Provincial and territorial finance ministers could not agree to a deal with their federal counterparts Friday to reform the $12-billion equalization program.

It leaves the ministers, who met with the federal government in Vancouver, still waiting for clarity from Ottawa on the program, in which Ottawa gives money to poorer provinces to help narrow the gap between "have" and "have-not" regions.

Federal Minster of Finance Jim Flaherty speaks with reporters Friday after meeting with his provincial counterparts in Vancouver.
(CP PHOTO/Richard Lam)

"There are some fundamental differences of opinion among the provinces that I did not expect to see resolved, nor were they resolved," Federal Finance Minister Jim Flaherty said after the two-day meeting had ended.

Flaherty said he has not reached a conclusion about equalization, but the Tories intend to move forward in their next budget.

Provinces divided

The provinces are split on the funding formula for equalization and whether some of the have-not provinces' newfound resource wealth should be counted.

Ontario Finance Minister Greg Sorbara said he raised concerns about his province's hard-hit manufacturing sector and what he called the fiscal machinery that he says needs to be fixed.

"I think there was some receptiveness there on behalf of the federal minister and I think my colleagues had a much better understanding of the circumstances," Sorbara said after the meeting.

But Saskatchewan Finance Minister Andrew Thomson, whose province has battled calls for oil revenues to be included in the formula, said the meeting left him disappointed.

"I'm not reassured at all by what I heard," Thomson said. "We're told that something will be coming in the budget, I guess we'll wait and see about that."

Reforming the contentious equalization program was part of the Conservative government's election promise to fix the so-called fiscal imbalance between Ottawa and the provinces.

The other key aspect is to boost per capita transfer payments to all provinces for health, post-secondary education and other social services.

Flaherty has promised to deliver his remedy for the fiscal imbalance in his next budget, which could trigger a spring election.

The finance ministers are scheduled to meet again in Quebec City in June. With files from the Canadian Press