Finance Minister Jim Flaherty has billed it as a "historic plan" which fixes the so-called fiscal imbalance between the provinces and the federal government. But not all the provinces seem quite as sure that the new federal budget fixes the problem.

Delivered Monday, the budget includes $39.4-billion in transfers to the provinces over seven years to cover equalization, post-secondary education, infrastructure and climate change. That's aimed at diffusing the provinces' protests over Ottawa's embarassment of riches while they continue to struggle financially. The equalization transfers, in particular, were tailor-made to each province, effectively creating four separate formulas out of what used to be a single one.

"The long, tiring, unproductive era of bickering between the provincial and federal governments is over," Flaherty said Monday.

But Saskatchewan, Nova Scotia and Newfoundland and Labrador are saying the revised equalization formulas are a betrayal after Stephen Harper promised during the 2005-06 election campaign to keep resource revenues out of the equalization program.

"What they've done today basically is completely shafted us," Newfoundland and Labrador Premier Dany Williams said. "It's scandalous when you think of it, what they've done to us."

Under Harper's original plan, Saskatchewan would have received $800-million in transfer payments. Under the revised formula, the province gets $226-million - leaving its premier, Lorne Calvert, to suggest voters in his province may turn a cold shoulder to the Tories come election time.

"I sense that this prime minister takes for granted the political support he has in the West and in Saskatchewan," Calvert said. "And that is a very unwise thing to do."

B.C. Revenue Minister Rick Thorpe said the budget's fiscal imbalance focus is "more about politics in Quebec and Central Canada than it is about strategic importance for British Columbia and Canada."

Ontario Finance Minister Greg Sorbara, on the other hand, was pleased Ottawa had heeded the vote-rich province's call for a revised system to ensure the country's wealthier provinces get a full share of social transfers. Although Flaherty would only commit to enacting legislation that would ensure per-capita transfers for health after 2014, he did pledge $700-million to both Alberta and Ontario to make up for any current shortfall.

"We made real progress and we're pleased with that progress," Sorbara said.

Meanwhile, party leaders in Quebec - in the stretch run of a provincial election campaign - are bickering over who should take the credit for its sudden cash windfall from Ottawa. Monday's budget allocates an extra $2.3-billion to Quebec, although much of it had already been announced.

"This gives us a lot of satisfaction in the sense that we have fought for this for a number of years," Premier Jean Charest said. "Now the federal government has moved substantially and Quebecers should be proud of the leadership we've exercised within the federation to accomplish this."

But Parti Québécois leader André Boisclair said Quebecers shouldn't be duped into accepting a short-term fix for a long-term problem. The federal government's attempts at appeasing of Quebec, according to Boisclair, are "not complete, not entirely sufficient.

"We have here a partial monetary solution," the PQ leader said, "but we have no strong fiscal solution."

Action Démocratique du Québec leader Mario Dumont cautioned the budget would not bring an "end [to] all discussions between governments about the issue of fiscal relations.

"But it's a very, very important step."

With files from Canadian Press

Print Article    Send to a Friend    Write a letter to the editor

Digg this Stumble It!   Post to del.icio.us Seed Newsvine   Share on Facebook Technorati links