Williams declares 'Newfie joke' over as N.L. stops receiving equalization

23 hours ago

ST. JOHN'S, N.L. �?The "Newfie joke" is over, Premier Danny Williams declared Monday after federal Finance officials confirmed that Newfoundland has stopped receiving equalization payments for the first time in its history.

"This is a very proud day for Newfoundlanders and Labradorians," Williams said at a news conference.

"I don't think the Newfie joke is there anymore. I think we're now an example to our fellow Canadians of how it can be done and how to work your way through hardship."

The sudden turnaround in Newfoundland's financial status is a year earlier than expected and comes as Ontario prepares to receive payments from the federal wealth-sharing program for the first time in its history next year.

Williams compared Ontario's current woes with its manufacturing industry to Newfoundland's struggles in the years after the commercial cod fishery was shut down in 1992.

"What I can say to the people of Ontario is we understand, we sympathize, we know that they're going through a significant downturn in their economy," Williams said.

"But I think we're living proof that you can come out of them and at the end of the day, you can turn it around completely."

The province projected in its spring budget this year that it would collect $18 million in equalization for 2008-09 before getting off the federal program. But its flourishing oil sector combined with Ontario's diminished fiscal capacity buoyed Newfoundland's financial standing.

Newfoundland has been a so-called have-not province since equalization was introduced in 1957. It joins Alberta, Saskatchewan and British Columbia as provinces that don't receive the federal payments.

Williams said the province would not receive equalization for at least the next two years, but acknowledged it would be difficult to forecast beyond that.

It's been the dream of past premiers in Newfoundland to wrestle the province off equalization.

When he announced a deal more than 20 years ago to proceed with Hibernia, the province's first offshore oil project, then-premier Brian Peckford was famously quoted as saying, "One day the sun will shine and have-not will be no more."

As recently as 2001-02, Newfoundland received more than $1 billion in equalization, though the payments have steadily declined since