Finance ministers Peter Christie from Nova Scotia, Mitch Murphy from Prince Edward Island, and Loyola Sullivan from Newfoundland participated in the meeting. Jeannot Volpe from New Brunswick was not available to attend.

Ministers spoke of the importance of equalization to the Atlantic provinces’ ability to provide levels of essential public programs and services that are comparable to those in other provinces. On average, equalization accounts for 19.4 per cent of total Atlantic revenues.

Prime Minister Paul Martin promised a separate meeting on equalization and provincial-territorial finances following the First Ministers’ Meeting on health care in September. In the Oct. 5 federal speech from the throne, the government said it will be making the most fundamental reform of the equalization program in its 47-year history.

Provinces and territories have been told that equalization funding will be increased to $10.9 billion in 2005-2006, and by 3.5 per cent annually in future years. The federal government is also proposing to appoint an expert panel to examine and recommend an allocation formula for the future.

The three finance ministers insist that equalization fully reflects existing fiscal disparities and not include arbitrary per capita based components. They are also concerned about whether the proposed changes will produce the needed improvements to equalization, and in particular:

– if the proposed level and growth of equalization are adequate;

– how equalization is allocated to reflect the funding needs of the Atlantic provinces; and

– whether there is a need for a panel of experts to review the equalization formula.

The ministers will relay the conclusions of Friday’s meeting to Atlantic premiers as part of preparations for the First Ministers Meeting in Ottawa later this month. The prime minister and leaders of all Canadian provinces and territories will hold the equalization discussions on Oct. 26.

Equalization is the federal government’s constitutional commitment to provide funding to eligible provinces to ensure all Canadians receive reasonably comparable levels of public services, at reasonably comparable levels of taxation.

For more information contact:

Mitch Murphy, Provincial Treasurer, Government of Prince Edward Island, 902-368-4050

Cathy Shaw, Department of Finance, 902-424-8787, 902-430-3657 (cell), shawcm@gov.ns.ca

Diane Keough, Newfoundland and Labrador Department of Finance and Treasury Board Secretariat, 709-729-6830, 709-685-4401, dkeough@gov.nl.ca