Canada's premiers have not reached agreement on how to fix the fiscal imbalance, but they say they have made progress on solving the issue.

A year ago, the provinces appointed an expert panel to study the imbalance in transfer payments to the provinces. On Tuesday the panel released its report, along with a number of recommendations.

In total the panel recommends Ottawa return an extra $9.6 billion to the provinces: $4.9 billion for health, social assistance and education and $4.7 billion in equalization payments.

Currently only Ontario, Alberta and Saskatchewan do not receive equalization payments.

Quebec Premier Jean Charest says not every province likes the final document, but that was no surprise.

"We didn't expect unanimity on the content of the report, and in fairness we have different realities," he said.

Provinces want more tax back

The premiers say they are all agreed that Ottawa collects too much money from taxes and that the provinces don't get enough back to pay for programs.

Even Prime Minister Stephen Harper is on record as saying he believes the formula needs to be changed.

But the provincial leaders disagree on exactly what action should be taken.

The report recommends equalization payments to have-not provinces be based on revenues raised in all 10 provinces.

Right now, Ottawa collects tax dollars, and then divides it up across the country so each province can provide similar levels of services, no matter what their fiscal situation.

The panel is recommending all 10 provinces average out how much money they bring in, every year, including oil and gas resources.

But some of the premiers don't accept that argument. Alberta Premier Ralph Klein is against the idea, saying energy prices may be high now, but that could change.

Resource-formula dispute

"What goes up must come down — that is Newton's Law," said Klein. Klein, who is also this year's chair of the premiers' conference, says "there are a number of areas where we do agree. We agree with about 90 per cent of the recommendations."

Saskatchewan Premier Lorne Calvert agrees with Klein and says Saskatchewan should not have to share its oil and gas revenues.

Calvert says, for example, the report recommends that Nova Scotia and Newfoundland and Labrador be allowed to keep the money they make from offshore oil and gas.

"But [the report] does not then conclude that that same equity, that same fairness, should be extended to the people of Saskatchewan and the non-renewable resources in Saskatchewan."

The report's recommendation would increase the size of the equalization program by $5 billion per year.

But Ontario, for example, wouldn't see any of that money.

Premier Dalton McGuinty says Ontario can't afford to pay any more.

"We think the single best way to address the fiscal imbalance is by way of ensuring that there are transfers that benefit all Canadians and not just a select few," McGuinty told a news conference in Montreal.

Manitoba's Gary Doer says it will be a difficult discussion for the premiers. But, he adds, this situation is better than in the past when each province was left on its own to negotiate its own side deal with Ottawa.

"Lets get rid of the ad hoc, 'Lets Make a Deal' kind of federalism," said Doer.

Tory priority

Saskatchewan's Calvert says the premiers — and Ottawa — have made a lot of progress on dealing with the fiscal imbalance, even if they haven't come to a final agreement.

"Its not that many months ago that the national government of Canada was denying there was a fiscal imbalance. In fact, the new Conservative government has put it on its top five priorities to deal with it."

The provinces have agreed on many items that were on the agenda for their meeting, for example the recommendation that Ottawa pay about $5 billion more per year for post secondary education and social assistance programs.

The premiers do have time on their side.

The federal government has already said its first budget won't contain anything for the fiscal imbalance.

The premiers say they hope if they settle their internal differences in the next year that there will be something for them in next year's federal budget.