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The Atlantic Accord and the 3rd time I voted against my party
Bruce McKinnon cartoon, which Bruce has annotated:
In February 1985, the Mulroney Progressive Conservative government signed an agreement with the Province of Nova Scotia guaranteeing that Nova Scotia would get 100% of the financial benefit from its offshore resources. This agreement is known as the Atlantic Accord. Unfortunately, it was not anticipated that for every one dollar of offshore resources Nova Scotia took in, one dollar would be removed from Nova Scotia equalization payments. In effect, Nova Scotia would not get a cent from its offshore resources.
For several years, Premier John Hamm from Nova Scotia and Premier Danny Williams from Newfoundland and Labrador badgered the federal government for a new deal that would guarantee that the provinces would actually get 100 percent of the benefit of the resources in the same way as other provinces get 100 percent of their resources.
Finally, on February the 14th, 2005, the two provinces signed an agreement with the Paul Martin Federal Government called the “Arrangement Between the Government of Canada and the Government of Nova Scotia on Offshore Revenues.” A similar agreement was signed with Newfoundland. The short name is “The Offset Agreement.”
This agreement guaranteed that Nova Scotia would get an “offset payment” equal to the funds lost from the equalization deduction, thereby giving Nova Scotia back 100% of the offshore resource revenues. The Offset Agreement also guaranteed that Nova Scotia would get the benefit of the “equalization formula that exists at the time.”
Enter Prime Minister Stephen Harper.
In the 2007 budget, Prime Minister Stephen Harper/Finance Minister Jim Flaherty redefined the meaning of the words “exists at the time.” The federal and provincial authors of the agreement will confirm that the words “exists at the time” meant “exists at the time the calculation is made,” therefore ensuring that Nova Scotia benefitted from the latest equalization formula.
Prime Minister Harper and Finance Minister Jim Flaherty “re-interpreted” the meaning of “exists at the time” to mean “exists at the time the original contract was signed.” By redefining the meaning of these words, Nova Scotia would be saddled with the previous, less generous equalization formula, while all of the other provinces received the benefit of a more generous 2007 equalization formula.
Prime Minister Harper held out an option, but as Nova Scotia Premier Rodney MacDonald said in the mailout sent to every Nova Scotian, “Regardless of the choice, our province stands to lose hundreds of millions of dollars.”Premier MacDonald also said in the mailout, “That budget effectively ripped up our Offshore Accord.”
When questions started to be raised about the 2007 Budget and changes to the Atlantic Accord, I asked the finance minister to explain the changes. Minister Flaherty assured me “there’s not a comma changed” and then he repeated “there’s not a comma changed” over and over. At first, I was relieved that the concerns about the Atlantic Accord were unfounded.
That was until I realized that they had “reinterpreted” the expression “exists at the time” to mean something it was never intended to mean. Mr. Flaherty was technically correct when he said that “there was not a comma changed.” However, he didn’t mention that they had “reinterpreted” the words that completely changed the substance of the deal. Amazing.
Seeking clarification, I approached the Chief Law Clerk of the House of Commons, Mr. Rob Walsh, and asked if he could help figure out what was going on. He said that the only words that really mean anything are the words in the actual legislationthat implements the “Offset Agreement.” He turned to a huge wall of legislative documents behind his desk and found the records that implemented the Atlantic Accord and the Offset Agreement.
The language in the 2005 legislation says, “The physical equalization payment that may be made to the Province for that fiscal year under the equalization formula in effect at that time.” Very Clear. The equalization payment for any year will be based on the formula in effect at that time.
Although the words in the “agreement” could be “re-interpreted,” the actual legislation words cannot. The actual legislation says that Nova Scotia is entitled to the latest equalization formula in effect at the time the calculation is made.
Are you confused yet?
I then met with Prime Minister Harper. I provided him with a note written by the Chief Law Clerk, Rob Walsh, which said the budget is in contravention of the Offset Agreement legislation. Mr. Harper took a quick look at the letter and sent it flying down the table. Then he said, “It doesn’t matter what Rob Walsh says… I decide what equalization formula exists.”Then he added some special comments to me which I will not repeat in mixed company.
To Bill: I’d forgotten how many of these I did… —Bruce
In February 1985, the Mulroney Progressive Conservative government signed an agreement with the Province of Nova Scotia guaranteeing that Nova Scotia would get 100% of the financial benefit from its offshore resources. This agreement is known as the Atlantic Accord. Unfortunately, it was not anticipated that for every one dollar of offshore resources Nova Scotia took in, one dollar would be removed from Nova Scotia equalization payments. In effect, Nova Scotia would not get a cent from its offshore resources.
For several years, Premier John Hamm from Nova Scotia and Premier Danny Williams from Newfoundland and Labrador badgered the federal government for a new deal that would guarantee that the provinces would actually get 100 percent of the benefit of the resources in the same way as other provinces get 100 percent of their resources.
Finally, on February the 14th, 2005, the two provinces signed an agreement with the Paul Martin Federal Government called the “Arrangement Between the Government of Canada and the Government of Nova Scotia on Offshore Revenues.” A similar agreement was signed with Newfoundland. The short name is “The Offset Agreement.”
This agreement guaranteed that Nova Scotia would get an “offset payment” equal to the funds lost from the equalization deduction, thereby giving Nova Scotia back 100% of the offshore resource revenues. The Offset Agreement also guaranteed that Nova Scotia would get the benefit of the “equalization formula that exists at the time.”
Enter Prime Minister Stephen Harper.
In the 2007 budget, Prime Minister Stephen Harper/Finance Minister Jim Flaherty redefined the meaning of the words “exists at the time.” The federal and provincial authors of the agreement will confirm that the words “exists at the time” meant “exists at the time the calculation is made,” therefore ensuring that Nova Scotia benefitted from the latest equalization formula.
Prime Minister Harper and Finance Minister Jim Flaherty “re-interpreted” the meaning of “exists at the time” to mean “exists at the time the original contract was signed.” By redefining the meaning of these words, Nova Scotia would be saddled with the previous, less generous equalization formula, while all of the other provinces received the benefit of a more generous 2007 equalization formula.
Prime Minister Harper held out an option, but as Nova Scotia Premier Rodney MacDonald said in the mailout sent to every Nova Scotian, “Regardless of the choice, our province stands to lose hundreds of millions of dollars.”Premier MacDonald also said in the mailout, “That budget effectively ripped up our Offshore Accord.”
When questions started to be raised about the 2007 Budget and changes to the Atlantic Accord, I asked the finance minister to explain the changes. Minister Flaherty assured me “there’s not a comma changed” and then he repeated “there’s not a comma changed” over and over. At first, I was relieved that the concerns about the Atlantic Accord were unfounded.
That was until I realized that they had “reinterpreted” the expression “exists at the time” to mean something it was never intended to mean. Mr. Flaherty was technically correct when he said that “there was not a comma changed.” However, he didn’t mention that they had “reinterpreted” the words that completely changed the substance of the deal. Amazing.
Seeking clarification, I approached the Chief Law Clerk of the House of Commons, Mr. Rob Walsh, and asked if he could help figure out what was going on. He said that the only words that really mean anything are the words in the actual legislationthat implements the “Offset Agreement.” He turned to a huge wall of legislative documents behind his desk and found the records that implemented the Atlantic Accord and the Offset Agreement.
The language in the 2005 legislation says, “The physical equalization payment that may be made to the Province for that fiscal year under the equalization formula in effect at that time.” Very Clear. The equalization payment for any year will be based on the formula in effect at that time.
Although the words in the “agreement” could be “re-interpreted,” the actual legislation words cannot. The actual legislation says that Nova Scotia is entitled to the latest equalization formula in effect at the time the calculation is made.
Are you confused yet?
I then met with Prime Minister Harper. I provided him with a note written by the Chief Law Clerk, Rob Walsh, which said the budget is in contravention of the Offset Agreement legislation. Mr. Harper took a quick look at the letter and sent it flying down the table. Then he said, “It doesn’t matter what Rob Walsh says… I decide what equalization formula exists.”Then he added some special comments to me which I will not repeat in mixed company.
Bruce McKinnon cartoon, annotated
Later, I informed Prime Minister Harper that I would be voting against the 2007 budget unless the Atlantic Accord was honored in the spirit and the letter of the legislation. I didn’t want anybody to say I blindsided them. I even did an interview with the Truro Daily News to state publicly exactly what I was going to do.
The day of the vote was an amazing day. Filled with intrigue, surprises, threats, intimidation, untruths, and pressure. At a later date, I will tell the whole story of that day… but, fortunately, I got through the day.
One example of the intrigue is that Ministers Peter MacKay and Jim Flaherty held a “secret” meeting with all Atlantic MPs on the morning of the vote. That is all MPs… except me. My understanding is that other MPs asked about my whereabouts, and the ministers said that I was too contrary and there was no point in inviting me.
Among the long list of promises they made to me and to Nova Scotia minutes before the vote was a promise that the Province could keep the $831 million “Crown Share Payment,” and that Nova Scotia could have a major portion of the $400 million Atlantic Investment Partnership Fund. These verbal offers didn’t matter because Nova Scotia already had a signed contract (Atlantic Accord) with this government, and they were not honouring it. I had zero faith in a verbal proposition.
Near the end of the day, and minutes before the vote, I was able to call my wife Rosemary to say that the Conservative Party leaders were applying a ton of pressure and making all kinds of wild promises if only I would vote for the budget. I told her that I didn’t want to vote “No” for the wrong reason. What did she think?
After a moment, she asked: “Is it the Atlantic Accord?”
I said: “No… it is not.”
She then said: “Well, go vote.”And vote I did.
Seconds after the vote, MP Jay Hill, Caucus Whip, was standing over me at my desk. He had a pencil in his hand, and he almost stuck it up my nose as he said, “You are expelled from Caucus!”
Other MPs had previously said that “if you stand up and vote against the Budget… you will not be standing alone.” However, when I stood up to vote No… I was the only one. I do not know what happened at the•morning meeting• with all of the MPs (except me), but it seemed to have reversed some of their positions.
The next day, my seat was no longer on the front bench on the government side. I found my seat on the very back bench of the opposition side.
There’s a lot more to this story, which I will someday detail when I perhaps write a book.
Thanks for reading,
Bill
TO BILL: UM, TIMBER —BRUCE
Later, I informed Prime Minister Harper that I would be voting against the 2007 budget unless the Atlantic Accord was honored in the spirit and the letter of the legislation. I didn’t want anybody to say I blindsided them. I even did an interview with the Truro Daily News to state publicly exactly what I was going to do.
The day of the vote was an amazing day. Filled with intrigue, surprises, threats, intimidation, untruths, and pressure. At a later date, I will tell the whole story of that day… but, fortunately, I got through the day.
One example of the intrigue is that Ministers Peter MacKay and Jim Flaherty held a “secret” meeting with all Atlantic MPs on the morning of the vote. That is all MPs… except me. My understanding is that other MPs asked about my whereabouts, and the ministers said that I was too contrary and there was no point in inviting me.
Among the long list of promises they made to me and to Nova Scotia minutes before the vote was a promise that the Province could keep the $831 million “Crown Share Payment,” and that Nova Scotia could have a major portion of the $400 million Atlantic Investment Partnership Fund. These verbal offers didn’t matter because Nova Scotia already had a signed contract (Atlantic Accord) with this government, and they were not honouring it. I had zero faith in a verbal proposition.
Near the end of the day, and minutes before the vote, I was able to call my wife Rosemary to say that the Conservative Party leaders were applying a ton of pressure and making all kinds of wild promises if only I would vote for the budget. I told her that I didn’t want to vote “No” for the wrong reason. What did she think?
After a moment, she asked: “Is it the Atlantic Accord?”
I said: “No… it is not.”
She then said: “Well, go vote.”And vote I did.
Seconds after the vote, MP Jay Hill, Caucus Whip, was standing over me at my desk. He had a pencil in his hand, and he almost stuck it up my nose as he said, “You are expelled from Caucus!”
Other MPs had previously said that “if you stand up and vote against the Budget… you will not be standing alone.” However, when I stood up to vote No… I was the only one. I do not know what happened at the•morning meeting• with all of the MPs (except me), but it seemed to have reversed some of their positions.
The next day, my seat was no longer on the front bench on the government side. I found my seat on the very back bench of the opposition side.
There’s a lot more to this story, which I will someday detail when I perhaps write a book.
Thanks for reading,
Bill