N.S. premier takes case against federal budget to Toronto

Nova Scotia's Conservative premier will take his case against the federal budget to Toronto on Monday, telling Bay Street business leaders why he wants Ottawato honour an offshore revenue deal with his province.

Rodney MacDonald is calling on all members of Parliament from his province to vote against the federal budget.

MacDonald said Ottawa is going back on its word by changing past agreements signed with the province over offshore revenues.

"It really, in my belief, disrespects the professional approach both levels of government were taking," MacDonald said Sunday afternoon of Finance Minister Jim Flaherty's budget.

MacDonald said his comments were prompted by a letter by Flaherty published in Saturday's Halifax Chronicle-Herald, in which Flaherty said Ottawa would not make any side deals on the Atlantic Accord. The accord, struck under the former Paul Martin Liberals in 2005, was designed to allow Nova Scotia as well as Newfoundland and Labrador to profit from their offshore oil and gas resources without fear of losing equalization money.

But in his letter Saturday, Flaherty took a hardened stance, arguing that the equalization program was now restored to a "principles-based program" for the "first time in many years," and adding that he would not negotiate any side deals with provinces in order to get support for his budget.

Flaherty also insisted Ottawa was still honouring the Atlantic Accord, which was supposed to last 14 years, and that nothing had changed for Nova Scotia.

But that's not so, said MacDonald. "The accords are not going to be honoured as signed," he said.

"And that will mean the loss of $800 million-plus for our province."

Senior Tory MP Bill Casey caused an uproar and instantly became an independent MP last week when he voted against his own government's budget, reasoning he could not support an action that would cost his home province of Nova Scotia hundreds of millions of dollars.

Claiming Ottawa was not honouring a signed contract, the rebel MP called on Flaherty to admit that he was basically proposing an "amended Atlantic Accord." He was later kicked out of the Conservative caucus.

MacDonald now appears to be agreeing with Casey that the accord signed in 2005 was a "contract" between the two governments, and that the province will not accept anything less than "the signed accord."

Still, there is virtually no chance of defeating the budget. Even if all of the Conservatives from Atlantic Canada do vote against it, they will be outnumbered by the Bloc Québécois, which is supporting the budget based on the extra money Quebec is expected to receive.