Williams, Calvert form alliance over equalization

Newfoundland and Labrador Premier Danny Williams said he is prepared to work with Saskatchewan ally Lorne Calvert to campaign against adverse changes to the equalization formula.

"We're prepared to crank it up if necessary," Williams told reporters Monday.

"We intend, basically, to crisscross the nation. I would expect him to come to Newfoundland and Labrador, and at his invitation I'll be going [to] Saskatchewan and we'll talk about this and we'll make it a national issue."

Williams and Calvert want Harper to keep natural resources revenues, particularly those from oil and gas,out of a new equalization formula.

Williams reiterated that he wants Harper to stand by a written election pledge released in January during the last federal campaign.

Despite a failure of finance ministers last week to make significant progress on changes to the equalization formula which Ottawa uses to transfer funds to "have-not" provinces Williams indicated Monday he is still prepared to offer an olive branch to Harper.

"You know, I still believe the prime minister made a commitment and that he will honour that commitment," Williams said.

That's a softer tone than Williams's reaction in October, when Williams said that Harper refused, during a personal meeting the two had in Gander, to repeat his January pledge.

Williams then told delegates to a Tory convention that federal Conservatives could expect "a big goose egg" in Newfoundland and Labrador in the next federal election.

Williams said Monday he is prepared to entertain options in the equalization formula, so long as Newfoundland and Labrador does not lose the gains it made in 2005 revisions to the Atlantic Accord.

"In the interests of national unity, we'd like to see a proper solution," he said.

Loyola Sullivan, Newfoundland and Labrador's finance minister, said unfavourable changes could also erase other gains, such as the record surplus the province posted in the last fiscal year.

"It's like we're under water and we get our head up last year with the surplus," Sullivan said. "If we get pushed down again, it's going to be very difficult to keep providing services at the level that we're doing."

Williams has not been averse to taking on federal politicians. During a dispute with then prime minister Paul Martin, Williams in late 2004 ordered the Canadian flag to be removed from most provincial government buildings.