Feds boost N.B.'s equalization pot by $105M next year

The federal government will transfer an extra $105 million in equalization funding to New Brunswick next year, but provincial Finance Minister Victor Boudreau is concerned about new reforms to Ottawa's program.

Boudreau confirmed the additional cash in an interview with CBC News after he left a four-hour meeting in Mississauga, Ont., where federal Finance Minister Jim Flaherty met with his provincial counterparts.

"In our case, we will be getting $105 million more next year, but [Flaherty] has announced they will cap the growth of the equalization program by tying it to GDP growth," Boudreau said. "So that is something we will have to work through a few models to see how that will impact New Brunswick."

Equalization is a federal transfer program that assists provinces to deliver comparable levels of services at comparable levels of taxation. It was also learned on Monday that Ontario will qualify for equalization for the first time in its history.

Ontario will receive $347 million next year in the $12-billion program.

Financial crisis may have led to feds' equalization revisit: Boudreau

Boudreau said Ontario's inclusion could have been a reason for the unexpected change in the constitutionally mandated program.

"We thought the federal government had turned the page on equalization, but I guess the current economic crisis made them revisit that," Boudreau said.

"Just as we are looking at constraining growth in our budget, I would presume the federal government is doing the same. The annual [equalization] growth rate of 15 per cent is something that cannot be sustained for very long."

The finance ministers spent most of the morning talking about the global economic downturn, including a presentation by Bank of Canada governor Mark Carney.

Boudreau said Carney did not reveal any new information, but he said it was informative to get a more thorough understanding of where the bank believes the economy is heading.

The finance ministers left the meeting committing to an additional meeting in mid-December to discuss a series of other issues such as infrastructure funding, access to capital and pension funds.