Provincial-Territorial Meeting of Ministers of Finance

FREDERICTON, New Brunswick, February 13, 1998 -- Provincial/Territorial Finance Ministers met in Fredericton today to finalize their reviews of federal/provincial financial arrangements and discuss possible future directions. Ministers have completed much of the agenda charged to them by Premiers at last year's Annual Premiers' Conference (APC) in St. Andrews, New Brunswick. Quebec's Finance Minister did not attend the meeting and, accordingly, this communiqué does not present the position of the government of Quebec.

Ministers have completed five papers which will be forwarded to Saskatchewan Premier Roy Romanow, Chair of the APC. They include reviews of federal-provincial financial arrangements for social programs, Equalization, Employment Insurance, infrastructure and discriminatory tax policies.

New Brunswick Finance Minister Edmond Blanchard, Chair of the Provincial/Territorial Finance Ministers Committee, said the meetings were productive.

"Today's meeting marks a significant accomplishment," said Blanchard "All provinces and territories in attendance put aside differences in opinion, and reached a consensus on the issues at hand. The papers on which we have reached a consensus examine the issues and options for the redesign of fiscal federalism and provide a historical and factual perspective. Our next step will be to consider recommendations on options to redesign fiscal arrangements."

In previous statements provincial/territorial finance ministers stressed that provincial/territorial priorities are existing health, education and other social programs and that any federal fiscal flexibility should not be used to fund new federal programs, but rather to restore federal funding that supports those existing programs. It was also stressed that it is important that current federal/provincial financial arrangements be improved so that those priorities are addressed.

Provincial-territorial finance ministers called on the federal government to restore funding for health, education and other social programs as Canadians have indicated they share these priorities. Ministers noted that between 1994-95 and 1998-99, federal cash transfers to provinces for these essential programs will fall by $6.8 billion, or 35 per cent.

"In light of the potential federal fiscal dividend, we want to be prepared to bring reasonable and equitable suggestions to the table in discussions with the federal government," Blanchard said. "Our partnership with the federal government should focus on making decisions which will best serve people across the country. Over the past number of years cuts in federal funding have forced provinces to trim their budgets affecting key social programs. If there is a fiscal dividend forthcoming, it belongs to the Canadian people and the programs they believe are most important."

The ministers reaffirmed their earlier consensus from the December 9, 1997 meeting, that an Employment Insurance premium rate of $2.20 should be the objective, and that a reduction in premiums should not lead to a reduction in benefits.

Blanchard commented that Finance Ministers strongly believe the provinces are in the best position to deliver those programs most effectively and efficiently. "If the federal government has, as it has said, the fiscal instruments, the provinces know best how to use them, particularly in areas of provincial jurisdiction, and more specifically in health, education and other social programs."

"That being said, there is another important point to be made. The provincial/territorial finance ministers here today are seeking a positive and productive dialogue with the federal government. We have done some excellent work and we want to share that work with our federal colleague. Ultimately, the objective is to find fair and equitable solutions to the challenge of funding essential programs."

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For more information, please contact:

Stephen Heckbert
Communications Officer
New Brunswick Department of Finance
(506) 453-2451