The Nova Scotia Court of Appeal has dismissed an appeal by the Cape Breton Regional Municipality to sue the province for a bigger share of federal equalization payments.

In a written ruling issued Friday, Chief Justice Michael MacDonald stated that while the court recognizes that CBRM suffers from economic disparity, neither municipalities nor citizens have the right to sue the provincial government over alleged disparities in equalization payments.

The Appeal Court ruled that agreements governing equalization payments were between the federal government and the provinces, not individual municipalities.

The court's ruling upheld a previous ruling by the Nova Scotia Supreme Court to dismiss the CBRM lawsuit. In that case, the regional municipality accused the province of underfunding it by $20 million since 1995, when Sydney and neighbouring communities were amalgamated into one municipality.

Lawyers for the municipality argued that under Sec. 36 of the Constitution Act, the province has an obligation to provide a reasonably comparable level of service to residents for comparable taxation.

However, the lower court ruled that the municipality's lawsuit had no basis in law.

Seeks leave for Supreme Court appeal

Cape Breton Regional Mayor John Morgan said that while he was disappointed, he was not really surprised by the Court of Appeal ruling.

Morgan also said he disagreed with the Appeal Court's ruling that Sec. 36 of the Constitution Act applies to the federal and provincial governments only, and not to municipalities or individuals.

"Really, the Constitution is available to all of the citizens of the region and I would say it's not reasonable to say that it is only government that could bring these issues forward,” Morgan told CBC News on Friday.

“But the whole nature of constitutional law is limitations on government or obligations of government, so to suggest that the only ones that could litigate it is government, I think, is logically flawed,” he said.

Morgan said the Cape Breton Regional Municipality will seek leave to appeal the latest ruling to the Supreme Court of Canada.