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SOURCE: CJME RADIOPROGRAM: JOHN GORMLEY LIVE
DATE: OCTOBER 11, 2007TIME: 10:30
REFERENCE: 1110DOC1LENGTH: 8.5 MINUTES
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INTERVIEW: STEPHEN HARPER, PRIME MINISTER
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JOHN GORMLEY (Host): We go to Ottawa and Prime Minister Stephen Harper. Prime Minister, thanks for taking our call.
STEPHEN HARPER (Prime Minister): Yeah, hi John. Good morning. We didn’t have an election called when we called you. I will obviously try and avoid any comment on the election. But delighted to be on your show.
GORMLEY: One thing this election is going to be focusing on a great deal is equalization Prime Minister. Back in 2004 and other times you promised to remove all the non-renewable resource revenue from the equalization formula and go to a ten-province standard. It did that in the last budget. But there was a cap that capped what was paid to Saskatchewan to 226 million one year, and then now nothing after that. People say, on both the Sask Party side and the NDP side, that you broke a promise.
HARPER: Well, let’s be clear John. We had promised to revise the equalization formula to exclude natural resources. That’s exactly what we did. Equalization has always had a cap. There always has been a cap. The cap has been the national average. You can’t get equalization payments if you have a fiscal capacity, a financial capacity, the provincial government, above the national average. We actually raised that cap in the budget. We raised it from the national average up to the level of Ontario. Really, a fundamental question John here is, you know, an argument made by the Government of Saskatchewan and to some degree by the Government of Newfoundland, that we could make equalization payments to a province even if its economy were booming and it had a fiscal capacity way above the national average. I just don’t think any sound equalization program can be based on that. That runs contrary to the principles of equalization. No federal government, in my judgement, is ever going to enact such a program. So look, if Saskatchewan were to slip back into, you know, its economy were to slip back, if it were to slip back into have-not status, under the change we made Saskatchewan would benefit enormously from enhanced equalization payments. But it won’t as long as its economy is booming. That’s the way the program is supposed to work. And frankly, my preference as Prime Minister of Canada is to see Saskatchewan keep booming.
GORMLEY: Prime Minister Stephen Harper in Ottawa. So is there is a shortfall between 800 million, which Premier Calvert says we are entitled to, and the 226 million that we get?
HARPER: No, not at all. What has happened in the last few years is that Saskatchewan’s economy has improved its performance. Saskatchewan’s financial capacity has gone up. If you took this formula back three or four years, it would pay you somewhere in the vicinity of five, six hundred million dollars. If you put it back five years you’d probably be up to 800 million. But today it’s 200 million. Next year it probably won’t be anything. That’s, that’s not a consequence of the formula we brought in John. We brought in what we promised. But it’s a consequence of the improved performance of the Saskatchewan economy. Equalization is tied to economic performance.
GORMLEY: Is Nova Scotia analogous with Saskatchewan in terms of getting a deal done?
HARPER: Well, let me be clear about what we did yesterday. What we said all along in our budget is that we were going to provide a single new national equalization formula for everyone, but we would honour the deals that had already been signed with Nova Scotia and Newfoundland. What we did yesterday was simply clarify that Nova Scotia cannot lose benefits it previously got if it switches to the new formula. It’s still a choice of one or the other. And we’ve always been clear on that. This is the difference, in effect, between Nova Scotia and Newfoundland’s position. Nova Scotia just wanted us to be clear we would respect the deal we’d already signed. Newfoundland wants a new special equalization arrangement. And the Government of Canada has been clear. The new formula has to be the same for every province. In fact, Nova Scotia has opted into the same formula Saskatchewan has.
GORMLEY: So is Newfoundland being unreasonable?
HARPER: [Laughter] Well, you know, Premier, Premier Williams has a unique style of federal-provincial relations. Let me just put it that way. You know, all I can say, all I can say John is, to be very clear, we will respect the deals that were signed. That’s what we’ve confirmed with Nova Scotia. The same consideration for Newfoundland. But everyone else, if it’s the new formula, it’s the same. We are not going to give the Atlantic provinces or anybody else a new side deal. And we’ve been very clear on that.
GORMLEY: Prime Minister Stephen Harper in the nation’s capital. Prime Minister, obviously, and again, you said you want to stay away from the Saskatchewan election. Premier Calvert said last night,“I predict Stephen Harper is going to interpose himself into this election and support the Saskatchewan Party.” How do you respond?
HARPER: Well, you know, I’ve, we’ve had a number of provincial elections, as you know, across the country. I have no reason to do that. As you know, we don’t really have a, a significant provincial Conservative Party in Saskatchewan. The Saskatchewan Party is, is an independent party. And you know, our people are free to support whoever they will support. And look, the people of Saskatchewan – I might have my preferences John – but the people of Saskatchewan will pick their provincial government. And look, the wish of my government will be to work with whoever is, whoever is the premier, whoever that government is, to try and make things better for the people of Saskatchewan. I think we have pretty good relations with, frankly, just about all the other provincial governments with the possible exception, with the exception of Newfoundland. So you know, we do work at this. But whatever we do – and this is where a federal government is different than the provincial government – whatever we do, we have to be able to defend across the country. You know, I can defend giving Saskatchewan a better equalization formula, as we did. But I could never defend paying a province, that frankly has about the second strongest economy in the country right now, equalization under those circumstances.
GORMLEY: How would you describe your working relationship with Premier Calvert?
HARPER: Well you know, I think it was actually not bad until, until this issue. You know, look, the Premier obviously is a different stripe than I do (sic). We differ philosophically on a number of issues. You know, I’ve, I’ve, I’ve found him a thoughtful person. But you know, obviously we have a pretty strong disagreement on a couple of issues. And I, I, I probably shouldn’t go farther because I think the people of Saskatchewan have to make these judgements John.
GORMLEY: The Prime Minister in Ottawa. Prime Minister, I do want to talk to you briefly – and I know you’re in the middle of things – the likelihood of a federal campaign. Of course everybody’s thinking provincial election now. What is the likelihood you’re going to be into an election following your throne speech (inaudible)?
HARPER: I, you know, I can’t answer that John. I can say that, you know, we will present a throne speech and a plan for governing the country that I don’t think is going to surprise people. We’ve been fairly clear about where we’re going. It will be clear where we want to take the country. You know, I think it’s fairly apparent that the NDP and Bloc will probably vote for an election. The Conservative Party members will be voting for the throne speech and they will be voting against an election. So you know, it’s really up to Mr. Dion at this point. But my preference has always been to govern. We’ve set a fixed election date for October 2009 and my preference is to make it.
GORMLEY: Anything in that throne speech that is going to cause Mr. Dion significant difficulty?
HARPER: Well, I don’t know if it’s in the throne speech. I think the significant difficulty for Mr. Dion John is that he laid down some markers prior to the throne speech, markers he knew the federal government, you know, on issues. He took positions on issues that he said were not negotiable, that he knew the federal, that our government does not agree with. And that will cause him some difficulty. But you know, this government has to do what it, what it believes is in the best interest of the country. And I can tell you that the positions we’re taking in the throne speech will not surprise anybody. They’re, they’re thought out, considered positions that we’ve developed, you know, in our election platform and in the year-and-a-half we’ve been governing. And you know, Mr. Dion is going to have to decide whether his disagreements with those positions warrant an election campaign.
GORMLEY: Prime Minister Harper, thanks for taking the time today. And we’ll talk again soon.
HARPER: Yeah. Thanks John.
GORMLEY: Take care.
HARPER: Yeah. Bye, bye.
GORMLEY: Prime Minister Stephen Harper.
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