REGINA - The Saskatchewan government is fixing for a showdown with Ottawa after Premier Lorne Calvert asked the province's highest court whether the federal Conservatives' changes to the equalization transfer program violate the country's founding principles.
Prime Minister Stephen Harper dismissed Saskatchewan's court action as a political ploy -- a provincial election is expected to be called any time -- that will cost taxpayers a lot of money and won't work. But the NDP premier was undeterred by Harper's rebuke.
"It was this prime minister, you will recall, that stood up in Ottawa and said, `If you don't like us, sue us.' This is the prime minister who said that to Canadians, said it to premiers, said it to the people of Saskatchewan,'' Calvert told reporters in Regina.
"If you think you can bully us or threaten us, I'm sorry. It doesn't work in Canada.''
Court documents filed late Wednesday show that Calvert intends to pose two questions to the Saskatchewan Court of Appeal related to the issue.
The first asks whether the act governing equalization payments denies Saskatchewan ownership of non-renewable resources and interferes with its ability to manage those resources.
The second question centres on whether the equalization program, as amended by the Tories in the last budget, violates the section of the Constitution which outlines the goal of the program: "to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.''
Harper, who was in Winnipeg, predicted Saskatchewan will lose the court case.
"I hope the Saskatchewan NDP is prepared to repay the taxpayers when it loses this case,'' Harper told reporters.
"In my judgment what Saskatchewan needs is a government that will understand that the challenge is to take advantage of that opportunity to become a `have' province permanently, rather than to try and figure out some formula that's going to pay equalization to `have' provinces, because there is no such formula.''
Calvert was quick to shoot back.
"Mr. Harper could be defeated before our lawsuit is,'' Calvert quipped, referring to the possibility of a federal election soon.
The premier's unhappiness with the federal government over equalization is nothing new -- the long-running dispute has included both the current Conservative and former Liberal governments. Calvert argues the way the payments are calculated denies the province millions of dollars a year.
He says that non-renewable resource revenues Saskatchewan gains, including those from oil and natural gas, should not be included in the formula used to calculate equalization payments because the revenues are a one-time gain.
There is no point in developing the industry, the province contends, if it loses a dollar from Ottawa for every dollar it makes on oil.
Nova Scotia and Newfoundland struck a deal, called the Atlantic Accord, with the previous Liberal government that essentially removes offshore oil and gas royalties from the formula.
Calvert has lobbied for the same consideration, and after the last federal budget, indicated the issue could spill into court.
He was angry because, although the Conservatives and their 12 Saskatchewan MPs made an election promise to remove non-renewable resource revenue from the equalization formula, in the budget they put a cap on the amount of money a province can receive under the program.
The province got $226 million in equalization this year and is forecast to get nothing in the years ahead.
There is wide speculation that Calvert could call a provincial election next week.
He has said he likes to have elections on a four-year cycle -- the last was in November 2003 -- and conceded when speaking with reporters Thursday morning that a decision to go to the polls this fall would have to be made this weekend.
The right-leaning Opposition Saskatchewan Party called on Calvert to pursue legal action against Ottawa in 2005, when the Liberals were in power.
At the time, leader Brad Wall said he was told by the Calvert government the case was unwinnable. He said he can support the challenge by Calvert now, but only if there are solid legal reasons behind the decision.
"Pursing a court case that is frivolous, that doesn't give you a chance of winning -- if that is in fact what the premier is doing -- because he is on the eve of an election and wants to make this an election issue, that is not advancing the cause of Saskatchewan in Confederation,'' Wall said.
The federal government will get the chance to intervene in the court action, as will other provinces.
The timeline will be up to the court.
