FEDERAL GOVERNMENT RESPONDS TO PROVINCE'S EQUALIZATION CONCERNS

The Federal Government has responded to Saskatchewan's concerns over unfair treatment under the Equalization program. Ralph Goodale, Federal Minister of Finance, has agreed to a one-time payment of $120 million to help offset the clawbacks exceeding 100 per cent of Crown Lease revenues that the province experienced in recent years. Mr. Goodale also advised that should a clawback rate in excess of 100 per cent occur in the future, "prompt remedial action" will occur.

"I want to thank Mr. Goodale for making progress on the Equalization problem where limited progress has been made before," Finance Minister Harry Van Mulligen said. "This is a good sign and I appreciate his efforts to resolve this unjust situation. However, there is still much to be done to resolve this issue over the long term. We also continue to maintain that Saskatchewan is being incorrectly penalized $40 to $50 million each year under the current mining tax base."

"I also appreciate the timely nature of this response. We will be putting this money into the four year financial plan that the government will deliver on March 31st, 2004," Van Mulligen said.

Saskatchewan has consistently argued for improved treatment of resource revenues. The recently released report by Professor Thomas Coucherne on Equalization and resource revenues clearly demonstrated that Saskatchewan is penalized for its resource sector when compared to other jurisdictions.

This is a welcome response from Ottawa, but we still require a long-term solution to the inequities in the Equalization formula. Saskatchewan wants a fair and equitable solution for resource revenues that treats all jurisdictions equitably.

"We want the same deal as the maritime Provinces," Van Mulligen said. "Part of their oil revenues are sheltered from the funding formula. Only 70 per cent of their oil and gas revenues are included when determining entitlements. We simply want the same treatment under Equalization beginning with this renewal."

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For More Information, Contact:

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