Harper to deal with fiscal imbalance in budget: report

Quebec to get extra $1.5B in equalization payments

Last Updated: Tuesday, January 16, 2007 | 9:01 AM ET

CBC News

Prime Minister Stephen Harper will deal with the so-called fiscal imbalance in the upcoming federal budget, the French-language network of the CBC reported Monday.

A confidence vote on the federal budget, which some news reports suggest could come on March 20, would be the first real opportunity for opposition parties to bring down the minority government.

Harper's plan is expected to accept the recommendations of a report ordered by the federal government last year on the federal equalization program.

It suggested that half of the revenues of the provinces drawn from natural resources be included in the calculation of equalization payments.

But the report drew fire from Alberta, Saskatchewan, and Newfoundland and Labrador. Those provinces were angry about the plan to include resource wealth in a new payment formula.

Radio Canada reported Monday that Ottawa will increase transfer payments to the provinces in the area of education, post-secondary education and infrastructure.

As well, Quebec would get an extra $1.5 billion in equalization payments.

New money could arrive this year, but the plan is more targeted to long-term financial commitments.

Settling the fiscal imbalance has been one of the priorities of the federal government, and Harper has suggested a resolution could be forthcoming this year.

The budget speculation comes amid news reports the federal Conservatives have scheduled a campaign training school for March 15-18. Party officials and candidates were told of the Toronto conference in an e-mail from Harper's chief of staff.