The Government of Newfoundland and Labrador has filed its statement of claim in the Supreme Court of Newfoundland and Labrador (General Division) challenging the constitutionality of the Government of Canada’s equalization program. The statement of claim was filed on Friday, June 21.

The statement of claim outlines how the Government of Canada’s equalization program does not achieve its constitutional purpose. The program unreasonably and unfairly penalizes Newfoundland and Labrador by failing to transfer sufficient funds which are needed to ensure that residents benefit from levels of public services that are reasonably comparable to those in other provinces.

Relief being sought from the court involves declaring elements of the equalization program as unconstitutional, including:

• The absence of including the costs of providing public services when calculating equalization payments.
• The fiscal capacity cap.
• The inequitable distribution of excess equalization program funding.
• The gross domestic product growth ceiling.

The statement of claim can be viewed here.

Equalization is a federal program enshrined in section 36(2) of the Constitution Act, 1982, under which Canada transfers funds to provinces to address fiscal disparities. It is intended to ensure provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

Quotes
“This statement of claim presents our arguments regarding unconstitutional aspects of the equalization program and what can be done to remedy this unfair situation that penalizes Newfoundland and Labrador. We look forward to the upcoming court process and the opportunity to improve a program that does not accord with basic principles enshrined in the Canadian Constitution.”
Honourable John Hogan, KC
Minister of Justice and Public Safety and Attorney General

“This challenge is all about ensuring that equalization achieves what is intended in the Constitution – to ensure fairness among all provinces within Canada relating to the cost of delivering public services. From our perspective, the Government of Canada’s equalization program is insufficient in that it does not consider the cost of delivering services in a province such as ours with a geographically dispersed population; nor does it consider the inequity caused by including 100 per cent of our natural resource revenue in the formula. We want the equalization program to treat provinces equitably.”
Honourable Siobhan Coady
Deputy Premier and Minister of Finance

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Learn more
Government of Newfoundland and Labrador to Launch Challenge of Federal Equalization Program

Government of Newfoundland and Labrador Equalization Correspondence

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