Newfoundland and Labrador pulled out of ongoing trade talks Monday as it ramped up its fight with Ottawa over a promised fishery fund tied to Canada's free trade deal with Europe.
Premier Paul Davis said his province's support for the Comprehensive Economic and Trade Agreement depends on the federal government delivering its share of that cash.
"We're at a crossroads where the federal government has changed the rules," he told a news conference after meeting with the other three Atlantic premiers in St. John's.
"We need to get beyond that in order for us to continue our support for CETA."
The provincial government says Ottawa has reneged on a deal to pay $280 million in exchange for the province relinquishing minimum processing requirements as part of CETA. Those rules helped protect jobs in fish plants, especially in rural areas hit hard by the cod moratorium since 1992.
The federal government has said that "up to" $280 million would be available for direct fishery losses under the free trade deal with the European Union. But it says those losses would have to be proven.
Two federal ministers have also stressed that no "blank cheque" or unfair advantage was ever offered.
The province had announced earlier Monday that it was "suspending its participation in all trade agreements" as the CETA impasse drags on. Officials later clarified that it's withdrawing from any ongoing trade talks such as the proposed Trans-Pacific Partnership.
A spokesman for federal International Trade Minister Ed Fast said the move will hurt Newfoundland and Labrador most.
"With almost 78 per cent of Newfoundland and Labrador's economy dependent on international trade, anything that would delay or exclude (it) from taking advantage of any of Canada's trade agreements would have a detrimental economic impact," Max Moncaster said in an email.
It would also create "severe competitive disadvantage" for global exports, he added.
Business groups that want tariff-free access to lucrative European markets weren't happy.
"We do not support an anti-trade message," Derek Butler, executive director of the Association of Seafood Producers, said in a statement.
"As we said in December, we've been fighting EU tariffs for years now, and we should not put their removal in peril. Jeopardizing CETA — or freer trade in general — is not a solution."
The Newfoundland and Labrador Employers' Council, representing public and private employers, said the EU has a wealthy population of more than 500 million people and CETA would help virtually all sectors while diversifying the province's oil-dependent economy.
"It would be disastrous if a short-term disagreement prevented Newfoundland and Labrador from taking advantage of that opportunity," the council said in a statement.
Business Minister Darin King said Monday that he and Intergovernmental Affairs Minister Keith Hutchings met last week in Ottawa with various European embassy officials along with the European Union ambassador.
They are now considering a trip to make their case in Europe.
Leaders from the rest of Atlantic Canada said Monday they support the province's fight for what it was promised, with conditions.
P.E.I. Premier Robert Ghiz summed up that sentiment at the closing news conference for the Council of Atlantic Premiers.
"I would expect the federal government to live up to any deals that do exist, but also make sure that everyone else is treated fairly along the way as well."
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