NOTE TO OUR VISITORS -  The www.billcasey.ca "Atlantic Accords Page" will

be regularly updated with new information and links to various

(and critical) pieces of documentation so that

you will have a better understanding of the Accords and equalization issue.

 

What are the Atlantic Accords?

 

First, underground oil and gas resources found on land belong to the province where they are found. 

 

Prior to 1986, the ownership of offshore resources was disputed between the

Government of Canada and the Provinces of Nova Scotia and Newfoundland. 

 

In 1986, the first Atlantic Accord Agreement was signed where all

parties agreed that the ownership of the resource would remain with the

Government of Canada, but 100% of the benefits of royalties and revenues

would go to the province off whose shoreline the resource was found.

 

When gas and oil revenues started to come onshore to Nova Scotia and Newfoundland and Labrador,

it was realized that for every dollar that came in, the provincial equalization

payments were reduced dollar for dollar, meaning that the provinces received zero benefit from the resource. 

 

This lead to the second Atlantic Accord Agreement, actually named the Arrangement

Between the Government of Canada and the Government of Nova Scotia on Offshore Revenues. 

 

This second agreement, signed in 2005, was a fifteen year agreement under

which the Government of Canada agreed to pay to Nova Scotia and Newfoundland and Labrador

an amount equal to the reduction in equalization payments which

resulted from the revenue from offshore gas and oil resources.

 

As the website for the Department of Finance says, “Offset payments under both the 1986 Accord and the

2005 Arrangement are separate from the Equalization program”. 

 

The same website says “This is in recognition of the unique economic and

fiscal challenges facing the province(s).” 

 

A copy of the nine paragraph 2005 Agreement is below in the "Documents Section"

 

What is the Problem?

 

Although the 2005 Agreement is a fifteen year agreement, the Government of Canada

changed the terms and conditions of the agreement after only two years. 

 

In the original 2005 Agreement implementation legislation, the payment to the

province of Nova Scotia for any year was to be based on the “equalization formula in effect at that time.”

 

The 2007 Budget changed this calculation to be based on “the previous equalization formula”

thereby locking the future Accord calculations onto the “previous formula.”

 

The authors of the 2005 Agreement anticipated that the Equalization formula would change,

and therefore ensured that it was clear that this was a “rolling commitment “

and the payment would be based on whichever formula existed at the time the calculation was made. 

The 2007 Budget changed that.

 

What does this mean?

 

The 2007 Budget introduced a new national Equalization formula. 

 

Under the original signed agreement, the Accord calculation would have been based on this new formula. 

Because of the changes in the 2007 Budget, the calculation will now be based on the “previous” formula. 

 

Respected economists have predicted that this change will cost Nova Scotia approximately

1.3 Billion dollars. Please see the "Documents Section" below for more information.

 

Why did you vote against the Government’s Budget?

 

The Government of Canada signed an agreement with Nova Scotia that was to be in force until 2020. 

 

The 2007 Budget changed the agreement, and has now demanded that the Government of Nova Scotia

accept other options, even though there are still thirteen years to go in the contract. 

 

I could not vote to endorse the 2007 Budget which broke the contract with my province.

 

What is the new deal recently announced by Prime Minister Harper and Premier MacDonald?

 

In order to make up for the fact that the Government of Canada

broke the 2005 Agreement, the Government of Canada and the Government of Nova Scotia

have agreed on a combination of changes that are supposed to give Nova Scotia revenues equal

to what the original Accords would have provided. 

 

There has been an exchange of letters between the

Minister of Finance for Nova Scotia and the Minister of Finance for Canada. 

 

These letters outline changes to be made but the changes re not clear. 

 

There is no “agreement" signed by both parties as was the case in previous offshore agreements. 

In the Hon. Michael Baker’s letter, he says that “technical amendments “ will be made but there is no

hint of what the amendments will be, or even what legislation they will apply to.  

Only when we see the exact legislation will we know what the “new deal” means.

 

Everyone is trying to interpret the letters but there are many contradictions. 

The Hon. Peter MacKay said that there is a new agreement and new legislation will be tabled this fall,

but his Cabinet Colleague Hon Marjorie LeBreton said that there is no new

agreement and there will be no new legislation tabled.

 

The letters exchanged can be seen in the Documents Section.

 

Cancelled briefings by the Government of Canada

 

The morning of November 20, 2007 marked the fourth time the Government of Canada

postponed/cancelled a technical briefing for Members of Parliament

and Senators on the budget implementation act, portions of which deal with

the new agreement on the Atlantic Accord.

 

Other briefings requested or scheduled for October 24, November 5,

and November 13, 2007, were also postponed/cancelled by the Government of Canada.