Equalization Loophole

First of all if anyone can expand on this please do. I caught part of the conversation on VOCM this afternoon when Sue called in to tell Bill Rowe about how Quebec and Quebec companies work together to take advantage of equalization loopholes. Certain revenues which would normally go to Quebec government coffers gets transplanted to other provincial areas which the province has to pay for. For example, Quebec Hydro might put several $100 million into health care initiatives, or infrastructure, etc. So the idea is that a revenue like hydro does not get counted in the equalization formula, and thus, Quebec will have wisely used a technical loophole to get every cent it can out of equalization. Bill and Sue both asked why can't NL do the same. It sounds like there is much potential for our province to replicate what Quebec is doing to retain more of the equalization monies that we would/will eventually not qualify for.
Updated info: Apparantly Greg Byrne of NL-Outside the Box also phoned in to Bill's show earlier, and mentioned this idea he read about. Just wanted to acknowledge this.

Faint Hope in a Time of Distrust

When new political leaders come on the scene and want to build a support base they will often say what they know will please a particular regions palate. Example, Stephen Harper promising a too good to be true deal on equalization, and then avoiding the issue until B Day. While Stéphane Dion is reservedly saying agreeable things so far, which seems to be making a good impression on Premier Williams, he has not actually promised anything. He basically said "I am a man of honour who sticks to commitments." That's fine if you've made a commitment, better if it's in detailed writing, and best if there is some legal obligation to it.

He did say a Liberal government would respect the offshore accord without capping the amount of money East coast provinces can receive in offshore revenue and equalization. The next time a potential Prime Minister makes a commitment/promise in writing, there should be more detail. You can promise things with general wording, and if you have lived up to a small part of that, then you can argue, promise kept. It's like a food item advertising "fat free". One might have thought when these types of phrases first appeared on packaging, that there was a zero fat. Now it can mean 50%, 75% or 20% fat free, plus with other harmful things like a certain amount of trans fats. But still it's not lying to call itself "fat free" because it's true to an extent.

If possible the next time, any "equalization promise" should be legally binding, with clear specifics, especially since it deals with huge amounts of money, and is a politically touchy issue. Why not have Wade Locke-type analyses done by federal and provincial officials based on such detail to give us a more informed picture of what promises will actually entail. If this is not realistic to expect prior to a leader like Dion possibly becoming PM, then we still only have to cross our fingers and hope that the potential new parent of the mother country is trustworthy, objective, and has fair sense of how to treat the family.

Equalization Clarity?

Just over a week after Wade Locke's presentation on the implications of the new equalization formula for NL, a new interpretation has produced drastically lower equalization benefits from the O'Brien version than was originally presented. In fact it is $5¼ billion lower than first thought. When the "Harper Promise/Letter" equalization version was no longer an option, then the O'Brien or 50% inclusion offer sounded like a pretty tidy consolation. But now that's been diminished to a $1 billion lower amount than the status quo equalization scheme NL is on.

Dr. Locke explains that only a couple of hours prior to his April 4 presentation, he was contacted by officials from Finance Canada who contradicted information they had earlier confirmed, in which Locke based his presentation on. It was too late for him to adjust all his figures and thus proceeded with his original interpretation. The timing of this crucial and changed information from officials in the Finance Dept. seems very odd, not to mention shocking. It adds to peoples' skepticism about what to believe from officials and politicians. It's also interesting that no official version has been publicly released from the provincial or federal finance departments, that is, a similiar breakdown as Locke's. Politicians like Hearn and NL Finance minister Tom Marshall, just seem to rely on Wade Locke to give their latest version of events.

Peoples' distrustful image of Stephen Harper will likely harden. Whenever the next federal election campaign begins it's going to be weird to visualize Harper campaigning here in the province (the token visits to St. John's). What will he have to offer? How can he first neutralize the anger he has ignited here over the latest equalization figures, let alone get people excited about any of his policies? Good luck with that Mr. Harper.

Wade Locke's Assessment of Equalization - Implications for NL

Dr. Wade Locke of MUN's Dept. of Economics began crunching numbers shortly after the 2007 budget. Tonight he gave a detailed presentation of three different equalization options. There were many charts and figures which will be posted tomorrow at http://www.mun.ca/arts/.

I will just offer a few pieces of information I took from this. Dr. Locke emphasized that even for him understanding and analyzing how equalization works stretched his skills to the limit. He also stressed that he is just presenting his assessment for public knowledge, and not making any recommendations to people or the government.

There are three equalization options:
(1) Status Quo
(2) O'Brien recommendations/"50% Option" - (50% inclusion of natural resource revenues in the equalization formula, with cap)
(3) The "Harper Letter" (no natural resources 0% included in formula and no cap)

In terms of the economic benefits to Newfoundland and Labrador, the O'Brien option (50% inclusion of natural resources) is an improvement over the status quo.

The 50% option would also allow NL to keep the Atlantic Accord longer than would be possible than under the status quo.

In two (2) years time (2009), NL may not qualify for equalization payments, or the next couple of years following that. There is currently a two year delay in the equalization formula, i.e., we would still get an equalization payment in 2011 but not 2012. That means by 2012 we would be considered a "have" province and not get equalization for 2012. Therefore, after 2012 a new set of equalization rules would have to be applied to NL in that case till 2020.

(Please excuse my lack of detail here but it was challenging to observe, interpret and take accurate notes in the time provided - the next item is where I am unsure of the particular term he used, could have been "natural resource revenue", will have to verify that tomorrow)

Up to 2020


• using the Status Quo formula NL would get $18.5 billion
  
• using the 50% option, with cap, NL would get $22.8 billion
  
• using the "Harper Letter", without cap, NL would get $28.6 billion

Dr. Locke was asked by someone in the audience if he personally had a preference. His suggestion was to stay with the Status Quo for the next two years, and then switch to the 50% (O'Brien) option.

Total revenue from oil alone up to 2029-30 is approximately $18.6 billion

Like a lot of people I'll take much more time to read the details of what Wade Locke presented and form a clearer opinion. However, based on his presentation, my feeling about our options are more positive than before this information. Even without the "Harper Letter" option where a promise was kept, it appears that NL still does much better than the status quo. The Harper Letter option would be best for the province, but if that's not going to happen, the 50% option sounds better than the status quo to this blogger, so far anyway.

Harper Not Taking any Chances

The Harper government certainly wants to ensure that they do not lose more public support. They are taking out radio and newspaper ads Tuesday to say that Ottawa never broke its promise, and that Danny Williams wants a special deal which would be unfair to other provinces. Perhaps the Harper government realizes that the 21 Conservative seats in NL, Sasketchewan and the other Atlantic provinces, can make a difference in getting a majority in the next election. Or, he is trying to dissuade voters in general from voting for Layton and Dion, or he is turning the tables on Danny to paint him and/or Newfoundland and Labrador as greedy and being out of line in his demands. In any case it is an acknowledgement that yes, we do exist. I guess the image as a promise breaker is getting a tad worrisome.

There was a CTV interview with Premier Williams on Saturday in which he said that it was the long term potential benefits to the province that was in question, not the Atlantic Accord as it is. However, the Harper government line is that no promise was broken, which refers to the Atlantic Accord being untouched till 2012, or 2020. But that time frame is not what is in contention - correct me if this is not the case. So if the ads approach is to tell the public that Premier Williams' asserts that an Atlantic Accord promise has been broken, then that would be a misleading advertisement by Harper's government. The Atlantic Accord stays the same at least till 2012, that is not what Williams is arguing against. If the Conservative ads are informing the public this way, it would amount to the same level of honesty the anti-sealing propaganda offers each year, and that is malicious.

Anger at Harper, Justified. Rationalizing Non-Renewable Exclusion for NL, Iffy

No doubt, few will argue that Stephen Harper broke a promise. In doing that, he gave many in Atlantic Canada, Sasketchewan, and the rest of Canada a huge reason not to trust him. As Rex Murphy suggested last week, he has become the type of leader he once despised. The hope that his promise gave to people in Newfoundland and Labrador was shattered and hence people are justifiably angry at him.

The fallout of our Premier protesting with feisty words and ads is no surprise. Any Premier ought to have been angry with Harper over this, and stand up for the province. The message was sent, received, will be repeated in the next election, but it's time to put it to the back burner right now to give full focus to home developments and promises. The Williams government has to obsess on projects that are stalled and dying. In this blogger's opinion, he has good intentions for the long term interests of the province. He's certainly not signing agreements with big oil just to say it was done under his watch. That's good, and bad obviously, but that potential is still there. He has gotten the message through that Harper can't be trusted out there, but needs to move on.

Rationalizing 100% Exclusion of Non-Renewables from Equalization Formula
Harper used several provinces to get elected, 21 seats in Atlantic Canada and Sasketchewan, the margin of his win. He will likely win big in the next election. But if Harper did not win the next election, or if there wasn't a Harper promise to remove non-renewables resources from the equalization formula at all in the first place, could their exclusion be justified on its own merit? And how? Of course there would be little, if any, controversy in NL if he had kept his campaign promise in last Monday's budget. It would have been a great opportunity to pay down the debt sooner, enhance infrastructures in the province, etc. But ultimately our province has to answer why should we be permitted to exclude non-renewables and be exempt from a cap on fiscal capacity. So people will ask, "what makes NL so special?" Some rationale rightly or wrongly might be, for example:

1. In 2005, we had the highest per capita debt load of any province at $23,280 (2005), much higher than the next highest, Nova Scotia, at $13,000 (2005)
Quebec Finance Minister Michel Audet announced last year that Quebec then had the highest per capita debt.

Like the other 7 provinces we do not want to receive equalization continually, but paying of our provincial debt will take generations.

We have to run a surplus of $250 million a year for 48 years just to get to no debt, and Alberta has passed that point. - Loyola Sullivan, 2006

2. NL chronically has the highest unemployment rate in Canada.

3. Significant and continuous outmigration and declining population.

4. Many see excluding non-renewables from the equalization formula as fair compensation for the lack of intervention of the federal government in the 1960's, after Quebec declined Newfoundland's request for a transmission line across Quebec for the Upper Churchill Hydro development. NL MHAs were ultimately responsible for approving the notorious 1969 deal. But in an interview with Cabot Martin, Smallwood said that his request to Lester Pearson to use federal authority to allow a transmission line across Quebec, was rejected before he could formally present the request out of fear it would jeopardize national unity. After 17 years of investigation, negotiations and preliminary development, NL and BRINCO ran out of money, choices and time. Quebec had a geographic advantage and would not budge from their position. Some called it a "revenge of geography" for a decision, decades earlier, of including part of Labrador as part of the province of "Newfoundland". (same source) As a result Quebec gets 96% of the benefits each year (roughly $800 million in 2005, compared to $20 million for NL).

5. Displacement of tens of 1000s of fishery workers resulting from the moratorium on northern cod. While many factors may have contributed to the collapse, one factor is mismanagement of the fishery.

"In our view, the major factor was clearly mismanagement."
- Report of the Standing Committee on Fisheries and Oceans

In any future case where consideration is given to excluding 100% of non-renewables, some good clear rationale will have to be outlined. Non-renewables are finite, but also finite everywhere. If there are more arguments to support NL's case they would have to be compiled at some point.

The Fiscal-Imbalance & Weapons of Mass Destruction - they didn't exist

For years we've heard the term "fiscal imbalance" used continually, especially by Ontario Premier Dalton McGuinty. He claimed that Ontario was getting short-changed in the federal transfers to his province. The sentiment was echoed by Quebec, the federal finance minister and the Prime Minister. Looking back, it is reminiscent of U.S. Secretary of Defense Donald Rumsfeld, and Vice President Dick Cheney, announcing over and over that "the whole world knows Iraq has weapons of mass destruction". It was a repeated sermon done with such conviction, that many felt foolish to question something "so obvious". In a different realm of the economy not war, Canadians were fed the whining "fiscal imbalance" line to make it appear that Ontario and Quebec were losing out in the whole deal. This line played well for Harper. Fix the "fiscal imbalance" in ON and PQ and fix the old minority government status with one stone.

Andrew Coyne writes that the whole thing was a myth. His "The 'Fiscal-Imbalance' Myth" is worth reading. Here are some excerpts from the March 24 article. (emphases are mine)

"It was always a sham, there was never anything to it, it was obvious to anyone who bothered to look. But this was the week when it became impossible to sustain even the pretense.

In essence, there never was a fiscal imbalance, even in the provinces' imaginations. There was Quebec's agenda, unchanging as ever, for more money, dressed up as a systemic federal-provincial thing to enlist the aid of other provinces. There was Ontario's quite different complaint, which was not that Ottawa was stiffing the provinces in general, but that it was being shortchanged relative to the others. And there was the ambition of the newly rich oil-producing provinces, Newfoundland, Nova Scotia and Saskatchewan, to get out from under the equalization clawback.

But the only way to deliver enough booty to Quebec to make a dent in its demands was to give it the lion's share of any increase in transfers, and the only way to do that was to smuggle it in via a "reformed" equalization program: Otherwise it would be too clear to all what was going on. But to deliver to Quebec, you had to include oil revenues in the equalization formula, and to deliver to Newfoundland and the others, you had to exclude them. And while both might have been satisfied simply by expanding the program, that ran you afoul of Ontario. Only two sides of this puzzle could be solved at once, and all of the budget's obfuscations couldn't conceal which two.

But if Charest's federally funded tax dodge did not give the game away, Ontario's budget did. Here's how hard done by Canada's largest province is: In the coming fiscal year, it will receive fully $16.1-billion in funding from Ottawa, or more than one-third of all federal transfers. That's up from $7.8-billion in fiscal 2002, just six years ago. Ontario's share has been rising, not just in absolute terms, but relative to the other provinces.

That at least clears up one puzzle: how the McGuinty government has been able to sustain such extraordinary levels of spending -- a 30% increase in just four years. In popular mythology, it's because Mr. McGuinty took the difficult but necessary step of raising taxes, even after promising he wouldn't. He had to, don't you know, after Mike Harris's heartless, ideological tax cuts had starved the government to the bone. Just one problem with that explanation: Tax revenues were higher under Harris than under Mr. McGuinty.

Look it up. Personal income tax revenues, on average, under the tax-cutting Mr. Harris: 4.3% of GDP. Under the tax-raising Mr. McGuinty: 4.2%. Total own-source revenues -- that is, exclusive of federal transfers -- are roughly the same under the two governments, at around 13% of GDP. Mr. McGuinty's four-year spending spree has been financed, not with his own tax hikes, but with a massive increase in federal transfers -- the very transfers he has spent the last four years complaining about.

Not that this is likely to shut him up, you understand, any more than Mr. Charest. I only say that it should."

21 Seats: Could Harper's PQ Investment Backfire?

Coincidentally, 21 is the margin of the Conservative victory over the Liberals in the 2006 election, and also, the number of Conservative ridings in Sasketchewan, and the Atlantic provinces.

Irritation is apparently growing among western and eastern provinces with the news that Jean Charest is already spending a huge chunk of his $2.2 billion budget windfall to lure voters by a $700 million tax cut.

(From today's National Post)

Keep in mind that this most desperate of premiers governs a province that debt-finances Canada's most unaffordable lifestyle. Yet Mr. Charest diverted the windfall given Quebec in this week's budget to a tax cut worth $750 per average Quebec family, buying votes using Ontario, Alberta and B.C. currency.

The galling spectacle of Mr. Charest stripping $700-million for tax reduction from his $2.2- billion haul just 24 hours after receiving word of the federal handout may well bring back Quebec-bashing as a Canadian heritage sport.

Stephen I'll say or do anything to get elected Harper enticed 12/14 Sasketchewan ridings to vote Conservative based on the promise made to Premier Lorne Calvert to exclude all non-renewable resources from the new equalization formula. He clearly misled Newfoundland and Labrador, and Sasketchewan to get elected. On Monday, he just invested in Quebec in order to form a majority government in the next election. But with Quebec on side, and Ontario for the most part liking this budget, which is what really counts, Harper's chances of shaking minority government status would be much greater. However, if Charest does not win the Quebec election, then there might again be a frenzied atmosphere of a separatist government promoting the Bloc, which will make it tougher for the Conservatives in the next federal election.

Also, Harper's image as a promise-breaker is getting a steady mention in political editorials in Canada.

From his article, "Dishonest Budget", Andrew Coyne had this to say:

The budget claims to have solved “the fiscal imbalance” -- a debatable claim about a debatable problem... Yet the Tories campaigned on a promise to exclude these revenues from the equalization formula, in their entirety.

A broken promise, right? Not according to the budget. Thanks to various add-ons and one-time payments, it claims, no province will be worse off under the 50% inclusion rate than it would be if resources were kept out entirely. This, it says, will “fulfill the Government’s commitment to fully exclude non-renewable natural resources revenues from the calculation of Equalization.” But it didn’t fully exclude them. It half-included them. It might have compensated provinces for breaking its promise, but it still broke the promise.

(from the Prince Albert Daily Herald) Deal, but no Deal

We don't think that promise was kept, and either should the electorate who sent Tories to Ottawa from 12 of our 14 seats. Those votes were cast, in part, on the basis of that commitment, and Monday's federal budget made it clear the assurance was not kept.

The tone of CBC and CTV journalists, especially just after the budget announcement, was, as it often is, snobbish, towards Newfoundland and Labrador. However, to this blogger, it seems to be changing, to one which is more serious about the weaknesses in the budget. This is due in large part to the fact that SK, NS have similiar concerns as NL, and NB and BC have reasons for disliking the budget as well.

It's not like Harper said just once that non-renewables were to be excluded from the new formula, he said it on many occasions, on video and in writing, to NL and SK. He condemned Paul Martin for trying to impose a cap on equalization. However, there was a gradual erosion of his commitment of his promise noted in Jan., 2006 by Premier Calvert, and throughout the rest of last year, so it was no surprise that he offered the 50% inclusion option.

Technically, NL still gets the benefit of the Atlantic Accord till 2012, and possibly another eight years, and in that time frame, a promise kept. But Harper is not deferring his promise/suggestion to exclude 100% of non-renewables, he is changing it on paper.

Danny Williams should, and as he said, will, focus on other economic and provincial issues. As we know there's enormous economic potential for the province, and equalization is no more a crutch for our province than it is for other "have-not" provinces. (see previous post on federal transfers)

Here's more Quebec food for thought

(National Post)

Quebec runs a nation-leading debt of $122-billion, which drains a staggering $7-billion in interest payments from general revenue every year.

The government provides a distinct society of $7 daily daycare, tuition fees a third of the Canadian average, child care allowances that can hit $2,091 a year for the first kid and top-ups for registered education savings plans all wrapped in thick layers of heavily unionized job protection.

Transfer Payments to the Provinces

Do you ever get the feeling that the province of Newfoundland and Labrador is the biggest drain on the Canadian economy? When people hear and see comments from outsiders and insiders that suggest that, then they could start to believe it. People associate "welfare state" or receiving "welfare" with references to our province, and others. The meaning of such terms as we know, is often interpreted to mean someone who is a slack, lazy, conniving and deceitful opportunist. Eight of ten (8/10) provinces are currently receiving equalization payments. See the numbers and per capita amounts below.

From the Federal Department of Finance, these are the Major Federal Transfers to Provinces and Territories.

Equalization Payments ($ millions)
Province	2005-06	2006-07
NL	861	632
PEI	277	291
NS	1,344	1,386
NB	1,348	1,451
PQ	4,798	5,539
MB	1,601	1,709
SK	82	13
BC	590	260
ON	--	--
AB	--	--

Total Health & Social Transfers ($ millions)
Province	2005-06	2006-07
NL	775	778
PE	208	214
NS	1,410	1,445
NB	1,132	1,158
PQ	11,435	11,815
MB	1,769	1,819
SK	1,493	1,523
BC	6,404	6,652
ON	18,889	19,581
AB	4,922	5,198

Estimated Per Capita Transfer ($ )
NL	PE	NS	NB	PQ
2,687	3,428	2,876	3,290	2,181
MB	SK	BC	ON	AB
2,861	1,545	1,619	1,545	1,544

Greyed Expectations

Reports say there will be increases in equalization to the provinces in the budget later today. Finance Minister Jim Flaherty says provinces will see it as a fair resolution to the fiscal imbalance problem, but not all provinces will be happy with it. Hmm, who could that be? The vibe is that the anticipated 50% inclusion of non-renewables will be part of the new principled long-term equalization formula. There are eight "have-not", sometimes seven, BC and/or SK could be "have" provinces again, so the money has to get split. Quebec gets over $5 billion in equalization each year, and may get the biggest share. The budget has some general tax cuts, and an incentive for hybrid car purchasers, but the bump in overall money for the provinces, the government hopes, will take the sting out of the broken promise he made on equalizaton.

The $1 billion he gave to Sasketchewan farmers might have smoothed over the expected budget news for many in SK, but not necessarily Lorne Calvert. Jack Layton has said a few days ago he supported the view that non-renewables should not be part of the new formula. Dion has not said much about this. There doesn't appear much anxiousness for an election. It won't be surprising if all parties support this budget, but the real proof will be in recipe of the pudding.

Equalization: From "Promise" to ComPromise

Alberta paid off its debt several years ago and hence does not receive equalization because it is a rich "have" province. The longer our provincial debt exists the more we pay out to service the interest on the debt. Conversely the quicker we get it paid off, the better the province and ultimately the country benefits. If Stephen Harper stuck to the "promise", or the idea that he supposedly inferred, that all (100%) non-renewable resource revenue would be exempt from the equalization formula, then that would mean billions more for the province. That scenario would be an excellent opportunity to pay down the province's debt more expediently, and get out of the equalization business, albeit still many years away.

Harper's Letter to Danny Williams - quote on non-renewables in the equalization formula:

We will remove non-renewable natural resource revenue from the equalization formula to encourage the development of economic growth in the non-renewable resource sectors across Canada. The Conservative government will ensure that no province is adversely affected from changes to the equalization formula. (Feb. 4, 2006)

That's what he told Williams in writing, it's pretty general and leaves the percentage of non-renewable removal wide open. It does not actually say 100%, but did he mean 100% by verbally expressing that to Danny Williams?

It would appear that Harper has gone from "promise" to compromise. As long as Harper looks pretty in the polls, then he probaly won't budge much from the much talked about, and seemingly expected, 50% of non-renewables, rather than 100%, excluded from the equalization formula. One argument for keeping 100% of non-renewable revenue is that it is a one time only opportunity for that particular resource, e.g., oil and gas. That type of income for the province is finite.

How will the Liberal or NDP's version of equalization compare to Harper's and to Danny Williams' vision of a fair formula? Even if Stéphane Dion made a "promise" to Premier Williams to totally clear non-renewables from equalization, or say 25% inclusion of non-renewables, offer to Danny Williams, which would sound better, then we will still have to ask, "what is a promise?" What does general wording really mean other than wishful thinking? On the other hand, even if we had more detail in writing up front, e.g., "100% of non-renewables will be removed ..", does that matter anyway?

If the province is ultimately stuck with some compromise on equalization, then how about a counter compromise offer? For example, if 50% is the amount, then what if 25% of that were to be mandatorily put towards our provincial debt. That is, in addition to what the province normally pays or should pay, according to income percentages (or at least an average of the last 10 payments, for example). The rule could be that the province has to make its payment towards the debt each year first, then the federally held in trust 25% portion can then be paid towards the debt also.

The net debt per capita for Newfoundland and Labrador, for 2005-06 was $22,733. The debt for the same year was $11.7 billion.

Equalization Promise Not So Promising

If Sasketchewan Premier Lorne Calvert knew PM Harper was coming today he may have baked a wheat cake. Harper announced $1 billion worth of farm aid for Sasketchewan, but as Calvert said later on CTV news, the announcement was hastily arranged and members of his party did not know what was going to be announced. He was disappointed at the way this news was orchestrated, and said, Typically there is some discussion with farmers, and farm groups. He added that he had little detail of where the dollars were going to flow, and warned MPs were going to be held accountable if Harper's equalization promise was not kept.

At the press conference reporters asked Harper about equalization but he had little to say, except that the answer is coming soon. For weeks it's been bandied about that 50% of non-renewables would be removed from the new equalization formula. Sasketchewan has also made it known last year that there might be a political price to pay for reneging on that promise. In August, 2006, Saskatchewan Conservative caucus chair Brian Fitzpatrick wrote that it will cause no end of political difficulty in the next election.

The Sasketchewan Conservatives campaigned on the promise to exempt non-renewables, and they ended up with 12 out of 14 federal seats. It will be interesting to see if Harper has any other surprises in the budget on equalization, and if Danny and Lorne will really attempt to form an east-west political grid.

Fed Money for Toronto Transit: More Tory Seats Down the Road?

Prime Minister Harper made Dalton McGuinty's day on Monday with a $1 Billion cheque for the Toronto GTA transit system, and another half billion for Ontario to help pay for an east-west transmission grid to Manitoba. The grid will allow Ontario to import cleaner electricity from Manitoba, thus help to clean up some of Ontario's worst polluters. This is all good. It must be a nightmare to experience those long clogged commutes into the populous Toronto. It's a big gift from the feds, which probably won't soon be forgotten, at least Harper hopes so. This transaction has a familiar ring - fix up the roads, some time before an election, and get some political payback. The CPC's really need to make some headway in Toronto, no seats in the last election. He'll pick up some seats there next election. That could neutralize the threats of Premier Williams to have the province vote for anyone else if the equalization deal doesn't go his way. But you still can't burn any bridges when you need every seat.