The cost of distrust

The Halifax Daily News reports that the federal government has offered Nova Scotia an equalization buyout which, on paper, would hand the province a billion dollars more than the deal Rodney MacDonald is asking for. But the projected benefits would be entirely dependent on the Cons keeping their promise - and MacDonald seems to have understandably concluded that even a billion-dollar risk premium isn't worth banking on Deceivin' Stephen:

Ottawa has offered Nova Scotia an offshore revenue agreement that's arguably $992-million better than what the province is demanding under the Atlantic Accord, according to a federal source.

Two economists who studied the accord dispute for the Atlantic Provinces Economic Council said Friday that option does seem to be more lucrative than what the province is demanding. But Wade Locke of Memorial University in Newfoundland and Paul Hobson of Acadia University both doubt the federal government could guarantee the terms would remain unchanged for the life of the agreement...

Nova Scotia's demand boils down to full offshore revenue plus O'Brien money, without any clawbacks. According to projections contained in Locke and Hobson's June 13 report, it adds up to $23.999-billion over the life of the accord, which expires in 2019-20.

The federal source said the deal Ottawa offered weeks ago could be worth $24.991-billion, using the same APEC figures. The province was apparently interested, before MP Bill Casey broke ranks with the Conservative Party and voted against the budget...

The problem, according to Locke, is every province that receives equalization might be better off if it was allowed to stay with the old fixed formula. If Nova Scotia gets to choose a richer equalization program than the rest of Canada, Ottawa will be under pressure to give others the same option, or reduce that 3.5% fixed growth rate.

"The issue comes down to a matter of trust that a sworn promise is not going to be violated or a commitment is not going to be changed later on when other people are coming to your door saying hey, what about me?" Locke said.

Of course, the Cons have a well-established track record of broken promises - not to mention efforts to pick fights with anybody who dares to point them out. So it's clear why MacDonald would see his province as better off with an arrangement which minimizes the chances of another Harper reversal.

But if even a Con premier and former Harper supporter is willing to leave that much money on the table out based on Harper's untrustworthiness, it shouldn't be a tough decision for voters to decide that the cost to Canada of Deceivin' Stephen's reputation is far too high to tolerate.