Speech

From the Prime Minister's Web Site (http://www.pm.gc.ca/)

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PRIME MINISTER HARPER AND NOVA SCOTIA PREMIER MACDONALD RESOLVE DISPUTES OVER ATLANTIC ACCORD

October 10, 2007
Ottawa, Ontario

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Ladies and Gentlemen,

I am here to announce today that the Government of Canada and the Government of Nova Scotia have arrived at a resolution of disputes over the Atlantic Accord.

This resolution is related to disputes involving the recent federal budget, as well as to other longer-standing issues.

First, on the matter of the recent federal budget, the principles of Budget 2007 have been clear.

The federal government has established a new national equalization formula that applies equally to all provinces, while also committing to fully honour the existing signed deals with Nova Scotia and Newfoundland and the benefits previously agreed to.

We have offered Nova Scotia and Newfoundland and Labrador a choice between the 2005 equalization agreements and the new equalization formula, but have said that we will not entertain a combination of both formulas.

Nova Scotia opted into the new national equalization formula last year, a decision which provided benefits of roughly 100 million dollars to the province above its Atlantic Accord arrangement.

Premier MacDonald has expressed a desire to permanently opt into the new formula, but has also raised concerns that Nova Scotia could potentially lose benefits if future oil and gas development made the 2005 arrangement more advantageous over the longer term.

It has never been this government's intention that Nova Scotia (or Newfoundland and Labrador) would lose benefits agreed to under the Atlantic Accord.

We will ensure these provinces keep any such benefits by allowing them to effectively switch back to the 2005 Accord under those particular circumstances.

But, once again, while this gives greater flexibility to Nova Scotia's choice, the province still must choose between the two equalization arrangements; it cannot have both.

Second, we have agreed to an arbitration process to determine the value of the "Crown share" in the original Atlantic Accord.

While the federal government agreed to make the "Crown share" payments to Nova Scotia in the 1986 Offshore Accord, our two governments have not been able to come to an agreement on either the value of these payments or the method of calculating them.

Premier MacDonald and I have agreed to establish a three-person arbitration panel to determine these questions.

One panel member will be appointed by Ottawa, one by Nova Scotia, and the third by consensus of the first two.

The panel will be mandated to report by March 15, 2008.

I believe this is an historic breakthrough – and a thoroughly sensible way to overcome a dispute which has bedevilled successive federal and provincial governments for over twenty years.

Let me just say that these are not easy issues.

The Atlantic Accord is a highly technical agreement over which people of good faith can have differing interpretations.

I want to thank Premier MacDonald and his officials for working with us and our officials to resolve these issues over these past several months, I especially wish to acknowledge my colleagues, Peter MacKay and Gerald Keddy, for the helpful advice they have provided to both of us along the way.

They have been of great help in getting our government to a resolution which deals with Nova Scotia's legitimate concerns over the Atlantic Accord, while respecting the necessity of creating a new equalization formula that treats all provinces fairly and equally.

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The Prime Minister's Office - Communications
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