News Release Archive
PREMIER--BICKERING REAL THREAT TO FEDERALISM ----------------------------------------------------------------- Premiers bashing the federal government's billion dollar tax harmonization compensation package for the Atlantic Provinces are "not being helpful to the cause of federalism in Canada," Premier John Savage said today. Looking ahead to this week's First Ministers conference in Ottawa, Premier Savage said western premiers in particular are being selective in their comments. "Federalism recognizes that the different provinces and territories are different and have unique needs, though all form part of Canada. The Fathers of Confederation recognized this in the Canadian constitution. Since 1867 all provinces received special transition terms upon entering Confederation." Premier Savage said the harmonization funds are likewise intended to ease the transition, which is more difficult in Atlantic Canada than elsewhere in the country. "The Atlantic Provinces currently have the highest rate of sales tax in Canada ... all over 10 per cent. So taking their provincial sales taxes down to a harmonized rate of 15 per cent requires considerable adjustments." Adjustment payments have always been tailored to the needs of the different regions of the country, the premier said. For example, $1.9 billion in transition payments went to Prairie farmers when federal rail subsidies were eliminated in 1995. Premier Savage said he was "dismayed" by suggestions from western provinces that the tax harmonization subsidy paid to Atlantic Canada was discriminatory. "You didn't hear Atlantic Canada complain when the federal government recently put $5 billion into the Alberta tar sands project. "Atlantic Canada doesn't complain about money allocated under the Western Diversification Agreement, or the $445 million western farmers receive from the federal government on agricultural support programs." Premier Savage said it may surprise most Canadians to discover that Atlantic Canada's reliance on federal spending is declining significantly. "Through reductions in regional development subsidies, restrictions in the growth of transfers and massive cutbacks in expenditures, the federal government presence in the Atlantic provinces has decreased at a much faster pace than elsewhere in Canada." While dependence on federal government spending has declined, federal revenues collected in Atlantic Canada have increased significantly. The three Maritime Provinces, more than any other region of the country, pay the highest portion of gross domestic product (GDP) to the federal government. Looking at the overall agenda for this week's gathering of first ministers, Premier Savage said he is seeking a constructive meeting which enables the different needs of all the provinces addressed in the spirit of federalism. The premier said he is interested in discussing federal proposals for a new infrastructure agreement. In the area of job creation, the premier will focus on youth employment. Nova Scotia currently has a youth unemployment rate of about 25 per cent. Nova Scotia also endorses the report of the Ministerial Council on Social Policy Reform. Nova Scotia will focus on the welfare of the child and will support social and economic steps to better children's lives. -30- Contact: David Harrigan 902-424-6600 trp June 19, 1996 - 11:20 a.m.