Newfoundland and Labrador Premier Danny Williams says a new letter from Prime Minister Stephen Harper does nothing to solve a multi-billion-dollar impasse.

'Ultimately it comes down to the integrity of the man and whether we can trust him or not,' Danny Williams says.
(CBC)

Lashing out at Harper for the second time this week, Williams told reporters Wednesday in St. John's that Harper has put in writing what he had assumed the prime minister thought about the equalization formula.

"I think ultimately it comes down to the integrity of the man and whether we can trust him or not," said Williams, who has renewed his pledge to campaign against federal Conservative candidates in the next election, "and whether in fact the Canadian public can trust him."

Williams has been waging a rhetorical battle with Harper since the fall of 2006, when Harper informed Williams he was departing from his pre-election pledge to exclude offshore oil revenues from the federal equalization formula.

Williams said he attempted to bridge the gap during a November meeting in St. John's and in a subsequent letter, with a request for about $10 billion in alternatives, to make up for what the province would expect to lose in the next 13 or 14 years.

Williams wanted Harper to agree to compensate the province by that amount through special projects, such as the transfer of the federal stake in the Hibernia offshore oil project, or through financial support for the proposed Lower Churchill hydroelectric megaproject in Labrador.

"He made a promise to us," said Williams, referring to written pledges Harper made before the Conservatives formed a minority government in the 2006 election.

Prime Minister Stephen Harper had a cool response to the suggestion the government turn over its 8.5 per cent share of the Hibernia offshore oil project.
(CBC)

"He made a commitment and that has a value. He has not acknowledged that in his letter."

In his Jan. 15 letter, Harper dismissed Williams's claim, and maintained that his government has protected the Atlantic accords signed with the Newfoundland and Labrador and Nova Scotia governments.

"The assertion that there is a $10-billion value gap resulting from the impacts of the new equalization formula is simply unfounded," Harper wrote.

Listen to Radio Noon from St. John's Thursday from 1:35 p.m. NT for an hour-long phone-in on this subject.

As well, Harper wrote that the federal government has yet to recoup what it has invested in Hibernia, the first field to go into production off Newfoundland's east coast. The federal government owns an 8.5 per cent stake in the project.

Williams has vowed to campaign against Conservative candidates in Newfoundland and Labrador. Again on Wednesday, Williams said he is willing to take his message to other provinces.