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Prince Edward Island Premier Robert Ghiz talks with reporters at Fanningbank, the official residence of the lieutenant-governor, in Charlottetown on Tuesday, Sept. 6, 2011.

Andrew Vaughan/THE CANADIAN PRESS

Premier Robert Ghiz of Prince Edward Island is calling for changes to the equalization program, saying a cap on the federal wealth-sharing formula should be removed.

In a throne speech Wednesday, the first since Mr. Ghiz was re-elected last fall, the Liberal premier says equalization does not recognize the higher cost of delivering public services in small provinces.

"We recognize that the federal government is taking its own measures to deal with its fiscal concerns," said the speech, read by Lt.-Gov. Frank Lewis.

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"Nonetheless, there is a constitutional obligation to ensure Islanders can enjoy comparable levels of services at a comparable level of taxation.

"The equalization program — which should serve to offset fiscal inequities — has been adjusted with the result that the program does not, in fact, equalize."

Mr. Ghiz is also urging Ottawa to establish a "significant" base level of equalization funding, though the speech did not elaborate.

The province is expected to get $337-million this fiscal year in equalization payments from the $15.4-billion program. It is one of six provinces to receive the funds this year.

Mr. Ghiz is also promising to consult the public on whether the province should elect senators, as well as launch a review into services for mental health and addictions.

As well, the speech says his government will try to balance the budget. Mr. Ghiz said recently that the deficit could reach $80-million, which would be up from the $73.4-million reported in December.

The Liberals won their second-straight majority last October, electing 22 members in the 27-seat legislature.

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The Progressive Conservatives have five seats.

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