Conservative leader says Saskatchewan premier shouldn’t worry about formula

PENSE, Sask. — The question of how the federal government shares revenues between well-to-do and more needy provinces is not all that important in the election campaign, Stephen Harper said Thursday.

The Conservative leader brushed aside a question about the equalization formula that Ottawa uses to help have-not provinces pay for services that wealthier provinces can more easily cover.

Saskatchewan Premier Brad Wall has expressed frustration with the formula, saying it doesn’t easily take into account the changes in resource prices, such as oil and hydro, making it years behind the times.

The payment program sees more than $17 billion given annually to poorer provinces. The province that collects the most is P.E.I., at about $1,980 per person.

Wall has even argued that the payments should be halved, with the federal government spending the money instead on things like infrastructure projects across the country.

The constitutionally guaranteed program helps poorer provinces provide government services at tax levels similar to its wealthier neighbours. The federal government calculates how much each province can raise in revenues and then ensures poorer provinces meet the national average.

Harper said the Conservatives have made adjustments to the formula, but didn’t hint at any further changes.

“I may be one of the very few people in the country who understand exactly how the formula works,” the prime minister said.

“It is extremely complicated. We made some adjustments when we first came to office, we made some other adjustments and every few years we examine that.”

He said neither Wall nor voters in Saskatchewan should be worried about the equalization formula.

“I think that is not really the central question (in the election) that the premier — and frankly, for that matter, most people in Saskatchewan — should be concerned about,” Harper said at a campaign stop outside Regina.

“The real issue around this is resource development. This is a province that depends on the development and sale of its natural resources.”

Throughout a week of campaigning in western Canada, Harper has talked up his party’s focus on resource development, such as shipping Canadian oil to foreign markets. That has become trickier amid the plunging price of oil: Moody’s is predicting the price will stay low until 2018 amid uncertainty from Asia, as China devalued its currency for the third consecutive day.

No government — neither federal nor even the Alberta government of Premier Rachel Notley, who Harper has publicly sparred with already during this campaign — can be blamed for low oil prices because they are beyond their control.

Harper said his pitch to Canadians is that his party has managed well those things it can control, citing tax rates, immigration levels, funds to the provinces for health care, education and infrastructure, as well benefits for families.

“All the analysts think — notwithstanding all the ups and downs in the world — the Canadian economy has great prospects going forward just as it has consistently outperformed the other major economies over the last few years,” he said.

“Given that we have many challenges in the world — the fall of oil prices, the instability in Chinese markets, the debt crisis in Europe, still slower growth than we’d like it in the United States — do you want to stay on this plan or move to a plan that involves runaway spending, runaway deficits, runaway taxes as other countries have done?”

Harper was scheduled to fly to Winnipeg for a rally later Thursday before heading to Canada’s North to end the second week of the 11-week campaign.

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Jordan Press, The Canadian Press