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Feds to make up for lost equalization payments: MacDonald

The premier says the province won’t be losing money from the Atlantic Accord. You’ll just have to trust him.

The premier says the province won’t be losing money from the Atlantic Accord. You’ll just have to trust him.

Equalization payments to Nova Scotia are down $75 million this year, but Premier Rodney MacDonald said the federal government will make that up with a “transitional payment.”

There’s no written agreement for this payment. Nor was it mentioned in the recent federal budget. But MacDonald said Thursday he had the prime minister’s word that Bluenosers will get the money back.

“I spoke directly to the prime minister himself about this issue,” said MacDonald. “The dollars are there. All of the offshore accord money is protected.”

MacDonald said the two levels of government were working out the details of the agreement. He said he would be able to provide documentation “later this week.”

That didn’t temper the opposition’s scorn.

“I know if I was the federal auditor general, and I was being told by premiers of the provinces that the budget that was being brought down was in fact not the budget, that would be pretty much an indictment of the whole process,” said NDP Leader Darrell Dexter.

When questioned by in Ottawa by Independent MP Bill Casey, federal Finance Minister Jim Flaherty admitted the $75-million payment was only guaranteed for this year. That raised questions about the future of the Atlantic Accord.

“Is the money going to continue to come?” asked Liberal Leader Stephen McNeil. “Are we going to do this every year? Are we going to renegotiate or try to get a different interpretation next fall?”

The extra cash hinges on a deal made in November that the province’s equalization sum wouldn’t be less than it was in 2008. But no such deal is in place for 2010.

Nova Scotia and Manitoba are the only provinces with that agreement. That sparked accusations of a side deal from provinces like Newfoundland, which is losing heavy equalization sums this year.

 
 
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