Fixing Newfoundland’s fiscal problem requires long-term vision

With Jackson Doughart

Ferryland district MHA Keith Hutchings wrote in a letter to The Telegram recently, “It is time … to challenge the federal government on our province’s share of equalization.” (“Why isn’t the government demanding equalization?” Nov. 14).

In his opinion, accepting that Newfoundland and Labrador is currently ineligible for equalization transfers is “essentially waving the white flag of surrender over a federal program that we, as Newfoundlanders and Labradorians, have as much right to as any other province.”

While Hutchings’ sentiment is right, his proposal is not technically possible under the rules. Equalization is not a conventional entitlement for which one applies in a time of need. The requirement from Section 36(2) of the Constitution Act of 1982 seeks “to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public service at reasonably comparable levels of taxation.”

The formula to calculate the transfers, and to…