FINANCE MINISTER TO APPEAR BEFORE SENATE COMMITTEE

Finance Minister Harry Van Mulligen will be taking Saskatchewan's concerns over the federal government's equalization program to the Senate. He will appear before the Senate Standing Committee on National Finance on Wednesday, April 28th, 2004.

In a recent study, Queen's University Professor and noted economist Thomas Courchene pointed out that at times Saskatchewan is being penalized unfairly for its resource revenues with clawbacks that have exceeded 100 per cent of energy royalties. His report estimates that if Saskatchewan's resource revenues were treated the same as off-shore resources, the Province would have kept over $300 million of its revenues in 2000-01, instead of having it clawed back through this flawed calculation.

Saskatchewan received $120 million from the federal government in March 2004 that partly reflected these clawback amounts owed to the province. It was an important step. However, the Saskatchewan Government is still pressing Ottawa to resolve the outstanding issues including full historical compensation for clawback rates in excess of 100 per cent.

"This is another opportunity for Saskatchewan to continue discussions over equalization with the Federal Government," Finance Minister Harry Van Mulligen said. "We are joining other provinces, and experts in the field, to push for changes to equalization. This is part of an ongoing effort by the Saskatchewan Government to change the equalization program. All we are asking for is fair treatment."

The Senate Committee is hearing presentations on equalization. Saskatchewan is presenting a brief to the Senate Committee that outlines the changes required to ensure the program continues to meet its mandate. These changes include:

· An equitable solution to the consideration of energy revenues. Specifically, that the same 70 per cent solution offered in the Atlantic accord be implemented for all jurisdictions;

· Full compensation with respect to any of the oil and gas bases where tax back rates in excess of 100 per cent were applied historically;

· The mining tax base calculation be fixed immediately to accurately reflect each province's true revenue raising capacity; and

· As a long-term solution to the inequities in the funding formula – a return to the ten province standard.

"We have talked about equalization through the Council of the Federation, we have worked with the federal Finance Minister to address the issues, and Premier Lorne Calvert met with the Prime Minister. Now we will talk directly with the Senate while they consider the National Estimates. We will continue to push for fair treatment under equalization," Van Mulligen said.

Van Mulligen's presentation to the Senate Committee can be seen via live webcast at 4:15 pm Saskatchewan time at www.senate-senat.ca/FINA.asp

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For More Information, Contact:

Mike Woods Finance Regina Phone: (306) 787-6578