Eight Conservative MPs from Atlantic Canada supported a bill Tuesday to implement the federal budget, despite urgings from Nova Scotia Premier Rodney MacDonald to break ranks and vote against it.

The final vote on the budget implementation bill, which sets the Conservatives' March 19 budget into action, passed by a margin of 157-103.

Atlantic Conservative MPs Norman Doyle and Gerald Keddy, left, vote in favour of the government's budget in the House of Commons in Ottawa on Tuesday.
(Tom Hanson/Canadian Press)

The Bloc Québécois voted with the Tories to pass the bill — which now heads to the Liberal-dominated Senate — while the Liberals and NDP voted against it.

The budget offers new equalization formulas that undermine the Atlantic accords, said MacDonald, who is a Tory premier. The accords, signed in 2005 under then Liberal prime minister Paul Martin, protect Nova Scotia's and Newfoundland and Labrador's offshore oil and gas revenues from federal clawbacks.

MacDonald, who took his rally against the federal budget to Ottawa Tuesday, said it will cost Nova Scotia hundreds of millions of dollars.

His visit to the capital came a day after Prime Minister Stephen Harper challenged Nova Scotia to take the federal government to court if it is serious about claims that Ottawa went back on its word and changed offshore-oil revenue agreements.

Longtime Nova Scotia Conservative MP Bill Casey was booted out of the Tory caucus last week when he voted against the budget during an earlier vote. Fellow Nova Scotia Tory MP Gerald Keddy had publicly expressed his concerns with how the dispute is being handled, but decided to vote for the bill.

"The option of not being in government and not working for my province in my riding is not an option that I'm willing to take right now," Keddy said after the vote.

Despite the government's insistence there would be no side deal cut for provinces, negotiations have been underway between Ottawa and Nova Scotia since the March budget was tabled.

The budget offers the signatories of the Atlantic accords — Nova Scotia and Newfoundland and Labrador — two options:

• The old equalization formula, along with the benefits from the Atlantic accords, which allowed the provinces to profit from their offshore oil and gas resources without fear of losing equalization money.
• A new, enriched equalization formula that includes a cap on the amount of equalization payments if the province's offshore oil and gas revenues reach a certain level.

'Very disappointed'

Moments after the vote, MacDonald said he was "very disappointed" it passed.

However, MacDonald also said a proposal he gave to the federal government earlier Tuesday was well received, but would not provide any details, only saying he discussed it with Finance Minister Jim Flaherty and Harper.

"It does seem to me to be some willingness to take a look further at the issue and hopefully to see the spirit of the accord kept in order," he said.

"But until I see something signed and on paper we won't be pleased."

He said he will also present his ideas to the Senate.

Flaherty would only say they are having discussions about the implementation of the accord and the equalization formula, insisting there will be no "side deal."

Meanwhile, Newfoundland and Labrador Premier Danny Williams, who has railed against the budget, told CBC News Tuesday that he was pleased to see MacDonald speak out so publicly.

"He indicated we'd stand shoulder to shoulder on this," said Williams. "I'm certainly delighted he's being more vocal."