NSEF Correspondence with the Provincial Government
On March 1st, Dr. Maroun, representing the NSEF Board sent a letter to the NS Finance Minister the Hon. Karen Casey. You can read that letter here in a previous NSEF post.
The below is the response from Minister Karen Casey and below her letter is the response from NSEF Chair, Fr. Albert Maroun, PhD
From: Finance Minister <[email protected]>
Date: Fri, Mar 23, 2018 at 4:19 PM
Subject: FIN-2017-0138/030118008 - Letter to Cape Breton's MLA's from NSEF
Cc: Premier < [email protected]>
March 23, 2018
Mr. Albert Maroun and Nova Scotians for Equalization Fairness Group Sydney
Email: [email protected]
Dear Mr. Maroun:
I am responding to your correspondence of March 1, 2018, on behalf of the Honourable Steven McNeil, Premier of Nova Scotia. There appears to be some confusion between the Government of Canada’s equalization program and the unconditional operating grant that the Department of Municipal Affairs administers, which also happens to be called “equalization.” These programs are completely unrelated to one another, except for their general intent of equalizing fiscal capacity.
The federal government’s equalization program is enshrined in the Constitution Act, and it is intended to address fiscal disparities among provinces. It is also unconditional in that “receiving provinces are free to spend the funds according to their own priorities.”
As you are aware, Nova Scotia’s share of the national equalization program in 2017-18 is $1.78-billion. These funds go into the general revenue of the province, and are used to provide programs and services to all Nova Scotians. They help pay for health care, education, community services, museums, libraries, roads, bridges, and other programs and services in all regions of the province, and I assure you that Cape Breton is treated the same as any other region. No region or municipal unit is given a specific allotment of the federal equalization funding.
Having said that, our government provides many supports to Cape Breton and its citizens, all of which are funded from the province’s general revenue fund, where federal equalization funding is allocated. For example, the province supports the Cape Breton Partnership and their work on immigration as well as other initiatives. In the Cape Breton Regional Municipality (CBRM), specifically, there are many publicly funded institutions, including five hospitals, schools, Cape Breton University, and a Nova Scotia Community College campus, all of which are funded by the Provincial government.
The region benefits from a variety of programs, such as Nova Scotia Works and the Additional Officer Program, as well as infrastructure investments from the Department of Transportation and Infrastructure Renewal. Taken together, these programs, services, and investments serve as a source of good jobs and learning throughout the region. As well, two cabinet ministers were appointed from Cape Breton – Mr. McLellan and Mr. Mombourquette -- and they advocate strongly for the region in government.
Turning now to the provincial equalization program, the Municipal Grants Act is provincial legislation that provides for an unconditional operating grant that is paid by the province to eligible municipalities; it also happens to be called “equalization.” The money for this program also comes from the province’s general revenue fund; it does not flow from the federal program. The grant takes into consideration the strength of a municipal units’ tax base and expenditure needs. The provincial equalization grant is paid to municipalities that need assistance to fund a standard level of municipal services, such as police, fire, and transportation. These equalization payments to municipal units were $30.5 million in the last fiscal year, and CBRM received more than $15 million of that total; all of which CBRM was free to spend as it saw fit.
More generally, provincial governments across the country provide unconditional grants to municipalities, and while not all are called “equalization,” they generally recognize the various capacities of their municipalities. I hope this distinction helps clarify the difference between the two programs.
I will conclude by drawing your attention to the fact that the Nova Scotia Supreme Court, the Nova Scotia Court of Appeals, and the Supreme Court of Canada, have all dismissed or refused to hear the argument that the CBRM is not receiving the equalization funding to which it is entitled; municipalities are not entitled to federal equalization funding. As stated previously, however, Cape Breton in general, and the CBRM in particular, is treated in the same manner as the other regions of this province; receiving investment, services, and programs that directly and indirectly benefit the region and those who live there.
I trust this letter clarifies matters and addresses your concerns. I would also encourage you to share this correspondence with your membership and anyone else who may be interested.
original signed by
Minister of Finance and Treasury Board
Hon. Karen Casey
Minister of Finance & Treasury Board
Provincial Building, 7th Floor
Tel: 902-424-5720 Fax: 902-424-0635
E-mail: [email protected]
NSEF Response Letter, sent to both the Premier, the Minister of Finance and to the Cape Breton's MLA's
From: Albert Maroun <[email protected]>
Date: Wed, Mar 28, 2018 at 12:03 PM
Subject: Re: FIN-2017-0138/030118008 - Letter to Cape Breton's MLA's from NSEF
To: Finance Minister < [email protected]>, [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], Allan MacMaster < [email protected]>, [email protected], [email protected], [email protected], [email protected], [email protected]
Dear Premier Steven McNeil & Karen Casey:
Thank you for your reply dated March 23, 2018, through Minister Karen Casey.
Regarding her reply, however, I want to make the following comments to you for your response.
What happened to Minister Derek Mombourquette? Isn’t this his portfolio of responsibility?
Minister Casey states the usual defense from government that the federal equalization and the provincial equalization grant “are completely unrelated to one another.” This is only a relevant comment to a government intent on ignoring the significant percent of the total equalization federally provided because of the property fiscal capacity weakness that is only related to municipalities.
Minister Casey further adds: “…I assure you that Cape Breton is treated the same as any other region. No region or municipal unit is given a special allotment of the federal equalization funding.”
The minister is correct in that all regions are proportionally and economically discriminated against with the inadequate provincial government equalization grant of “$30.5 million.” Five towns have already gone through the dissolution process and at least five more are in the process, and many more municipal units are economically struggling to survive. I have no rebuttal comments to her assurances that Cape Breton is treated as poorly as any other region!
According to our research, deficiencies in fiscal capacity related to property tax and miscellaneous revenues involves a significant part of the total federal Equalization program. In fact, in 2011-12 that was 26.8 per cent of the $1.417 billion, according to the Nova Scotia Minister of Finance Maureen MacDonald’s letter dated March 8, 2013. This was further corroborated by correspondence from the federal Dept. of Finance dated April 30, 2012, which stated, “approximately 26% of the N.S. equalization payment in 2012-2013 is due to the province’s relative weakness in property tax fiscal capacity.”
Property tax is the municipal government’s main source of revenue – a revenue source not allocated to the provincial or federal government. That significant part (approximately 26%) of the whole federal Equalization transfer is generated due to this province’s property tax fiscal capacity weakness and unless it is applied to address that economic weakness, where exactly,Premier McNeil, is this portion of the federally provided Equalization funding being spent in this province? And, how do you plan to address the compounded and growing municipal economic weakness resulting after so many years of the current inadequate provincial government equalization grant? Please enlighten us!
Minister Casey further states, “The federal government’s equalization program…is also unconditional in that ‘receiving provinces are free to spend the funds according to their own priorities.”
Are you telling Nova Scotians, too, that this practice also exempts the provincial government from being in compliance with the enshrined law of s.36 of the Constitution Act, 1982? And if you are claiming your government’s practice complies with section 36(2), will you provide the financial evidence to show that compliance?
Also, Premier McNeil, will you direct us to the constitutional authority in the Constitution Act, 1982, that legally authorizes for this practice – particularly after this federal funding was enshrined in the Constitution Act?
Is Minister Casey also saying the provincial government’s equalization grant of $30.5 million each year does comply with the Constitution Act, 1982, when the federal government provides approximately $477 million due to this municipal economic weakness in property tax fiscal capacity?
Minister Casey goes on to use the courts to defend the government’s municipal funding practice. This is exceedingly important since the courts acted as the governments appointed gunfighters to ensure the government’s handling of this federal funding would not face adjudication before a trial judge.
The Nova Scotia Court of Appeal went to a rather bizarre extreme when it concluded: “In an appropriate context, s.36 might represent a justiciable commitment, but only among the federal and provincial governments who were privy to the agreement that is represented by s.36.”
Shamefully,this court has exempted both levels of government from having to comply with s.36 of the Constitution Act. The ruling has subordinated our supreme law of the land to whatever the whim of our governments decide on the federal Equalization funding to the eligible provinces.
This then explains why over the last twenty years, for instance, the federal government provided over $30,000,000,000 in Equalization Payments to Nova Scotia and, according to Minister Casey and yourself, distributing a mere $610 million in the provincial equalization grant to economically depressed municipalities was pursuant to what s.36 constitutionally stipulates. Is this correct?
Premier, your party at its Annual General Meeting saw the problem with the inadequate provincial equalization grant program of only $30.5 million each year when in 2011 it called in a resolution for an audit of this federal equalization’s distribution after it is received by this province. Was this resolution merely a political stunt to gather votes while the party was in Opposition?
Premier McNeil, our members of the Nova Scotians for Equalization Fairness committee would appreciate your comments on these observations of the government’s handling of the federal Equalization payments within this province.
Fr. Albert Maroun, PhD &
The Nova Scotians for Equalization Fairness
Please note that this letter and response will be posted on all platforms of social media. The NSEF and the citizens of the province of Nova Scotia will be waiting for your answers to our questions.
So, there is your invite people. Please share, comment, engage and join us and become the change!
Also, please attend our upcoming public meeting here. April 3rd at 7:30 pm at the Cedars Club, 30 MacKenzie Street, Sydney.