A veteran Conservative MP from Nova Scotia is considering voting against his government's 2007 budget over the attempt to cancel the Atlantic Accord on offshore resources.
"I believe there's been a mistake in the budget," Bill Casey told Â鶹´«Ã½net's Mike Duffy Live on Monday.
"There's an agreement between the government of Canada and government of Nova Scotia ... that makes certain obligations to the province of Nova Scotia, and the budget makes changes to that."
Those changes effectively killed the Atlantic Accord and could cost his province anywhere between $500 million and $1 billion, he said.
"It's very simple to fix," Casey said, adding he was going to a meeting with Finance Minister Jim Flaherty to discuss the issue.
But if he didn't get a reasonable answer, Casey said he would be prepared to vote against the budget in a vote due this week.
After the meeting, Casey told The Canadian Press: "Actually a really good discussion. Going to meet again tomorrow.
"I think the concerns are clearer now than they've ever been and that's always a good sign ... It's a very serious issue for us and it's a matter of honouring a signed agreement between the federal government and the province."
However, he repeated his threat to vote against the budget.
Doing so could get him expelled from the Conservative caucus. "I am the longest-serving member of Parliament on the team, and I am proud of that," said the four-term MP. "But I just want it fixed. It's my province, it's a signed agreement ... and if I don't stand up for that, what do I stand up for?"
There are two other Conservative MPs representing Nova Scotia -- Foreign Affairs Minister Peter MacKay and Gerald Keddy.
Volatile issue
Changes to equalization and the treatment of non-renewable resource revenue have always been a volatile federal-provincial relations issue.
In the 2007 budget, "have-not" provinces were given a choice between the old formula, which excluded revenues from oil and gas but not from other non-renewable resources, and a new, enriched formula that would count 50 per cent of resource revenues towards a have-not province's fiscal capacity.
However, if they chose to stay with the old formula, the Atlantic Accord signatories would be left with a lower equalization payment once the accords expire in five to 13 years.
For the second option, the signatories, who signed the deal with then-Liberal Prime Minister Paul Martin in 2005, would have to effectively give up on the accord.
That accord protects the province's offshore revenues from "clawbacks." Casey said it does so in Nova Scotia's case regardless of what changes are made to the equalization formula.
Some Atlantic Tories have hinted that the feds may allow Nova Scotia to choose one option or the other from year to year.
Flaherty has rejected the idea. He wasn't available for comment on Monday evening.
Newfoundland and Labrador Premier Danny Williams has been the most furious about what he calls a broken promise by Harper to exclude non-renewable resource revenue from equalization calculations.
Saskatchewan Premier Lorne Calvert has also been vocal about the inclusion of resource revenues in equalization.
Peter Van Loan, the government's house leader, told MDL that the Atlantic Accord is fully protected, "so the assurance that (Casey is) looking for is there."
The provincial government opted for what Van Loan called the "enhanced equalization" formula.
If Casey voted against the budget, he would be also voting against tens of millions of dollars in additional funding for Nova Scotia in a host of areas, Van Loan said.
Asked if Casey faced expulsion, Van Loan said, "I'm optimistic that Bill will come to appreciate it's a very good deal for Nova Scotia."
NDP MP Paul Dewar told MDL that he's been hearing rumblings from the Conservative backbench, adding that Casey is not a loose cannon.
"I think the lesson here for the finance minister is never get up in the House and say, 'I fixed the fiscal imbalance issue', because you haven't," added Liberal MP David McGuinty.
With files from The Canadian Press
