Ottawa, January 28, 2005
Archived - Government of Canada Reaches Offshore Agreement With Nova Scotia
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Prime Minister Paul Martin announced today that the Government of Canada has reached an agreement in principle with Nova Scotia that ensures the people of Nova Scotia will be the primary beneficiaries of offshore resource revenues.
"I am pleased to report that Premier Hamm and I agree that the arrangements we have worked out today fully meet my commitment to address the province's concerns about offshore resource revenues triggering reductions in Equalization payments," stated the Prime Minister.
"This agreement will see Nova Scotia get 100 per cent of offshore revenues, including an advance payment of $830 million," added Geoff Regan, Minister of Fisheries and Oceans and Regional Minister for Nova Scotia.
Minister of Finance Ralph Goodale added, "I am delighted these intense negotiations have resulted in an arrangement that addresses the unique economic situation of Nova Scotia while being fair to all Canadians."
No amendments to the Canada-Nova Scotia Offshore Petroleum Resources Accord or Equalization legislation will be required. Payments under the offshore revenue agreements will be made separately from these accords and the new Equalization-Territorial Formula Financing framework.
Details are provided in the attached backgrounder.
For further information:
Public Affairs and Operations Division
Office of the Minister of Finance
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Elements of the Agreement on Offshore Revenues Between the Government of Canada and Nova Scotia
This agreement provides the following benefits to Nova Scotia.1. 100 per cent protection from Equalization reductions or "clawbacks" for eight years as long as the province receives Equalization payments.
2. An up-front payment of $830 million to provide the province with immediate flexibility to address its unique fiscal challenges. This amount equals about three-quarters of the agreed-upon estimate of potential benefits from this agreement between now and 2012. This payment will serve as a pre-payment of the new 100 per cent protection.3. Nova Scotia will be provided with transitional payments comparable to those of the Atlantic Accord, should it no longer qualify for Equalization.
4. In addition, this agreement provides for a further eight-year extension as long as the province receives Equalization in 2010-11 or 2011-12, and that its per capita net debt has not become lower than that of at least four other provinces.
5. During the second eight-year period, if the province no longer qualifies for Equalization, it will receive transitional payments for two years:
- In the first year, the transitional payment would equal two-thirds of the offset payments it received the previous year.
- In the second year, the transitional payment would equal one-third of the offset payments the province was entitled to the last year it received Equalization.