SASKATCHEWAN GOVERNMENT RESPONDS TO FEDERAL PROMISE

Premier Lorne Calvert has written the leaders of all three major federal political parties today requesting clarification of their position on the inequities Saskatchewan experiences under the Equalization program. This follows Prime Minister Paul Martin's recent election promise to the Atlantic provinces that would allow them to keep an even greater share of their offshore oil royalties.

"We have been lobbying the federal government for an equitable solution that would see all jurisdictions treated fairly. We have been pushing for the same 70 per cent solution the Atlantic provinces receive," Calvert said. "Now the Prime Minister is offering an even more lucrative proposal to the Atlantic provinces on their oil and gas revenues, but has yet to extend the same offer to Saskatchewan. This is clearly unacceptable. The federal government must come forward with a similar proposal for Saskatchewan that will ensure our oil and gas revenues are also protected."

"The Prime Minister stated that Newfoundland and Labrador ought to be the primary beneficiary of the offshore resources," Calvert said. "This is what the Saskatchewan government has said all along about our natural resources. Saskatchewan and every jurisdiction, should benefit from its own natural resources. Instead, we are penalized at rates that have exceeded 100 per cent of our oil and gas revenues."

The Conservative Party has also entered into the Equalization debate. Prior to the Prime Minister's election promise in Newfoundland, Stephen Harper issued a statement promising his party would remove non-renewable resources from the Equalization funding formula and return to a ten-province standard.

Federal NDP Leader Jack Layton stated today in Saskatoon that the NDP supports an equalization formula based on a ten-province standard that doesn't unfairly punish provinces with oil, gas and mineral resources.

Saskatchewan is calling on the federal government to move quickly on changes to the Equalization program that will benefit all provinces. The solutions include:

- An immediate fix to the mining tax base;
- A further compensation payment of at least $180 million to cover the excessive clawbacks on oil and gas revenues encountered in the past;
- The same 70 per cent solution offered in the Atlantic accord for offshore oil and gas revenues applied to all jurisdictions; and
- In the long-term, the funding formula must return to the ten-province standard.

"I am encouraged by the Prime Minister's recent statement and his understanding that there are obvious problems with the Equalization program that need to be resolved," Calvert said. "I also support his conclusion that provinces must benefit from their natural resources. These are positive signs in our ongoing effort to bring about needed changes to Equalization. The federal government must come forward with a solution that treats all jurisdictions, including Saskatchewan, equitably and fairly."

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For More Information, Contact:

Rob Cunningham Executive Council Regina Phone: (306) 787-6349