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Text Box: The Atlantic Accord: A Fact Sheet   The current debate over the Atlantic Accord has received much attention over the past number of weeks and has stirred the emotional sentiments and nationalistic pride of Newfoundlanders and Labradorians.   While there is much to this debate, very few facts have actually been presented in a coherent manner to help the people of this province understand the true intricacies of the issue.   The following are a list of  facts that may help inform the current debate over the Atlantic Accord:   Fact # 1     Premier Brian Peckford asked the courts to make a decision regarding ownership of offshore oil  resources. The Newfoundland Court of Appeal and the Supreme Court of Canada decided that Canada, not Newfoundland and Labrador, is the owner of the offshore petroleum resources on the continental shelf.     Fact #2   Premier Brian Peckford and Prime Minister Brian Mulroney signed the Atlantic Accord in 1985. That Accord was designed to make Newfoundland and Labrador the principal beneficiary of our offshore resources. Since oil first flowed in 1997, Newfoundland and Labrador has been  receiving 100% of provincial offshore royalties and taxes. However, as a result, our equalization payments have been clawed back.   Fact #3     As a general rule, when a province raises more money itself, it gets less money from the Equalization Program.

Text Box: Fact #4     The Atlantic Accord has allowed this province to keep all of our offshore royalties. As well, Newfoundland and Labrador retains 30% of the equalization payment that would normally have been clawed back.   Fact #5     The current debate is about whether or not Newfoundland and Labrador should be permitted to keep the other 70% that is being clawed back from our equalization payment.   Fact #6     The intent of the Atlantic Accord was to permit this province to retain our oil royalties and equalization payments for a fixed period of time.     Fact #7     The period of time up until 2011 was expected to be sufficient to allow our province to operate above and beyond the equalization formula and “catch up” to the rest of Canada. This has not happened.     Fact #8   The Prime Minister knew these details and knew exactly what the province was looking to receive when he made his commitment during the election. This was not a new request to Prime Minister Martin. We had been asking him since 1997 for an arrangement that allowed this province to receive our offshore royalties and equalization payments free from clawback for a period of time that would allow our province to catch up to the rest of Canada.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Text Box: Fact #9     The federal offer of October 24th does not allow this province to keep 100% of offshore royalties, as well as 100% of our equalization payments. The current federal offer does not match the Prime Minister’s commitment.     Fact #10     The biggest flaw in the federal offer is that it arbitrarily caps the amount of money we can keep in any one year. For example, if the price of oil stays high, we would not keep any of our equalization payments  in some years. This would destroy the notion of allowing us to catch up to the rest of Canada.      Summary   Newfoundland and Labrador must be allowed to keep our offshore royalties and our equalization without clawback for a period of time that allows us to catch up economically to the rest of Canada. This was the objective of the original Atlantic Accord, but has obviously not resulted in the desired outcome.     This province does not expect to keep all of our offshore revenues and all of our equalization forever into the future. What we do expect is that our equalization payments continue to flow to the province without clawback until this province is provided the same economic opportunities as other provinces have been in the past.       Proposed Solution     · The federal government must remove the       arbitrary and unreasonable yearly cap on our       revenues.  

Text Box: · Some appropriate review mechanism must be established to review the economic situation of our  province after an eight to ten year period. This would allow our province to receive 100% of  our offshore royalties and 100 % of equalization payments for a reasonable period of time that would allow us to catch up to the rest of Canada.     · The federal government can give us this money in a manner that is understandable and defensible in the rest of Canada. This would be in the best interest of everyone involved.   Our Position   The Liberal Party of Newfoundland and Labrador has always supported the province’s position of receiving 100% of our offshore revenues. The  position of the province today is the same position of previous governments since 1997.   The time is now for the province to secure an arrangement to ensure 100%  of offshore royalties are realized in Newfoundland and Labrador.  Non-renewable resource royalties are one-time  revenues.  We must do it right the first time and we must reap the benefits now before we lose them forever.  These one time revenues can help secure a more prosperous future for this province.   That’s why we remain committed to working with the current government to find ways to ensure our province receives 100% of its offshore resources with no loss of our equalization payments.   Roger Grimes Leader   Office Of The Official Opposition Fifth Floor, Confederation Building P.O. Box 8700 St. John’s, NL A1B 4J6   rogergrimes@gov.nl.ca Tel: 709-729-3391 Fax: 709-729-0328