Hello to all:.....The following is a lot to read but is important. The NSEF does publish all correspondence with politicians for the public to view and comment on. The NSEF sent a letter to Rodger Cuzner and Mark Eyking and we demanded them to arrange a meeting with the powers to be in Ottawa. This letter is their response and we have included one of our board members response back to them below their letter. Please note that this is only one of the NSEF Board Members response to Mark and Rodger. There will be more to follow...…

RE: The NSEF planned MP Protest January 11th, 2019

To the Nova Scotians for Equalization Fairness group:

We write with regard to your email dated December 27, 2018, regarding in-office protests at our constituency offices.

For years, both of our offices have been working with your group regarding concerns around the federal government’s equalization transfer to the Province of Nova Scotia. We have met with members of your organization on numerous occasions, written letters to provincial and federal Ministers, passed on all correspondence as requested, sought responses to your questions
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All correspondence with our offices from the federal Minister of Justice and Minister of Finance indicates that this matter does not fall under federal jurisdiction. The correspondence your group has independently sent states this as well. Once the equalization transfer payment is made from the federal government to any provincial government, that province has the self-governing ability to prioritize the _ funds. The federal government does not intervene on how the province prioritizes funds. Section 36 (2) of the Constitution Acts 1867-1982, Parts III: Equalization and Regional Disparities clearly states that:

“.. the government of Canada is committed to the principle of equalization payments to ensure that provincial governments have sufficient revenues...”

This underlines the agreement being between the government of Canada and the provincial governments. Section 36 (1) states that the agreement will not alter the authority of the provinces:

“Without altering the legislative authority of Parliament or the provincial legislatures, or the rights of any of them with respect to the exercise of their legislative authority...”

The federal position has been unequivocally stated by former federal Minister of Finance, the late Jim Flaherty, and reaffirmed by our current Minister of Finance, Bill Morneau, and Minister of Justice, Jody Wilson-Raybould. The Library of Parliament, which is an independent unit of the House of Commons and with no political affiliation, supports this position: “Equalization helps ensure that Canadians residing in provinces have access to a reasonably similar level of provincial government services at reasonably similar levels of taxation,”

“There are no conditions on the use of equalization payments or the standards that should be achieved by the equalization receiving province. Instead, the provinces make decisions on behalf of their residents, and they are accountable to voters for the services they provide.”

It may be worth noting that when former CBRM Mayor, John Morgan, presented the case for changing the equalization formula to the Standing Senate Committee on National Finance in 2009, the committee was appreciative of the funding challenges faced by many communities across the country. In its published, final report, no recommendation was made regarding equalization or the placing of conditions on provinces. Former Senator Lowell Murray, who was born and raised in New Waterford, stated in his summary comments in the report that he could never see a federal government of any political stripe alter the program to place conditions on the transfer.

In the Constitution Acts, 1867-1982 the language is extremely clear that Provinces have exclusive jurisdiction over Municipalities. It is stated under section 92(8), Exclusive Powers of Provincial Legislatures.

“in each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say, {8)Municipal Institutions in the Province”

This is supported by constitutional lawyers and scholars;

Joseph Magnet, a constitutional lawyer and professor at the University of Ottawa, said Canada's Constitution Act of 1867 clearly spells out how the provinces have "complete and exclusive power over municipalities." This includes the "power to create, amalgamate or destroy them," he said. "A constitutional change would be necessary to change this.”

Richard Tindal, a retired professor at St. Lawrence College and co-author of the textbook "Local Government in Canada", agreed that the federal government has "no jurisdiction whatsoever" over municipalities, which were created in the constitution as "creatures of the provinces."

We understand that your group would like the constitution changed. In order to change the constitution, there must be an agreement between either the majority of Provincial Legislatures, or the number of Legislatures with provinces representing the majority of Canadians.

It is your democratic right to protest, and we will not stop you from protesting our constituency offices, however this is not a federal matter. We do not speak for the provincial government, and your efforts may be best utilized by contacting the Nova Scotian Federation of Municipalities. This matter has never been listed as a priority for the Nova Scotia Federation or the National Federation, which represents 5,550 municipalities across Canada.

We know that our government’s initiatives, like the Canada Child Benefit, which brings in roughly $108 million dollars annually to Cape Breton Island, and the increase in the Guaranteed Income Supplement, will have a considerable impact on the people we represent, many of them as our most vulnerable. We continue to work on infrastructure investments that help move our community and grow our economy.

We respect the work that your group has done to shed light on the fiscal challenges of Cape Breton, however it is important to know exactly where the focus of the debate must be.

Sincerely,

Rodger Cuzner, M.P. Mark Eyking, M.P. Cape Breton —Canso Sydney — Victoria


January 17, 2019

To Rodger Cuzner, M.P. and Mark Eyking, M.P.:

Thank you for your correspondence of January 11, 2019 regarding NSEF’s in-office protest at your constituency offices and your comments regarding the federal Equalization payments to Nova Scotia.

In reply to your equalization comment of washing the hands of the federal responsibility, I will bring your attention to the Nova Scotia Court of Appeal, May 08, 2009 between the Cape Breton Regional Municipality and the Attorney General of Nova Scotia. The conclusion of the Chief Justice Michael MacDonald was as follows:

“[86]…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. It is not actionable by an individual or municipality…”

So, you can see this issue is more the legal responsibility of the federal government because it is funded from federal taxes and controlled by the federal government. That control was legally imposed by your government in its recent unilateral extension of the present formula for an additional five years - without any consultation with or from the provinces.

One can also refer to the Conservative Harper government changes in the 2007 budget that benefited Alberta the most in terms of the percentage increase in the total package of these federal government transfers, which also included the Canada Health and Social Transfer.

In Nova Scotia, however, that per capita change will not be beneficial to our health care financing given no consideration was made for the funding of the per capita needs as you know Nova Scotia has an older demographic - and your government did not change that funding factor either. And according to the NSHC that will result in a shortfall in funding of $993 million at the end of this Accord in 2024. This is a slip up on your part too. Shame!

Additionally, under your representation, the federal government has accepted the Conservative Harper elimination of the 6 percent healthcare funding escalator and maintained the funding growth of 3 percent or GDP growth, whichever is greater. Further, it was reported that the federal funding footprint in 2024 will be a low as 18.6 percent, according to the Council of Canadians, and trending lower.

It appears this is the federal government’s plan to abandon our public healthcare and it is happening under your political watch. Remember when the federal funding footprint started at 50%. The federal funding reduction in 2014 will reduce funding by about $36 billion dollars according to the provincial healthcare ministries. And subsequent increases will be calculated on the diminished 2014-15 base.

These lowered funding figures are mentioned because our provincial MLAs have said Equalization is being used to finance provincial healthcare and other services. This is the consequence of the federal down-loading of essential costs. Shame on you both for not informing the voters!

As for your referencing Section 36 (1) regarding altering the legislative authority of the provinces, I do not recall there was any attempt to do so and you have not mentioned any. The CBRM court case was asking only for a Declaration from the court that the province was not in compliance with the Constitution and that that decision to bring the province into compliance was left to the discretion of the provincial government.

Your quotes “Equalization helps ensure that Canadians residing in provinces have access to a reasonably similar level of provincial government services at reasonably similar levels of taxation,” was followed by this quote,” There are no conditions on the use of equalization payments or the standards that should be achieved by the equalization receiving province. Instead, the provinces make decisions on behalf of their residents, and they are accountable to voters for the services they provide.”

In making such statements - which are designed to potentially produce the disparity and inequality that exists today outside the Capital Region - both of you are saying by your silence that the federal Equalization is providing reasonably similar levels of services at reasonably similar levels of taxation, which the provincial economic data reflects otherwise.

Five towns have already dissolved and as many more are in the process of dissolution and many municipalities are in economic distress – including the one you live in and are elected to represent.

That you stress there are no conditions on these federal Equalization or a standard that should be achieved is obviously alarming legally - since the Constitution makes that standard the law of this country. You both are avoiding that the transfer of these federal Equalization unconditionally has contributed to the political and economic manipulation of these Equalization transfers by all the provincial governments by placing them in general revenues without any actual accountability or transparency for the citizenry.

Are you aware, too, that the life-long Equalization payments to Nova Scotia totals about $50 billion and that there has been no accountability or transparency for this money?

Your referencing that municipalities have no constitutional standing is irrelevant as municipalities are essentially extensions of the provincial government at the local level, but they do have citizens living in their geographical limits. Citizens are the ones that this constitutional funding is designed for when it sends these federal transfers to the provinces to provide for those same citizens.

And you both are mistaken that NSEF wants a constitutional change. Our group is demanding that the law prescribed in the Constitution must be complied with by both the federal and provincial governments. If you interpret that as a change, so be it!

One of the specific areas that is not being complied with is the significant amount of the yearly total Equalization Payments that are generated by the municipal fiscal deficiency in tax capacity related to property. As you know, property tax is the main tax resource of municipalities.

In correspondence dated March 8, 2013 from the Nova Scotia former finance minister Maureen MacDonald stated that a significant percentage of the total Equalization payments in 2011-12 was 26.8 percent of the $1.417 billion transfer. That tax capacity deficiency in relation to property was almost $380 million in that year. However, only about $32 million was distributed to the forty some municipal units in Nova Scotia.

As representatives for this area, can either of you explain why the federal government continues to provide this amount of funding for the Nova Scotia municipalities’ deficiency in tax capacity while permitting the provincial governments over the years to fund that same tax deficiency with only $32 million?

Was this the economic and political outcome of former prime minister Pierre Trudeau when he enshrined this federal legal obligation in our Constitution – the supreme law of this country? I don’t think so!

Having been witness to such a politically manipulated program, one is reminded of the words of Voltaire when he wrote, “Anyone who has the power to make you believe absurdies, has the power to make you commit injustices.”

Sincerely,

Charles W. Sampson
NSEF