February 14, 2005 St. John's, Newfoundland and Labrador The Governments of Canada and Newfoundland and Labrador today signed the arrangement that will assist the province in becoming the principal beneficiary of its offshore resource revenues. The Arrangement between the Government of Canada and the Government of Newfoundland and Labrador on Offshore Revenues reflects the Agreement in Principle reached between both governments on January 28, 2005. Prime Minister Paul Martin, Premier Danny Williams, R. John Efford, Minister of Natural Resources Canada, and Loyola Sullivan, Minister of Finance and President of Treasury Board for Newfoundland and Labrador, participated in the signing ceremony for their respective governments. "I made a promise to the people of Newfoundland and Labrador, and I was determined to make good on that promise. Today, I am delighted to do just that," said Prime Minister Paul Martin. "This agreement presents a remarkable opportunity for the people of this province to seize their potential and build for themselves and for their children a more prosperous future." "We celebrate today a better deal on the Atlantic Accord for Newfoundland and Labrador," said Premier Williams. "This new arrangement to share our offshore resource revenues is another step forward to secure a future of self-reliance and prosperity for Newfoundlanders and Labradorians. We will optimize opportunities and realize our true potential with a great sense of renewed pride." The Arrangement gives Newfoundland and Labrador 100 per cent protection from equalization reductions or "clawbacks" for eight years as long as the province receives equalization payments. In addition, the Arrangement provides for a further eight-year extension as long as the province is an equalization receiving province in 2010-11 or 2011-12, and that its per capita debt- servicing costs have not become lower than that of at least four other provinces. The province will receive an up-front payment of $2 billion which equals about three-quarters of the agreed-upon estimate of potential benefits from this agreement between now and 2012. This payment will serve as a pre-payment of the new 100 per cent protection. "With 100 per cent of the province's offshore benefits delivered through this new deal, the people of Newfoundland and Labrador have a golden opportunity to move forward economically," said R. John Efford, Minister of Natural Resources Canada and Regional Minister for Newfoundland and Labrador. "I anxiously await the day that Newfoundland and Labrador earns its way out of equalization, and this agreement points us in that direction." "Becoming the principal beneficiary of our province's rich offshore resources is an integral component in achieving sustainable financial health in Newfoundland and Labrador," said Loyola Sullivan, Minister of Finance and President of Treasury Board. "With this new arrangement for offshore resource revenues, we now have an important new tool to enable us to diversify our economy and lay the groundwork for financial stability." No amendments to the Canada-Newfoundland Atlantic Accord or Equalization legislation will be required. Payments under the offshore revenue arrangement will be made separately from the Atlantic Accord and the new Equalization-Territorial Formula Financing framework. The Canada-Newfoundland Atlantic Accord was signed 20 years ago on February 11, 1985. -30- For further information: Office of the Premier Government of Newfoundland and Labrador 709) 729-3960 or (709) 690-5500 PMO Press Office: (613) 957-5555
