Provincial-Territorial Meeting of Ministers of Finance
NEWS RELEASE
MONTRÉAL, June 14, 2001 --Provincial-Territorial Finance Ministers met to advance their work on fiscal arrangements in response to direction by Premiers at the 2000 Annual Premiers' Conference. They will be reporting to Premiers at the 2001 Annual Premiers' Conference.
Ministers pointed out that provinces and territories have to bear the brunt of cost pressures in social programming. This is proving to be an increasingly difficult challenge, particularly with regard to health care. Ministers agreed fiscal responsibility is key to providing sustainable programs for Canada's future generations.
Ministers issued an urgent call to the federal government to revitalize the federal-provincial relationship by funding an increased and more equitable share of the vital social programs like health care and education, which the provinces have the constitutional responsibility to provide. Ministers noted that the Premiers had called for a strengthening of Equalization in concert with the renewed federal commitment to funding these programs. In this context, Ministers agreed on the following package of solutions:
- Ministers called on the federal government to make at least the same commitment to this vital social programming as it provided in 1994/95. In that year the federal government provided 18 percent of these costs; in the current year it is funding under 14 percent. This share is set to decline further. The federal government is now realizing continuing multi-billion dollar surpluses. It clearly has the means but has not shown the will to fund these programs on a long term, sustainable basis. Ministers released an update of the background paper A Federation Out of Balance originally presented at the 2000 Annual Premiers' Conference.
Finance Ministers stressed that Canadians cannot wait 18 months until Commissioner Romanow presents his report to the Prime Minister. The health care system requires urgent and immediate attention towards a more equal sharing of increasing costs.
- Ministers noted that the needed changes could be achieved in a number of ways, including a CHST escalator that would increase the federal share of growing provincial and territorial social programming costs, or a tax point transfer. Finance Ministers will present options to the 2001 Annual Premiers' Conference.
- Ministers also reiterated the Premiers' call for a strengthened Equalization program including an immediate and permanent removal of the ceiling. The provinces and territories noted that under the Constitution, the Equalization Program is intended to ensure all provinces can provide reasonably comparable levels of services at reasonably comparable levels of taxation. The federal government's imposition of the ceiling on Equalization entitlements and other unilateral moves, such as reduced revenue coverage, have severely limited the programs' ability to meet this goal.
Ministers, with the exception of Quebec which administers its own tax system, also noted their ongoing concern respecting the impasse in negotiating new tax collection agreements with the federal government. Ministers called upon the federal government to negotiate agreements that respect the joint federal and provincial/territorial responsibility for income tax.
To bring about a renewed working relationship with the federal government, the Finance Ministers called for regular semi-annual meetings of Federal, Provincial and Territorial Finance Ministers and Deputy Ministers - starting this fall.