Fiscal stabilization reforms to be a focus of premiers meeting: Moe

WATCH ABOVE: Consensus possible at premiers meeting, Moe says

EDITOR’S NOTE: This story originally stated Deputy Prime Minister Chrystia Freeland would attend the meeting. That was incorrect. It is a meeting of the premiers only.

Saskatchewan Premier Scott Moe says potential reforms to the fiscal stabilization program will be a likely focus of the upcoming meeting between provincial leaders.

Premiers are set to meet in Toronto for two days beginning on Monday.

Those talks will come after an election in October that rubbed raw, deep regional divisions and which prompted Prime Minister Justin Trudeau to formally task Deputy Prime Minister Chrystia Freeland with addressing national unity, among other issues.

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In an interview with The West Block‘s Mercedes Stephenson, Moe said the premiers reached out to him as head of the Council of the Federation asking for an opportunity to seek consensus and unity “in light of the divisions that manifested themselves across this nation on election night.”

“The priorities will be, are there a few items where the premiers can come to consensus on?” Moe said, pointing to both interest among some provinces in reforms to equalization, which could prove contentious, and reforms to the fiscal stabilization program, where unity may be more achievable.

“Equalization is a very divisive conversation at times across this nation.”

“It’s a program many feel is not fair to all provinces in this nation but it’s also a program many provinces do rely on in this nation. So it’s been around for some time but likely would take some time to alter or change,” he said.

“The fiscal stabilization program, on the other hand, there’s an opportunity there to address a program that was designed to be very reactive and when you look at the lack of investment in that program over the last decade or so, it has proved to not be that reactive,” Moe continued.

“So it is a program that definitely should be looked at and we’re going to have some very good discussions about fiscal stabilization.”

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The fiscal stabilization program is a vehicle through which the federal government can provide aid to provinces suffering an economic downturn.

The website for the program states its purpose as being to help provinces hit with a “year-over-year decline in its non-resource revenues greater than 5 per cent.”

But it is not designed to be used as a way to receive compensation for declines in resource revenues, something Alberta has been experiencing since the drop in the price of oil in 2014 hit the energy industry there.

There are two existing constraints on when a province can qualify for the program: the economic decline can’t be attributable to “provincial decisions to reduce taxes; policy changes made by the province in the rate or in the structure of provincial taxes are factored out when measuring revenue declines.”

And revenue resource declines are only taken into consideration when the annual decline is more than 50 per cent.

Alberta has received money through the fiscal stabilization program — but the problem raised by critics is, it hasn’t received enough.

Payments are capped at just $60 per person. So when Alberta government revenues dropped by about $7 billion in the 2015-2016 fiscal year, it got $250 million through the fiscal stabilization program.


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Alberta Premier Jason Kenney wants the cap removed so that Alberta can apply for a greater amount of money, and the federal Liberals have signaled they are open to all options when it comes to talks about things like equalization.

Moe said he wants to see the talks focused on whether both programs are really doing what they are designed to do with the goal that progress can be made on setting priorities that will help heal some of the divisions exposed in the election.

“We have some divisions — deep divisions — across this country and those were very evident with the results on election night,” he said.

“This meeting is to discuss  … can we come to a consensus on a few items to provide, as I said, not only guidance for this minority administration that we have governing this nation now, but also to provide the assurance to all Canadians that although we have a number of things we do not agree on, there are a number of things we do agree on and we’re going to move forward on those.”

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