Equalization not working for Newfoundland and Labrador, says finance minister

Newfoundland and Labrador's finance minister says the province should get a better equalization deal from the federal government.

"When you see other provinces with a smaller geography and a much larger population and are receiving a large portion of equalization payments, I challenge anybody to explain to me how Newfoundland and Labrador is still considered a 'have' province," Tom Osborne told CBC's Here and Now on Tuesday evening.

Osborne said Newfoundland and Labrador loses out because it's heavily revenue-based, including income from natural resources.

Asked if provincial spending is a bigger issue affecting the province's economy, Osborne who was a member of the former Progressive Conservative government before joining the Liberals in 2013 said spending had to come up to bring programs and services to a national standard.

"We're now at a national standard," he said. "We've got an aging population, which makes it more expensive to service; as you get older, your health-care costs increase. We have areas of the province that the population is declining rapidly we still have to maintain services in those areas, and with inflation, the cost of servicing the province and providing services continues to increase."

Overspending a problem, Osborne admits

It's difficult for the provincial government to cut too much without bringing services down below the national standard, said Osborne.

"Overspending is a problem, but we still need, and Newfoundlanders and Labradorians deserve, a comparable level of service," he said.

Osborne pointed to Nova Scotia, a province with twice the population in a province one-third the size of the island of Newfoundland, receiving $1.8 billion for 2017-18, while Newfoundland and Labrador does not qualify.

"The reality is the Constitution, we're not living up to, because that guarantees a comparable level of services at a comparable level of taxation," he said. "It's simply not the case in Newfoundland and Labrador."