Sask. to join Newfoundland and Labrador in court challenge over equalization formula

Saskatchewan’s attorney general says the province will join Newfoundland and Labrador in its challenge of the federal government’s equalization formula.

On Thursday, two Newfoundland and Labrador cabinet ministers said their province will take the federal government to court to try to push a change in the equalization formula, arguing the province is being cut out of potentially billions of dollars in the long term. 

The suit is to be filed in coming weeks in an Newfoundland and Labrador court.

Saskatchewan has not received payments for the past 17 years under equalization — the federal program that provides some provinces with cash to allow for a fair level of services across the country.

In a Thursday post on X, formerly Twitter, Premier Scott Moe said he’s asked Bronwyn Eyre, Saskatchewan’s minister of justice and attorney general, to contact Newfoundland and Labrador’s attorney general to “discuss our province’s legal intervention to support their case.”

Moe has long criticized the equalization formula. He has, in the past, called the formula “flawed” and suggested in 2018 the federal government split the money given to so-called “have-not” provinces among all provinces, based on population.

He’s not the first Saskatchewan premier to criticize the payments. In 2007, the NDP government under then premier Lorne Calvert filed a court challenge of the equalization program. It was dropped the following year, after the Saskatchewan Party came to power under Brad Wall.

Eyre said Moe’s 2018 proposal to change equalization payments was “inexplicably rejected out of hand.”

“We’ve been here before, we have sought solutions. They have been discounted and discredited and disregarded,” she told CBC on Friday.

Eyre said she has told Newfoundland and Labrador Justice Minister John Hogan that Saskatchewan will “formally” support the province’s challenge.

“We are joining — we are intervening. We’re proud to do so… It’s important to highlight that this is obviously a cross-partisan effort between two provinces,” and between her Saskatchewan Party government and the Liberal government of Newfoundland and Labrador.

Eyre said the province believes it’s important to “stand in solidarity with their case,” and the time is right for a challenge of the equalization system.

“A lot has changed over the years and there has been an eroding of the relationship with the federal government. There’s an increasing sense that there is a great deal of injustice inherent in the equalization formula” and “an enormous undermining of cooperative federalism,” she said.

Eyre said Saskatchewan will act as an intervener and supporter in Newfoundland and Labrador’s court action against the federal Liberal government.

Eyre said the equalization program does not factor in the diverse geographical layout and energy needs of the province.

The Moe government has repeatedly singled out Quebec as the single biggest beneficiary of equalization payments, saying the province receives billions while Saskatchewan gets nothing.

In 2018, Saskatchewan criticized the fact that in equalization calculations, hydroelectricity generated in other provinces wasn’t counted as “natural resource revenue” — while Saskatchewan’s oil, gas, potash and uranium was.

“There are crucial fundamental exceptions in the [formula] — for example, of Quebec’s hydro, which is simply unfair,” Eyre said.

Sask. Party has ‘zero credibility’ on equalization: NDP

NDP finance critic Trent Wotherspoon criticized the Sask. Party government for dropping the 2007 lawsuit, which he said would have delivered “fiscal fairness for Saskatchewan people 16 years ago” and improved the province’s fiscal position.

“The Sask. Party just has zero credibility. It’s been all hypocrisy, no delivery when it comes to equalization and a fair deal for Saskatchewan,” he said.

With a provincial election coming up this year, Wotherspoon said an NDP government would be prepared to launch a lawsuit.

“Saskatchewan people deserve more than just being a sidebar to someone else’s case. We should be leaders, and we were leaders,” he said.