Why is the provincial government changing its mind about equalization?

Why is the provincial government now changing its tune on equalization? This is the Liberal government’s own words, when in opposition, regarding the under-funding of equalization to towns and municipalities.

If you read on, you will see where the Liberals state (when in opposition) the importance of an audit and separate accounting of the yearly federal equalization transfers for fairness to all towns and municipalities. There is no justification for the government to allow towns and municipalities to dissolve or struggle financially. What happened to that plan? Both levels of government are complicit in what is happening to rural Nova Scotia and the Cape Breton Regional Municipality (CBRM).

Liberal Party Resolutions from their 2011 and 2012 annual general meetings, when in opposition, recognized the unconditional practice involved in the distribution of the federal equalization payments in this province by passing the following Sydney Victoria resolution at it 2011 Annual General Meeting:

“Whereas taxpayers in the Cape Breton Regional Municipality, including the province-wide group Nova Scotians for Equalization Fairness, question the fairness of the distribution of federal equalization payments of all municipal units, and whereas the municipal government of the CBRM applied to the courts to challenge the fairness of the distribution of these equalization payments, and whereas the application was denied, and yet in the minds of many Nova Scotian residents and taxpayers the question remains valid, unresolved and worthy of exploration, and whereas there is a formula used by the federal and provincial governments for the distribution of these payments, over $1.5 billion dollars annually in Nova Scotia, and whereas it is a government’s responsibility to ensure that fairness is paramount in the distribution of funds collected from taxpayers, therefore be it resolved that the Nova Scotia Liberal Party with the values of fairness and transparency in mind, and the significant dollars at stake for municipalities, and given the credibility of the office of the Auditor General of Nova Scotia, advance the cause of referring the question of the distribution of equalization payments to Nova Scotia’s Auditor General for an investigation of its merits.”

The resolution at the Liberal Party’s 2012 Annual General Meeting passed a related resolution: “Therefore be it resolved that a Liberal government would strive to provide an equal level of services and infrastructure to all regions of our province.”

Nova Scotians for Equalization Fairness inquires of the McNeil Liberal government as to why these resolutions were simply ignored (both resolutions were forwarded to the McNeil government as a reminder).

The federal equalization payments are handed over to the provincial governments, without conditions, which creates a legal quagmire given the constitutional commitment of both the federal and provincial government that was enshrined in the Constitution Act, 1982.

When this issue was raised with former Nova Scotia NDP government finance minister Graham Steele, he responded that the funds are transferred unconditionally. Our committee replied that that is fine in so far as the unconditional transfer does not relieve the Nova Scotia government from still having to be in compliance with the Constitution Act, 1982. His terse reply merely stated that the government would take its guidance from the Nova Scotia Appeal Court’s decision that denied the CBRM standing before the court to present its case.

This legal incongruity was also sent to a number of MPs but no one has or perhaps can provide an explanation as to the constitutional authority to transfer these payments unconditionally. Nevertheless, this practice continues to this day with the silent complicity of all elected representatives at every level of government.

The only explanation received after a number of years was from the federal librarian who wrote that this legal concern was never the subject of a constitutional challenge. And, from the perspective of representative government, the disappointing thing is that all political parties over the years are guilty of this manipulation of federal equalization payments.

Thus, our committee recommends that the CBRM must question how this practice can comply with the stated commitments enshrined in the Constitution Act, 1982. The CBRM council must publicly expose the apparent illegality of such behaviour by both level of government as it solicits the support of the other affected municipalities.

The CBRM must get the answers to the following: after the entrenchment of section 36 in the Constitution Act, 1982, whereby the federal and provincial governments’ commitment regarding federal equalization payments is clearly expressed, what is the legal authority under the constitution for transferring these payments unconditionally and how can this transfer still simultaneously be in compliance with section 36?

Also demand from both the federal and provincial governments that a separate accounting by the provincial government has to be done for the federal equalization payments to Nova Scotia, which is one of the two levels of government Justice MacDonald of the Nova Scotia Appeal Court stated is responsible for the federal equalization payments.

And remember this, don’t expect our provincial and federal representatives to suddenly and voluntarily initiate this process unless politically challenged by you as the bottom rung most affected by policy.

Unless and until our elected municipal officials are forceful in drawing the public’s attention and awareness to the unfairness and likely illegality of how these large sums of federal equalization payments are distributed by our provincial government with the obvious complicity of our federal government, not all Nova Scotians, particularly in the CBRM, will or can be equal beneficiaries as Canadians to our constitutional entitlements in this Canadian Federation. And don’t expect our provincial and federal representatives to suddenly and voluntarily initiate this process unless challenged by you, the bottom rung most affected by policy induced from above.

Russell Green

Nova Scotians for

Equalization Fairness