Millions of dollars were made available in Tuesday's federal budget for P.E.I. to help build new infrastructure, but Provincial Treasurer Wes Sheridan says he doesn't know if the Island can take advantage of it.

'It puts a lot of pressure on our capital spend to take … full advantage of what the feds have put on the table.'— Provincial Treasurer Wes Sheridan

The trouble, said Sheridan, is that any money provided by Ottawa under the enhanced Build Canada Program must be matched equally by the province and the municipality. Ottawa will only fund one-third of the total cost.

"We'll be really challenged to find the funds to match what the federal government is putting forward," said Sheridan.

"It puts a lot of pressure on our capital spend to take advantage, full advantage, of what the feds have on the table. I'm not quite sure if we have the wherewithal to take advantage of it all."

The province and municipalities would have to fund two-thirds of the cost of infrastructure building, says Provincial Treasurer Wes Sheridan. (CBC)

The province has set aside $128 million in infrastructure money for the upcoming year, and Sheridan said that likely won't be enough to take full advantage of P.E.I.'s share of the $12 billion federal Finance Minister Jim Flaherty announced for the Build Canada Fund Tuesday.

Charlottetown Mayor Clifford Lee noted there is an infrastructure program available that would not have required the same level of investment from provinces and cities. With the gas tax rebate program the federal government foots the entire bill, and that's what Lee was hoping to see improved.

"I know the Federation of Municipalities has been urging the federal government to increase the level of funding to that as opposed to increasing the Build Canada Fund or create yet another infrastructure program that requires cost sharing at the other level," said Lee.

Equalization share likely to fall

That's not the only bad news Sheridan heard in the budget.

Flaherty is planning to put a cap on the total amount of equalization money available to the provinces. Equalization provides about one quarter of the Island's government revenues, and Sheridan is expecting that the province will receive less under the cap. Although total equalization payments will stay the same, Ontario has joined the have-not list of provinces receiving equalization.

"So what happens is if you have a hundred dollars to be spread over a certain number of jurisdictions, if you throw another one into the pot, everyone else is going to get a little bit less," he said.

Sheridan said if there was no cap on the total amount in the equalization pot, then all provinces would get their fair share.