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Conservatives defend budget from Atlantic premiers' attacks

[PoliticsWatch posted 4:35 p.m. March 20, 2007]

OTTAWA  — The prime minister and one Atlantic Conservative MP spent Tuesday defending the new equalization payments outlined in Monday's federal budget.  
 
On Monday, Finance Minister Jim Flaherty announced all provinces would receive a total of $39.4 billion over seven years to fix the fiscal imbalance. 

Flaherty went as far as to declare that the "long, tiring, unproductive era of bickering between the provincial and federal governments is over." 
 
However, in the 24 hours since budget was unveiled three of the four Atlantic provinces have resumed bickering, including two Progressive Conservative premiers. 

Newfoundland Premier Danny Williams said that the Conservatives have "completely shafted us" by unveiling a new equalization program. 

The premiers have the option to stay in the old equalization system and keep 100 per cent of their resource revenues. Newfound and Nova Scotia negotiated to have their offshore resource revenues excluded in the recent Atlantic Accord. The provinces can also enter the new equalization system and have 50 per cent of their resource revenues included in their equalization calculations. 

"What I'm saying is to the people of this province, based on the fact that they've broken their promise and broken their commitment, (Newfoundlanders) should not vote Conservative in the next federal election," Williams said. 

Prime Minister Stephen Harper dismissed Williams' criticism during question period on Tuesday. 

"I heard what Danny Williams said yesterday, I can tell you, Mr. Speaker, that is completely untrue. There is no cap on the Atlantic Accord. The Atlantic Accord is preserved in this budget."

Another Tory premier, Rodney MacDonald of Nova Scotia, came out against his federal counterparts for the first time since he was elected. 

MacDonald said forcing the provinces to choose between the old and new system is essentially a "roll of the dice."  

"We have some very difficult decisions to make because of this budget," he said. "It's unfortunate, but that's the reality."

In Ottawa, Tory MP Gerald Keddy, who is from Nova Scotia, told reporters he thought the offer was fair.

"You have to understand you can't have it both ways," Keddy said. "This system here allows for Nova Scotia and Newfoundland to look at a new deal within the Confederation or look at their old deal and keep their offshore accord 100 per cent of it and accept the 10-province average."

"I think this is a fair process that's been put forward. The job is for Newfoundland and Nova Scotia to decide where they want to go." 

Even provinces that don't have offshore accords are not happy with the new equalization money. 

New Brunswick Finance Minister Bernie Boudreau said his province would need an additional $156 million a year to fix the fiscal imbalance. 

"If it was to fix the fiscal imbalance as far as New Brunswick is concerned, I wouldn't give (the budget) a passing grade," he said.

While the Conservatives made breakthroughs in Ontario and Quebec in the last election, Atlantic Canada continues to be a problem for them. 

The Tories won just nine of the 32 seats in the four Atlantic provinces in the last election and the party only has three cabinet ministers from the region. 

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> Budget in Brief

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