FREDERICTON - Prime Minister Stephen Harper used a road funding announcement in New Brunswick on Monday to highlight how a co-operative approach with Ottawa can benefit the provinces.
Harper, who is locked in a battle with Nova Scotia and Newfoundland and Labrador over changes to equalization funding, said the highway improvements show how federalism can work.
"Today's announcement is a testament to what can be achieved when Ottawa and the provinces embrace the true spirit of the federalism of openness and work together to make Canada stronger, safer and better,'' he said at the legislature, where he was joined by Premier Shawn Graham.
The Conservative governments of Premier Rodney MacDonald of Nova Scotia and Newfoundland and Labrador's Danny Williams complain that the latest federal budget forces them to choose between an existing agreement on offshore energy revenues or a new equalization formula.
Both provinces say the changes could cost them billions of dollars in lost revenue, but the federal government has dismissed those claims.
Asked if he was trying to send a message to MacDonald and Williams with his New Brunswick announcement, Harper said he has had a "a great relationship'' with Graham and his predecessor, Conservative Bernard Lord.
"Look, I compliment premier Graham for working co-operatively to get this announcement finalized, to get on with work this summer, and I think it's always best when governments work together,'' he said.
Work will begin this summer on a number of highway projects in New Brunswick as part of a 10-year federal funding program to improve the national highway system.
The federal government's 50 per cent share of the cost of the projects announced at the legislature in Fredericton is $207 million.
Under the cost-sharing agreement with the province, Routes 1, 7, 8 and 11 are among those that will benefit from the money to be spent on highways.
The projects were previously announced and the deal Monday simply gets the money flowing.
A New Brunswick government source who asked not to be named said the event was being used as an opportunity for the prime minister to be seen as getting along with a premier from Atlantic Canada.
Graham, a Liberal, has said he prefers to work in co-operation with the Conservatives in Ottawa.
"My approach here in New Brunswick is different than other premiers, and I've received some criticism. Some people would like to see me be more aggressive in working with Stephen Harper,'' Graham said after the announcement.
"I'm prepared to accept the criticism, because at the end of the day we're producing results, and those results mean that New Brunswickers are seeing their interests put at the forefront, rather than political interests.''
Andy Scott, the Liberal MP for Fredericton, said he was pleased New Brunswick had reached the highway deal, but acknowledged it could also be viewed as a political event.
"My sense is that it didn't hurt to be able to position this relationship between Harper and Graham) against others, but I believe that people involved in this public enterprise are in it for all the best reasons,'' he said.
Saskatchewan's NDP government is also at odds with Harper over the federal budget and is going to court in the fall to challenge the constitutionality of changes to equalization.
The Atlantic accords struck with the federal government spell out how benefits and revenue from the offshore energy sector will be divided between the two levels of government.
MacDonald and Williams say the recent federal budget, which was made law Friday, effectively negates provisions in the accords that protect provincial revenue from being clawed back under the federal equalization program.
