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2012 Letter, Auditor General of Nova Scotia

February 4th, 2013 No comments

2012 Letter to Auditor General of Nova Scotia


Nova Scotians for Equalization Fairness, N.S.E.F., has twice requested you to investigate where over 99% of federal equalization transfers to the Province of Nova Scotia was and is being spent. No action has so far been initiated by you.

There has been no evidence of requests from Nova Scotia MLAs, excepting an op-ed from Mla Geoff MacLellan suggesting an audit, but this isn’t surprising because the political parties in power prior to the present one were complicit in redirecting this funding and capping the amount directed to municipalities and towns.

In 2009/2010 the government’s own figures show that from the $1,571,000,000 transferred by the federal government for equalization a total of $32,050,000 was distributed to eligible towns and municipalities. The actual amount from the federal transfer was $13,500,000, the remaining $18,550,000 (total Foundation Grants of $1,550,000 and $17,000,000 of the total Grants of Entitlement) being wholly supplemented from Nova Scotia Power Inc. Grant-In-Lieu-Of- Taxes.

The use of N.S.P.I. Grant-In-Lieu-Of-Taxes is a separate issue of contention. In 2010 the GILT paid to the Nova Scotia Government was $40,100,000. Since all revenue received is placed in the consolidated fund (General Revenue), it can be argued that the government can comprise its provincial equalization program of $32,050,000 entirely from the NS Power Inc. GILT.  And because the Cape Breton Regional Municipality has 28 percent of the NSPI commercial assets in its municipality, which should mean $11,228,000 represents municipal property taxes, if treated like other commercial assessments.  This would also mean the CBRM actually receives only about $5 million from the the provincial equalization program and not the approximately $16 million the provincial government states.

In 2010/2011 the actual amount distributed from the $1,337,000,000 federal transfer was again only $13,500,000 and In 2011/2012 the same amount was distributed from the federal transfer of $1,344,000.000

From a total $4,250,000,000 federal equalization transfers for these three years only $40,500,000 has been distributed by provincial governments from the federal government transfers. The loss of $4,209,500,000 that creates financial hardship and inequalities in taxation and services for towns, municipalities and citizens demand correction in practice of directing funds.

Regarding the rulings on the CBRM’s constitutional challenge, the courts have not ruled on the merits of the constitutional case but only ruled that the CBRM did not have standing before the court to raise these matters.  A procedural dismissal by the courts merely allows this injustice to fester because only some Nova Scotians are beneficiaries under the terms of section 36 of the Constitution Act, 1982.  That is not what the constitution intended!  Therefore, our committee feels it is incumbent upon you as the accountability gatekeeper for the citizens to account for on what and where these equalization payments were spent after being received by the provincial government.


We ask once again that you initiate an audit to determine where this amount has been spent and we would suggest a meeting between you and our representative where we can provide greater details of the basis for our remarks.

Yours truly,

Rene Halden, Correspondence Secretary, Nova Scotians for Equalization Fairness.


(1)   Equalization Calculations based on Service Nova Scotia and Municipal Relations 2009/2010, 2010/2011, and 2011/2012 figures.

(2)   Service Nova Scotia and Municipal Relations “Helping Municipalities Cope with NSPI Reassessment”.

Cc. Premier and all Mlas

Read reply from the Auditor General here.

Categories: Government Correspondence Tags:

Federal Finance Department Allocates 26%

January 30th, 2013 No comments

Federal Finance Department Allocates 26% of Equalization.

                Recently it was learned that the federal Finance Department allocates approximately 26% of the Nova Scotia payment in 2012-2013 due to the province’s relative weakness in property tax fiscal capacity.

The province does not collect property taxes. The Municipal Act, 1998, c 18, s.72 authorizes municipal councils to estimate, levy and collect commercial, residential, and resource property taxes. It follows that the 26% allotment is therefore for municipalities according to the provincial formulars that are in force, and that the remaining 74 % is distributed by the province at its discretion, but nevertheless for the purpose stated in the Constitution Act, 1982.

The 2005 Offshore Accord payments from the federal government to Nova Scotia is for a limited period and provides 100% protection from Equalization reductions resulting from the inclusion of offshore resource revenues in the equalization program. Therefore the 2005 Accord payments must be included in equalization and should also be used at the discretion of the provincial government for the same purpose.

The provincial is distributing about 4.09% of the allocated amount from equalization and increasing its total distribution from other sources that it legislated earlier in the program. The 2005 Offshore Accord payment is not included or distributed. The point being made is that about 95.9% of the equalization payment plus the Accord amount goes into general revenues. The details and amounts are described in “Facts on Equalization in Nova Scotia Revised January 25, 2013”, and the “2012-2013 Equalization Grant Revised January 18, 2013”.


There are questions concerning actions that have been taken by NSEF and the government, the ruling of the Supreme Court of Nova Scotia regarding CBRM’s suit against the government of Nova Scotia and the effect of the federal 26% allocation to Nova Scotia and many others. The answers to these and others that may be forthcoming will be answered on the FAQ (Frequently Answered Questions) in the tool bar at the right top of the Home Page.

Categories: Information Tags:

Facts on Equalization in Nova Scotia, January 25, 2013

January 29th, 2013 No comments

Facts on Equalization in Nova Scotia January 25, 2013

                Confirmation has been received from the Finance Department Canada that approximately 26% of the federal Equalization transfer for 2012-2013 to Nova Scotia is allocated due to the province’s relative weakness in property tax fiscal capacity. Since the Municipal Government Act, SNS, 1998 c18 states that councils are authorized to collect residential and commercial taxes for municipalities, and because the provincial government doesn’t collect municipal taxes it is evident that the relative weakness in property tax fiscal capacity applies to transfers to municipalities, and that 26% of the federal transfer is allocated toward municipalities.

At this time we are informed that this applies to the 2012-2013 Equalization transfer of $1,268 million and excludes the 2005 Accord amount of $443 million. We have therefore replaced the FAQ 0f September 29, 2012 with this revision.

The Nova Scotia Offshore Accord is an arrangement reached between the government of Canada and Nova Scotia on February 14, 2005 that, for a time-limited period, provides 100% protection from Equalization reductions resulting from the inclusion of offshore revenues as source revenues. It is therefore a part of federal equalization transfers to the province. Federal Support for Nova Scotia 2005 to 2014 is listed below for the periods from 2009 to 2013. (In millions)

                            2009/2010      2010/2011                   2011/2012       2012/2013                                                                                                                                                                                                                                          

Fed. Amts.         1,391                     1,110                                    1,167                     1,268

2005 Accord       180                       227                                        250                         443

Totals                   1,571                   1,337                                     1,417                      1,711

The 2012-2013 Equalization Grant Revised January 18, 2013 is a compilation from Services Nova Scotia and Municipal Relations published Municipal Indicators with an added column by N.S.E.F comparing provincial government’s distributions with the Federal Allocation of 26%.

The provincial government distributed $32.05 million for each period under the Grant of 50.22% column.

The total of the Foundation Grant of $1.55 million, and $17 million of the total Grant 50.22 % of Entitlement is funded from Nova Scotia Power Inc. Grant-In-Lieu-Of-Taxes  (NSPI-Q&A) so that only $13.5 million is from the .federal transfer for each period. The remainder of the federal equalization is transferred to General Revenues.

N.S.E.F. previously used a factor (derived from annual operating expenditures of municipalities of approximately 14% of combined provincial and municipal expenditures for providing public services) to calculate a Fairness Grant for each eligible municipality and town based on the total of the Equalization and the Offshore Accord transfers.

With the federal allocation of 26% of $1,268 million, the factor by which the present provincial Grant of 50.22% of $30.5 million must be multiplied is about 10.81; therefore the federal allocation of 26% would require that the total Grant of 50.22% should be about $329.7 million.The factor of 10.81 is derived by dividing 26% of the federal equalization by the Grant of 50.22% ($30.5 million), and the Federal Allocation of 26% is the government’s Grant of 50.22% for each municipality multiplied by 10.81.

The government is currently placing $1,254. 50 million from federal equalization plus $443 million from the 2005 Accord transfer into general revenues. If it distributed the full allocated total it would still have $1,381 million to distribute at its discretion.

The caps (percentage) on the Grants that were legislated very early in the provincial equalization program , we believe violate the explicit purpose of the Constitution Act, 1982 and need to be rescinded allowing those funds to be distributed to municipalities and towns that host NSPC facilities. The federal allocation of 26% for municipalities is also being violated and transferring federal equalization transfers into General Revenues where they can be used for political purposes also violates the Constitution Act, 1982.

Categories: Information Tags:

Nova Scotians’ Constitutional Right to Equalization

November 10th, 2012 No comments

Categories: Letters to the Editor Tags:

Post editorials fail to take clear-cut positions on community’s behalf

September 30th, 2012 No comments

Post Edtiorial fail to take clear-cut positions on communitys behalf

Categories: Letters to the Editor Tags:

The Supreme Law is being violated wilfully and openly

September 30th, 2012 No comments

Printed in Inverness Oran September 5, 2012

The Supreme Law Is Being Violated Wilfully and Openly


Dear Editor:


On rare occasions, words spoken by politicians when free from any inhibitions can expose hypocritical behaviour later under changed circumstances.  These words, recorded in provincial Hansard, were spoken freely and with a truthfulness of the existing reality free from any encumbrances or thoughts of ever being in a position of governing this province.  In 2005, any prospect of the NDP forming the government was more a reflection akin to wishing the impossible.

Consequently, on Thursday, May 5, 2005, during Oral Question Period, Assembly 59, Session 1, while in Opposition NDP leader Darrell Dexter gave notice that on a future day he would move the adoption of Resolution No. 3695 dealing with the provincial equalization formula which reads: “whereas the Union of Nova Scotia Municipalities has released a landmark report entitled: A Question of Balance: An Assessment of the State of Local Government in Nova Scotia; and Whereas the report concludes that because the province only equalizes to a standard of 40 per cent of normal expenditures, it does not enable municipalities to provide reasonably comparable services at reasonably comparable tax rates”…he further resolved that the province, “close the widening gap in ability to pay for basic local services.”

While in opposition on October 13, 2005, Darrell Dexter repeated his call for equalization reform with Resolution 4468: “Therefore be it resolved that this House encourage the government to use the UNSM reports as the basis for negotiating a new municipal equalization formula and new standards for local services so that Nova Scotians do not suffer unduly high taxes or unduly poor local services.”  Again, on November 3rd, 2008, Darrell Dexter introduced Resolution 4488, “Whereas equalization was confirmed when a previous generation of leaders added to the Constitution, stating that each province should be enabled to provide equivalent services.”

MLA Frank Corbett now deputy premier, too, was previously forcefully vocal on May 5th, 2005, with the following comments: “The report says that Nova Scotia’s equalization program has been compromised due to chronic underfunding.  “This chronic underfunding is crippling areas like the CBRM.”  “Indeed, when you look at the NSPI property tax shortfall for CBRM alone, it is almost $7 million per year.

“We know that in the next 20 years we will lose over 40,000 people off Cape Breton Island in spite of the best efforts of these hard working people to turn that economy around.  So my question through you, Mr. Speaker, is to the Premier.  Mr Premier, the real measure, the real true idea of leadership is to offer an olive branch.  Will you give an olive branch to the leadership at CBRM to sit down and deal with the economic crisis that’s there so we can turn this thing around – will you do that?”

Then Premier John Hamm replied, “There are additional resources being made available to individual municipalities to allow them to provide comparable levels of services right across the province.”  However, no action followed to match his rhetoric.

Today Premier Dexter has shelved his own resolutions and shamelessly continued the practices of past governments while using the wording of Section 36(2) of the Constitution Act, 1982, when rightfully objecting to the federal government’s policy on future health care transfers to the provinces while simultaneously using flawed court decisions that ignore the explicitness of Section 36 of the Constitution Act, 1982.

Recently it was learned that the federal government allocates/provides 26 percent of the total equalization transfer to provinces specifically to enable municipalities unable to generate sufficient property tax revenue to provide services at the national standard.  In 2011-12, that criterion alone provided approximately $349 million from the federal transfer that the provincial government would have to distribute to the eligible municipalities to reach the national standard.

However, the provincial government used only $13.5 million from the total federal equalization ($1,344 million) for its provincial equalization program that is capped at $32,050,000.  The remainder ($18,550,000) of its capped provincial equalization was provided by the grant-in-lieu-of-taxes from the Nova Scotia Power Inc.

This year CBRM received approximately $16 million or about 50 percent of the capped provincial program.  The rest was distributed to the other 41 eligible municipalities.

The almost 99 percent remainder ($1,330,500,000) of the federal equalization payment was put into general revenues.  What happened to the constitutional obligation pursuant to sec. 36 of the Constitution Act, 1982, that specified the purpose for providing this money?  Under what constitutional authority has this diversion into general revenue been sanctioned?  Which government level is ultimately responsible for sanctioning this diversion into general revenues, thereby skirting the constitutional obligation clearly specified?

Sadly, none of the political parties, provincial or federal, have indicated they are going to comply with this constitutional obligation.  Sadly, too, the courts have failed to enforce compliance with the constitution.  Clearly, the supreme law is being violated wilfully and openly.

What, too, has caused such a metamorphosis backwards in the political representation by MLAs and Nova Scotia MPs, particularly our other Cape Breton MLAs: Alfie MacLeod, Manning MacDonald, Gordie Gosse, Eddie Orrell, Keith Bain, and Geoff MacLellan?  Their deafening silence about equalization within this province, even as this area and other parts of this province continues to haemorrhage its young people along with its crumbling infrastructure, is disingenuous and defies rational explanation in any accountable and democratic political system.

This October, communities throughout this province will again select candidates seeking office to municipal government.  Unless these candidates are seriously questioned on their commitment to fight for a community’s constitutional right to reasonably comparable levels of public services at reasonably comparable levels of taxation, this election process will be a meaningless exercise.  And as long as an essentially disenfranchised people continues to robot-like select candidates for municipal, provincial, and federal levels of government who then quietly acquiesce by willingly falling in step with this lack of meaningful political representation and accountability, don’t expect substantive changes to the current discriminatory policies adversely affecting most municipalities in this province.

The hierarchical control exercised by the political parties over each elected member’s freedom to represent his/her riding appears to have successfully placed a muzzle on any discussion outside what each party’s hierarchy sanctions.  Why are taxpayers rewarding this silence with handsome salaries and pensions for MLAs and MPs?  When “elected representatives” prioritize their duty to a political party’s agenda above that to the people who directly hired them, it’s time the people demanded changes to this political system to make it more accountable and transparent to each taxpayer.

Without such reform to the political system, it will take Danny Williams-type politicians who are independently wealthy and ready to fight without any reservations for the rights of constituents.  Unfortunately, these individuals are virtually nonexistent.


Yours truly,


Charles W. Sampson

Sydney Forks

Categories: Letters to the Editor Tags:

NDP asks supreme court to reject CBRM lawsuit

September 3rd, 2009 No comments

The Cape Breton Post
SYDNEY — Nova Scotia’s new NDP government has asked the Supreme Court of Canada to reject an appeal by Cape Breton Regional Municipality, which claims it is entitled to more equalization dollars.
In July, the CBRM filed an application to have its case heard in the top court.
In response, a lawyer for the Nova Scotia Department of Justice filed the province’s defence last week seeking dismissal of the appeal.
The province argues the municipality lacks a sufficient foundation to advance a constitutional claim in Canada’s highest court.
Shawn Fuller, spokesperson for Premier Darrell Dexter, said Wednesday evening the NDP Leader was made aware of the defence filing.
He said it doesn’t stop the province from seeking to negotiate equalization with municipalities.
“We support the filing of a defence,” said Fuller. “This is a process that’s required to go through when matters are before court, but it does not in any way dampen our willingness, and preference frankly, to negotiate a solution that’s satisfactory to CBRM and other municipalities.”
Fuller said no meetings have been set to discuss equalization, noting the NDP have only been in office for about 90 days.
CBRM Mayor John Morgan said the municipality will file a response to the province’s defence this week.
He said the lawsuit is not the only way to settle municipal equalization distribution, but said higher taxes and fewer services in the CBRM compared to Halifax must be addressed.
“The region will continue to depopulate and cease to exist as an urban centre unless there’s fundamental changes to the region,” said Morgan.
The municipality argues that under Sec. 36 of the Constitution Act, the province has an obligation to provide a reasonably comparable level of service to residents for comparable taxation, and that the province has underfunded CBRM by $20 million a year, dating back to municipal amalgamation in 1995.
To date there has been no precedent set on the argument under Sec. 36 in the Supreme Court of Canada.
Morgan said rulings in the Nova Scotia Supreme Court and the Nova Scotia Court of Appeal, though they went against the CBRM, were also inconsistent on issues of justiciability and whether or not a municipality can pursue a claim on behalf of its residents.
“At the lower court level, the court said that CBRM had standing but it wasn’t justiciable… the Court of Appeal arrived at the exact opposite conclusion on both issues — they said it was justiciable but CBRM doesn’t have standing,” said Morgan.
“The thing that I think is critical to keep in mind here is we ought not to be dependent on the courts to have our own provincial government treat us with fairness,” he said.
Morgan said it’s unclear whether the Department of Justice is acting on behalf of Dexter or if they are continuing to follow the former Progressive Conservative policy.
He also said the province’s response is inconsistent with a principle of fairness Dexter endorsed in his election campaign.

Categories: In The News Tags:

Unfair equalization a major factor in region’s decline

August 28th, 2009 No comments

The Cape Breton Regional Municipality’s Integrated Community Sustainability Plan documents the vast range of expenditures that municipalities make in providing their services. The definition of standard expenditures contained in the Municipal Grants Act covers only a fraction of actual municipal expenditures each year.

If the provincial government, however, was fully funding the services provided by municipalities under an adequate equalization program, the municipal grants would have to be at least three times their current levels.
For example, the report cites the year 2006-07 where Class 1 standard expenditures were funded $303,810,320 when the actual expenditures by municipalities were $924,772,582 (pp.72-3)

Meanwhile, the deafening roar of silence from local MLAs and MPs of all parties continues while CBRM residents are paying approximately $18 million more in property taxes than comparable properties in the Halifax Regional Municipality.

When, for example, a resident in Sydney in 2008-09, with a property assessed at $100,000, pays about $882 more annually than the equivalent-assessed property in HRM, where were the outcries of unfairness from your MLAs?

This unfair equalization policy of the provincial government, supported by all provincial political parties and aided and abetted by the federal government’s Pontius Pilot stance of annually washing its hands of its responsibility, has been a major factor to CBRM’s economic decline.

Due to this government policy, the resultant gloomy economic future depicted in CBRM’s sustainability plan has CBRM officials calling for the people to seriously consider a political restructuring so that decisions affecting their economic survival will be in their own hands. “This process would culminate in a plebiscite on the creation of a regional government with broad responsibility for the delivery of all provincial and municipal services in the region.” (p. 140).

The newly elected provincial government, however, has an opportunity to comply with Section 36 of the Constitution Act of 1982 in its coming fall budget. If it fails to do so, the residents will have to seriously proceed with the recommendation in the sustainability report to democratically demand control over their own self-determination.

Charles W. Sampson
Sydney Forks
Nova Scotians for Equalization Fairness

Categories: Letters to the Editor Tags:

Citizens group bringing attention to differences in tax rates – Cape Breton Post – Aug 27

August 28th, 2009 No comments

Protest Sign - Cape Breton Post - Front Page - Carl MacIntyre - Aug 27

Citizens group bringing attention to tax differences - Cape Breton Post - Aug 27

Categories: In The News Tags:

Wanted: CBRM Councillors

August 28th, 2009 No comments
Categories: Letters to the Editor Tags: