped Liberal MP Roy Cullen (Etobicoke North), who said he was appalled by the Quebec premier's decision.
In the Commons, the Liberals charged that Harper's approach to federal-provincial relations, far from winding down long-standing tensions between Ottawa and the premiers, is threatening national unity.
"A prime minister is supposed to unite and not divide, and a federal government is supposed to act on behalf of all Canadians," deputy Liberal leader Michael Ignatieff said in the daily question period.
"The people of Saskatchewan, B.C., New Brunswick, Nova Scotia, Newfoundland and Labrador are wondering today, `Why don't we count?'
"Why did the government introduce a budget that so obviously divides the country?"
Harper countered that his government's overhaul of federal-provincial wealth-sharing arrangements was based on the recommendations of a blue-ribbon panel appointed by the previous Liberal government.
"Every single province gets more money under this budget and a lot more money as the years go by, $39 billion more," the Prime Minister said.
"This budget rewards families, it rewards seniors, it rewards truckers, it rewards farmers, it rewards soldiers. I could go on and on. The one thing that unites members of the Liberal Party is they are voting against all of them."
The blow-up over how various provinces were treated in Finance Minister Jim Flaherty's budget appeared increasingly divisive.
In Newfoundland, radio station VOCM reported that, in an interview, Conservative MP Fabian Manning (Avalon) said he had lobbied to have non-renewable resources taken out of the equalization formula, but if he votes against the federal budget, he's as good as out of the party.
And another Conservative MP joined in the verbal jousting between the Harper government and Saskatchewan Premier Lorne Calvert over the equalization issue.
"The premier's lying through his teeth," outspoken Saskatoon MP Maurice Vellacott told Canadian Press.
He added that Calvert, an NDP premier, is a socialist who would rather keep his province "on the federal dole" than achieve prosperity.
Calvert responded by saying that the federal Conservatives, having betrayed the provinces, can only resort to name-calling.
On the election campaign trail, Charest was unapologetic about his decision to apply his $700 million federal equalization windfall toward tax relief.
"We are making decisions in our areas of jurisdiction, and we have the full power to make decisions according to our priorities."