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Campaign for Fairness
Ten weeks ago I delivered my Annual State of the Province report, and today I am back to ask you to join me in leading the charge for Nova Scotia's future. I seek your support and that of every Nova Scotian as I begin what I believe is the most important task I have undertaken as Premier.
This "Campaign for Fairness" has several elements. The one I will focus on today is the legal and business case for why Nova Scotia should, and must, receive the full financial benefits from our offshore natural gas and oil resources. I want Canadians to know that Nova Scotia wants to earn economic independence by our own means — and once again --- be social and economic equals within this great country. This campaign is not meant to divide Canada into winners and losers. It is meant to strengthen our nation. I want to be crystal-clear about the Offshore part of the Campaign for Fairness --- we are not asking Ottawa for one dime more. Not one. All we are asking for is to be treated as others were before us. We are asking only for what Nova Scotians were promised. And that is --- as the revenues from our offshore oil and gas grow, the additional financial benefits should flow to Nova Scotians.
Over the past 18 months that vision has continued to evolve and become more concrete. I can now foresee that a day will arrive when our economy has been transformed, our educational system reinvigorated, and our province positioned for a future of financial independence. I foresee a day when another Premier will speak to our grandchildren about how Nova Scotia is contributing to rather than drawing from the equalization fund. I believe you all share that vision. If we work together, we can achieve it. But it will take patience and dedication.
We have a growing number of opportunities in the energy field, in knowledge based industries and in many of our traditional sectors. That opportunity will be squandered unless we find ways to cut our personal and corporate taxes, so that our economic growth is accelerated. That will allow us to improve our education, health and essential public infrastructure and start the growth cycle. But, if we don't make the most of our offshore resources, then Nova Scotia's crushing debt will force government's hand for decades to come.
I don't know about you, but that's hard on my digestion. More importantly, our debt hurts Nova Scotia - and it weakens Canada. Changing that fact will strengthen our province and our country. Our opportunity to change that fact is at hand. Now is the time for us to establish the winning conditions so that our non-renewable offshore resources --- our natural gas and oil lead to economic independence. This is Nova Scotia's best opportunity since Confederation. We've looked ahead into the middle of the next decade and projected the results. The results if we are able to use the full financial benefits of the offshore. Under the right conditions - economic independence is on the horizon.
This year we are forecasting the strongest exploration in over a decade. In 1999 one pure exploration well was drilled; in 2000 that tripled to three; and in 2001 is expected to nearly triple again. A few examples of what's being planned: PanCanadian - four new exploration wells in 2001 at an investment of $105 million dollars. Mobil - one exploration well under way, more are expected. Shell - planning one shallow well. Marathon Oil - has called tenders and is staffing up for one of the deepest exploration programs ever undertaken in the World. BPAmoco and Anadarko - have committed a record $97 million dollars in exploration work on one licence block. Potential is turning into reality.
This area represents the potential of three SOEP projects --- plus one Hibernia. Resolving the dispute has been a priority for me, and we have a solid legal case --- I don't want to bore you with legalese but here is our position — the line is the line. Our brief to the Arbitration Tribunal argues that the boundary line was settled with Newfoundland and the other provinces in 1964 and was accepted for more than 30 years after that. In less than two months from now the tribunal will hear final oral arguments, and we anticipate a decision later this spring. We look forward to the reactivation of old exploration licenses in the Laurentian Subbasin and an increase in activity in the surrounding areas.
Rising energy prices, especially natural gas prices, only improve the outlook for our offshore resources. We have the resources to heat and light The Big Apple. That's right, in future Nova Scotia offshore oil and gas will power New York City. The benefits of exploration and development spending, the growth in supporting industries, should power our economy as well as power our future. Nova Scotia's economic future should be assured. But, it is not. Economic independence can only be achieved if we ensure the federal-provincial financial agreements lets the benefits from the offshore flow to Nova Scotians.
Sub soil wealth owned by Canadians given to provinces. Quebec gained the riches of James Bay, Ontario the resources of northern territories, as did Manitoba --- after they joined Confederation. The offshore area was to be Atlantic Canada's new resource opportunity, and debate of the 70's and 80's was about how to use our offshore wealth to transform our economies. There was agreement by all that revenues from such non-renewable resources should be used to make permanent economic changes. And Nova Scotia should be the primary beneficiary - - - and rightly so. These offshore resources are part of Canada because Nova Scotians took these along when they joined Canada in 1867. They were ours then. I believe they are ours now.
The objective was clear and I quote: " to recognize the right of Nova Scotia to be the principal beneficiary of the Petroleum Resources in the Offshore area, consistent with the requirement for a strong and united Canada." But, fifteen years later that promise is nowhere close to becoming a reality. That's because as each new offshore dollar flows in, Ottawa claws most of it back. The bulk of financial benefits from the offshore go to Ottawa - not Nova Scotia.
The other 81 cents goes to Ottawa through direct taxation and by clawing back Nova Scotia revenues through the equalization formula. That's 19 cents for Nova Scotians, and 81 cents for Ottawa. These are our resources, and I believe that Nova Scotia deserves more than 19 cents on the dollar. Right now, Nova Scotia stands to lose tens of billions of dollars over the next 30 years. That money should go to starting the cycle of prosperity — reducing personal and corporate taxes — which promotes broad-based economic growth — which leads to better educational and training systems and public services — and debt reduction. Without fiscal fairness, Nova Scotia will make only modest gains --- rather than economic independence. Without the full benefit of the new financial gains, Nova Scotia's prosperity will be delayed. Instead we will struggle on as a recipient of equalization transfers for years to come.
From 1957 to 1965 Alberta was a recipient of equalization. The energy industry was in its early years. But, with the right fiscal regime, grounded in its ability to use the benefits from its natural resources, Alberta has been enormously successful. It diversified its economy; provided high standards of public service, and achieved a financial position that is consistently rated as one of the best in the western world. Nova Scotians deserve the same chance to build their own future. That's only fair, and that's the goal of my campaign - which could just as easily be called the Campaign for Economic Independence.
Our province has begun to get its house in order by making many difficult decisions that had been avoided for decades. But that alone is not enough to stop the widening gap between Nova Scotia and other provinces. We must act now so the opportunity to make long-lasting change is not lost.
I will ask the Prime Minister, Jean ChrÈtien to use this opportunity to deliver on the promise that Nova Scotia should be the primary beneficiary from the offshore. The Minister of Industry, Brian Tobin, made it clear last week that he supports our goals and vision, and I know we can also count on the support of Nova Scotia's new federal cabinet Minister Robert Thibault. I want a solution that gives Nova Scotians what is rightfully theirs ... what they were promised ... the lion's share of the financial benefits from our offshore. We have specific suggestions for fairness to discuss with the Government of Canada and the other provinces. In the months ahead I will outline them in more detail. On issues such as offshore resources, equalization, transportation infrastructure — when Nova Scotia wins, other provinces win as well. Nova Scotia needs the support of other provinces for fair treatment, not special treatment. We just want the tools that others provinces used to gain economic independence. As a column in the National Post noted last week, Nova Scotia is pushing Ottawa to gain the tools to be competitive and independent — so we can stand on our own two feet. We need the tools; Thank you. |
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This page and all contents Crown copyright © 2001, Province of Nova Scotia, all rights reserved. Comments to: gannondj@gov.ns.ca /2001-Jan-17. |
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