Ottawa's transfer payments to territories safe: finance ministers

Finance ministers from the Yukon and the Northwest Territories say the federal government has assured them that its transfer payments to the territories are safe.

N.W.T. Finance Minister Michael Miltenberger and Yukon Premier Dennis Fentie met with their provincial counterparts and federal Finance Minister Jim Flaherty at a meeting Monday in Mississauga, Ont.

"There is a very solid commitment by Canada that the territorial funding formula will be unaffected and will remain on a sustained growth path, which is great news for the North," Fentie, who is also the Yukon's finance minister, told CBC News after Monday's meeting.

Fentie said he was also pleased to hear the northern territories won't be affected by the federal government's plan to change the funding formula with the provinces.

Flaherty announced Monday that Ontario would be getting equalization payments for the first time. Under the federal government's equalization program, richer provinces give funds to poorer provinces to ensure they can provide basic government services.

Miltenberger said the news of Ontario getting equalization payments had him worried that less money in federal transfer payments would be flowing into the northern territories.

"People wanted to know about equalization, which they gave to us early so we could plan our budgets around that," Miltenberger said.

"And then for us, it's going to be planning, looking down the road ... how do we offset these sunsetted programs?"

Miltenberger said there are two sources of federal funding that are expected to run out next year: a funding program for affordable housing, and one for health. Money from the two programs total about $24 million annually.

Miltenberger said the territorial ministers are in talks with federal officials to try to figure out what to do if the money isn't renewed.

Fentie said he and other finance ministers will meet again in about a week, then again in December. They are working on a national plan to cope with the global credit crunch, and the resulting downturn in financial markets, he added.