Stephen Harper Breaks Contract with Atlantic Canada
Provinces Prepare to take it to Court.
June 12th 2007.
OTTAWA – Prime Minister Stephen Harper is threatening to take the Atlantic Provinces to court to rebut critics who say he is breaking his word and shortchanging Nova Scotia and Newfoundland.
"We don't break contracts; we respect contracts," Harper told the Commons yesterday in reply to sharp criticism from Conservative Nova Scotia Premier Rodney MacDonald on the heels of months of protest from Newfoundland's Danny Williams, and the ouster last week of Tory MP Bill Casey.
Another Nova Scotia Conservative MP, Gerald Keddy, planned to meet with the Prime Minister last night to discuss his concerns about the dispute.
"We're between a rock and a hard place," said Keddy, who hinted that his support for the government's March 19 budget was wavering.
"I'm not going to make any decisions until I get a chance to talk to the Prime Minister," he told The Canadian Press.
Harper disputes the charge that his government breached the Atlantic Accords, and broke an election promise to let those provinces keep 100 per cent of their offshore oil and gas revenues without suffering hits to their federal-provincial equalization payments.
Yesterday, a combative Harper first dared the provinces to take him to court if they are serious.
"That's a serious allegation: the federal government's breaking the law. We're not breaking the law. And if Nova Scotia believes that they would take the appropriate action."
Harper added he was still open to talks to resolve the dispute as voters expect leaders to do, "like adults." But Harper said there would be no more "side deals" with provinces.
Then, Harper – who has long held that courts should not intervene in political decisions – said if the provinces don't do so, he would put the whole question of whether a contract was broken to some kind of judicial review.
"I don't think we can let this stand. At some point, we'll consult the courts to see if we've respected the contract," said Harper.
It prompted his political opponents to denounce Harper's descent into a war of words with the provinces, less than three months after federal Finance Minister Jim Flaherty declared that "bickering between provincial and federal governments is over."
"When the finance minister announced the end of federal-provincial bickering, he did not say that meant `We will sue you if you disagree with us,'" Liberal Leader Stéphane Dion said in the Commons.
It also prompted a warning from MacDonald, Nova Scotia's Conservative premier, that Harper's threat of court action could backfire on the federal Conservatives because emotions are running high in his province.
"The most important court is the court of public opinion, and I can tell you that the court of public opinion in Nova Scotia is that the federal government has broken a deal," MacDonald said after a private luncheon speech to Bay St. executives.
"There will be a political price to pay in Nova Scotia unless they honour the agreement," he predicted yesterday.
"We may be a small province in Nova Scotia, but we will not be bullied by the federal government."
On Sunday, MacDonald called on Nova Scotia MPs and senators to follow the lead of MP Bill Casey – ousted from the Conservative caucus for voting against the budget over his belief it broke the party's promise on the Atlantic Accords.
Casey yesterday echoed MacDonald's warning about the party's Nova Scotia prospects, saying voters there have shut out political parties in past elections to show their displeasure.
Moreover, Casey disputed Harper's contention that there are no "side deals" to be discussed, saying he was involved in talks to achieve just that, up until last week's vote and his eviction from caucus.
MacDonald said his call on federal Conservatives to vote against the budget was not an easy one. "As a Conservative premier myself, this is a major stand."
It came after closed-door talks between federal and provincial officials collapsed last week, and following publication Saturday of a public letter by Flaherty in a Halifax newspaper declaring there would be no side deals, and that it was an "urban myth" that Ottawa was not respecting the Atlantic Accords.
That letter was the straw that "broke the camel's back," said MacDonald.
He said all Canadians have a stake in how this matter is handled because the federal government's reputation for keeping its word is at issue.
"It's in the best interest of the country because if any of my colleagues from any province or territory is going to be signing agreements we need to know they're going to be kept.
"This goes to the very principle of Confederation."
Nova Scotians are angry, and talking about it "on the streets, in the stores, in their workplaces and at the supper table," said MacDonald.
"The offshore agreement was an agreement which Nova Scotians saw as an opportunity to move forward, to be a `have' province, to contribute to our country.
"And now that is being taken away," the premier said.
MacDonald said he last spoke with Harper on Sunday night, but would not reveal details of their conversation.
Harper insists his 2007 budget gives the provinces a clear choice between keeping their non-renewable resource revenues under the 2005 accords and the old equalization formula, or choosing a new equalization formula, which he said gives Nova Scotia an extra $95 million this year alone.
But Dion said Harper is "trapped" because he made a promise he that could not keep – to not claw back the Atlantic provinces' offshore energy revenues when calculating their federal-provincial wealth-sharing transfer payment under a newly-revised equalization program.
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