Annual lists 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995

Ottawa, January 6, 2005
2005-003

Statement From the Honourable Ralph Goodale and the Honourable John Efford with Respect to the Atlantic Accord on Offshore Revenues in Newfoundland and Labrador

Ralph Goodale, Minister of Finance and John Efford, Minister of Natural Resources Canada today issued the following statement with respect to negotiations with the province of Newfoundland and Labrador concerning offshore revenues under the Atlantic Accord:

"The Government of Canada looks forward to further discussions on the offshore Accord with the province of Newfoundland and Labrador. It is helpful, in that context, to ensure maximum clarity on the fundamental issues.

First and foremost, the federal offer delivers exactly what the Prime Minister committed to in June during his discussions with the Premier:

• A guarantee that Newfoundland and Labrador will receive 100% of revenues from its offshore oil and gas production no matter what the price of oil.

• A guarantee that Newfoundland and Labrador will receive 100% protection from equalization 'clawbacks' on those same revenues.

• A guarantee that all existing offset transition benefits within the Accord - to be triggered should Newfoundland and Labrador become a 'have' province - will be respected.

This entirely honours the '100% commitment' given by the Prime Minister. Indeed, based on price and production forecasts provided by the province, this could represent an additional $2.6B in federal payments between today and 2012. This amount would be in addition to the benefits of the Accord as it stands today. Moreover, the federal government has indicated its willingness to consider a successor arrangement to the offset provisions in the Accord for the period 2012 to 2020.

While there may be a number of details that further discussion could help resolve, it is clear that one issue alone has emerged as the fundamental point of difference: the Premier's recent demand for a 'double-dip' payment.

To be clear, Premier Williams is now asking for special payments - payments that would be, in practice, indistinguishable from equalization payments - to continue indefinitely, even after Newfoundland and Labrador has become a 'have’ province.

This demand contradicts numerous public statements by the Premier that once out of equalization, he would seek treatment no different from that of other provinces such as Alberta or Saskatchewan. Clearly, an equalization offset payment that continues once the province no longer qualifies for equalization is not comparable to the treatment afforded others.

The Government of Canada recognizes that should the province emerge from 'have not' status, transitional benefits will be required to prevent a precipitous drop in its revenues. That is why we agreed to retain the existing benefits under the Accord which provide for substantial payments well after the province is no longer eligible for equalization.

In summary, the Government of Canada fully intends to honour the '100% commitment' made by the Prime Minister to the people of Newfoundland and Labrador. We look forward to continuing and concluding discussions as quickly as possible."

___________________
For further information:

If you would like to receive automatic e-mail notification of all news releases, please visit the Department of Finance Canada Web site at http://www.fin.gc.ca/scripts/register_e.asp