The Back Page

THE DANNY MILLIONS DEAL

He could have had this agreement before. Instead, he opted for stunts.

PAUL WELLS February 14 2005
The Back Page

THE DANNY MILLIONS DEAL

He could have had this agreement before. Instead, he opted for stunts.

PAUL WELLS February 14 2005

THE DANNY MILLIONS DEAL

He could have had this agreement before. Instead, he opted for stunts.

The Back Page

PAUL WELLS

THE PROBLEM with asymmetrical federalism is that provincial greed is perfectly symmetrical. It is, always and everywhere, bottomless.

Say hello to Danny Williams. Now that he’s flying the Canadian flag again in Newfoundland and Labrador, it’s okay to wave at him. That little tantrum had to do with a federal offer to compensate him for losses in equalization as his province earned more revenue from offshore oil.

The federal offer—extracted, as I wrote inside this magazine a couple of weeks ago, from

a very scared Paul Martin during the worst days of last year’s election campaign—was a distortion of the already distorted logic of equalization. Theoretically, as a province’s revenues rise and it needs less help, it gets less from Ottawa. But Newfoundland and Labrador are in dire straits, so the feds decided to come up with extra cash.

Williams said Martin hadn’t offered enough. He stormed home in a huff. He hauled down Canada’s flag from provincial government buildings. He got Newfoundlanders and other Canadians calling one another

all kinds of names. And then, on the evening of Friday, Jan. 28, he reached a new deal with the feds and walked home with a $ 2-billion cheque in his metaphorical pocket. (Nova Scotia got its own similar deal, worth not quite half of Williams’s.)

So it’s a happy country, no?

No. Joe Handley, premier of the Northwest Territories, promptly told the CBC that whatever Williams had ordered, he would have some too. Newfoundland’s in a bad way? Tough. “Ours is even a little bit tougher than even in Newfoundland,” Handley said, referring to his territory’s economy.

Onward. “We don’t believe at this point now that we should be treated differently than other provinces,” Harry Van Mulligen, Saskatchewan’s finance minister, said before the engines in Danny’s jet had barely had time to cool. Van Mulligen’s department figured a decade of Danny’s deal would have netted Saskatchewan about $4 billion.

Anyone else? Quebec. You guessed it. The Bloc Québécois finance critic Yvan Loubier, his voice hoarse from years of asking for whatever the next guy got, was on his feet in the Commons on Thursday demanding some of Newfoundland’s fairness. Never mind that Newfoundlanders see their own sweetheart resource deal as compensation for a 1969 hydro agreement with Quebec that shafts the Rock to the tune of perhaps $1 billion a year. No, never mind: that’s yesterday’s problem. One article I read puts Quebec’s demands at $3 billion.

Anyone else? Ontario. Ontario?! As I said, every one of Confederation’s children is another hungry mouth to feed. Ontario is the engine of Canada’s economy, Finance Minister Greg Sorbara said. So it should get $4.8 billion of this year’s surplus.

But you know, it’s a funny thing. I attend a lot of federal-provincial meetings. And I never heard any of these guys say they found

Danny Williams’s demands to be unfair before he walked home with a $2-billion cash advance. They were rigorous in their discipline until they smelled cash. Then it was like sharks in a pool of chum. They’re practically biting their own tails off.

So that’s the other provinces. But we’re not done with Danny Williams yet. Why did he boycott last October’s meeting on equalization and banish this country’s flag from his sight in December? Because he wanted a dollar in compensation for every new dollar in revenue. “Our pride can’t be bought,” he said in October. “We won’t say yes to less.”

Won’t say yes to less. At that time Williams handed out a chart showing that Ottawa was offering a paltry $250 million a year for the deal’s first eight years. Vaulting above that miserly green line, a red line showed the commanding heights of Newfoundland’s projected oil revenues—perhaps $4.9 billion over the same period. Well, you can see why Newfoundlanders and Labradorians were steamed.

But you know, it’s a funny thing. Although his deal may eventually total $2.6 billion, for now Williams goes home with a $2-billion cheque—which looks a lot like the $250 million a year he found wanting, back in October.

In December, he was furious because the deal would collapse as soon as Newfoundland’s revenues took it out of equalization. “Why should we get less than 100 per cent of our revenues after we’re equalized?” he asked the CBC. And the magic January deal that has everyone else jealous? Payments under the deal collapse soon after Newfoundland leaves equalization.

Danny Williams could have had this deal in October or December. He preferred to pull cheap stunts in return for cheap votes. This is the man in whom Newfoundlanders and Labradorians have put their tmst. One wonders why they are celebrating.

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