The Liberal Government of Newfoundland and Labrador is launching a constitutional challenge regarding the Government of Canada’s federal Equalization program, and Saskatchewan Premier Scott Moe has offered his support.The announcement was made in a press release by the province Thursday morning."As outlined in the Constitution Act of 1982, Equalization is intended to ensure provincial governments have sufficient revenues to provide comparable levels of public services at comparable levels of taxation. Essentially, fairness for all citizens. Currently, this fairness is not achieved for Newfoundland and Labrador," the statement reads.According to the province, the Equalization formula does not consider the cost of delivering services. In the case of Newfoundland and Labrador, it serves more than 500 communities across a large, geographically dispersed, and aging population connected by almost 10,000 km of roads."To meet the objectives of the Equalization program, it is only just and fair to consider the cost of providing services," the province says.Secondly, total resource revenue is included in the calculation used to determine the fiscal capacity cap on Equalization payments."The current Equalization formula penalizes Newfoundland and Labrador for developing its natural resources, including renewables like wind energy which is used to produce green hydrogen. The province must pay the costs for development, regulation and management of resource sectors and these costs are not considered in the formula. Resources sectors are also subject to commodity price fluctuations, which impacts revenue certainty," the province complains.Thirdly, "Once entitlements have been determined, any excess funding not required to equalize the fiscal capacity of provinces is only distributed to receiving provinces. The Government of Newfoundland and Labrador sides with other provinces (i.e., Alberta) that this excess funding should be distributed to all provinces, rather than only to the provinces receiving Equalization"The constitutional challenge announced Thursday is currently being prepared by the Andrew Furey government and will be filed in a Newfoundland and Labrador court in the coming weeks. The Furey Liberal government has also shared its concerns with Ottawa by letter (available here).John Hogan, Minister of Justice and Public Safety said the constitutional challenge was necessary.“When the Government of Canada dismissed our concerns and extended the Equalization formula until 2029, we were left with no other alternative except to launch a court challenge.”Siobhan Coady, Deputy Premier and Minister of Finance, said, “This challenge is all about ensuring that Equalization achieves what is intended in the Constitution — to ensure fairness among all provinces within Canada relating to the cost of delivering public services. From our perspective, the Government of Canada’s Equalization program is insufficient."Saskatchewan Premier Scott Moe has asked Minister of Justice and Attorney General Bronwyn Eyre to make a legal intervention in support of Newfoundland's challenge..In a statement, Official Opposition Leader Carla Beck called Moe's announcement "pure hypocrisy." She recalled when the Saskatchewan Party government under Premier Brad Wall launched its own constitutional challenge to Equalization then backed down."The Sask. Party has no credibility on Equalization. Zero," Beck wrote."It was Scott Moe’s party who scrapped the previous Saskatchewan NDP government’s court challenge to the Equalization formula in 2008 — all because Stephen Harper asked them to."Saskatchewan New Democrats will always fight for a better deal on Equalization, and would pursue a court challenge to do so."As premier, I will always stand up for Saskatchewan people no matter who sits in the Prime Minister’s office."
