Prime Minister Stephen Harper appears to be losing patience with provinces' squabbling over equalization, including a threat by Alberta Premier Ralph Klein to "opt out" if energy revenues are included in the formula.
"We know the provinces are very divided on this," Mr. Harper told reporters Thursday. "I think we need to be clear: equalization is not an Alberta program or an Ontario program. Equalization is a strictly federal program."
The issue has once again polarized premiers, with Saskatchewan's Lorne Calvert backing Mr. Klein and New Brunswick's Bernard Lord supporting Mr. Harper's position.
Mr. Klein, who retires as premier later this year, threatened Wednesday to find a legal way to exit the revenue-sharing program if Alberta's mushrooming oil and gas royalties figure into the formula.
Under equalization, Ottawa tops up the coffers of so-called have-not provinces to ensure all Canadians receive comparable public services.
Mr. Klein said the federal Conservatives campaigned on a promise not to include resource revenues in a revamped equalization formula.
"We will participate if the feds and the provinces conclude that there ought to be a 10-province standard," Mr. Klein said. "But we won't participate if resource revenues are included."
Under the current system, Ottawa calculates the fiscal capacity of each province and establishes a standard by averaging five of them - a group Mr. Harper noted doesn't include Alberta.
Most provinces are pushing for a 10-province standard, which should net the have-nots more money. In the election campaign, Harper promised to introduce the 10-province standard and leave out resource revenues.
But a recently released report prepared for the federal government recommended half of resource revenues should be included in the calculation. A report done for the provinces suggests all resource money should go into the equalization pot.
Ontario Liberal Premier Dalton McGuinty has complained his province historically has carried most of the load under the current formula.
"Obviously while I'd like to see a consensus of the provinces on this, it's I think becoming increasingly obvious there won't be one," said Mr. Harper.
Alberta appears on a collision course with Ontario and Quebec when the premiers sit down to discuss the issue after the western premiers' conference in Gimli, Man., next week.
Mr. Harper said the government wants to put equalization on a "principled basis for years to come."
"What's been happening in recent years is the federal government just increasingly arbitrarily assigns a number," he said. "That doesn't seem to us to be fair."
Saskatchewan Premier Lorne Calvert echoed Klein's comments, saying he's on the "same page."
Saskatchewan is Canada's second-largest producer of oil and third-largest producer of natural gas. But if the money gained from those products isn't included in the equalization formula, Saskatchewan would benefit from hundreds of millions of dollars in federal transfer payments.
"We share the view that oil and gas revenues, non-renewable natural resource revenues, should be excluded from the equation," Mr. Calvert told an open line radio show in Regina on Thursday.
But Mr. Lord agreed with Mr. Harper, saying Alberta is making empty threats.
"No province can pull out," he said in Fredericton. "Well, I guess a receiving province can decide not to receive any money."
Mr. Lord added the money for the program doesn't come from the government of Alberta, it comes from the government of Canada.
Gary Mar, Alberta's minister of international and intergovernmental relations, predicted that other provinces - possibly British Columbia, Newfoundland and Nova Scotia - would also back Mr. Klein's position.
Mr. Mar shrugged off Mr. Harper's suggestion that the federal government will have the final say.
Instead, Mr. Mar said Alberta will be reminding the prime minister about the promise he made in a letter to the premiers during the last federal election campaign in which he said natural resource revenues would not be part of the equalization formula.
"We want to make sure that the prime minister is impeccable with his word."
Mr. Mar said Alberta, with 10 per cent of the population, is already paying about 14 per cent of the cost of equalization. That would only get worse with a change in the formula.
British Columbia Premier Gordon Campbell said equalization has long been a fractious subject.
"I can tell you the most difficult meetings I've had with my colleagues, the premiers, are discussions about equalization because rather than being driven by policy, they're being driven by, in many cases, by how much money one province or another may get."
Still, Quebec Premier Jean Charest said he wasn't worried the talks would fall apart.