Nova Scotia Premier Rodney MacDonald said he has nothing but kind words for his Newfoundland and Labrador counterpart's new equalization side deal with Ottawa.

Newfoundland and Labrador announced this week it is reluctantly opting in to the federal Conservatives' equalization plan this year, to gain about $66 million in revenues.

'I say good on them for seeing a very large surplus,' Nova Scotia Premier Rodney MacDonald says of Newfoundland and Labrador's new equalization side deal.
(CBC)

Earlier this fall, Premier Danny Williams labelled MacDonald as "weak" and a sellout for accepting what he called an inferior side deal with Prime Minister Stephen Harper.

Harper had come under fire for turning away from a pledge he made leading up to the 2006 election to exclude non-renewable resources — including offshore oil and gas — from equalization calculations.

MacDonald told CBC News he does not have sore feelings, and insisted that Nova Scotia negotiated its own side deal because of specific concerns.

"This is not about disagreements between Nova Scotia and Newfoundland — this is about what's good for Nova Scotia, and my priority is that," MacDonald said Tuesday.

"Mr. Williams will decide what's good for Newfoundland and I respect that. I say good on them for seeing a very large surplus," said MacDonald, referring to the $881 million surplus that Newfoundland and Labrador announced earlier this week.

"I'm very pleased to see that. Whenever one of our Atlantic partners is stronger, that's good for Nova Scotia, and I hope that we're in the same position some day."

'Being railroaded into an untenable situation': Williams

Meanwhile, Williams said Wednesday that his government has not broken from its commitment to fight for a better equalization deal.

In a statement, Williams insisted his government "has signed no deal, rather is following the new rules imposed by the federal government."

Describing the option as "a one-year gain," Williams said the revised equalization deal will cost his government about $10 billion over the life of the Atlantic Accord that Nova Scotia and Newfoundland and Labrador reached with Ottawa in 2005.

"Obviously, when the time comes in March 2008 to make that decision, we will choose the formula that yields the most financial benefit for Newfoundlanders and Labradorians," Williams's statement said.

"Essentially, we are being railroaded into an untenable situation whereby we are forced to choose the [amended] formula because in this particular year, it will give us additional monies just as it will give all equalization-receiving provinces extra cash."

Williams was to attend a meeting of Atlantic premiers in Halifax on Wednesday. Instead, deputy premier Tom Rideout will represent him.