ST. JOHN'S, N.L. - In a rare show of diplomacy, Newfoundland Premier Danny Williams signalled Friday he is willing to end his feud over equalization with Prime Minister Stephen Harper, but it would take $10 billion in compensation over 15 years.
Williams made the offer after meeting with Harper for about an hour in a bid to try to iron out their differences over Newfoundland's ability to retain its offshore energy revenues.
Williams said the meeting was cordial and the two "agreed to disagree'' about the Atlantic Accord -- a federal-provincial deal that was supposed to the protect the province's offshore energy revenues from clawbacks under the equalization formula.
But he said he stands by his view that Ottawa has broken a key election promise to maintain the principles of the accord -- a move he claims will result in his province losing $10 billion in equalization payments.
"At the end of the day, the promise and the principle converts to cash for the bottom line for the people of Newfoundland and Labrador -- that's what the deal is all about,'' Williams said at a news conference after the meeting.
"We're trying to find options to get compensation.''
Williams said his meeting with Harper started with each giving their interpretation of the accord but moved quickly on to other matters, such as the province's economy, when it was obvious neither side would budge.
He said Harper, who didn't speak to reporters afterwards, didn't offer any solutions but said he would take the province's position into consideration.
Williams appealed to the rest of the country to understand his position by suggesting his province contributes $100 billion to the nation's economy.
"I just want Canadians to know that we're paying our way down here,'' he said. "This is not handout time. This is not welfare cheque time. This is not just `give us some equalization money so we can just get by down here.'
"We're paying our way. We're making a huge contribution in natural resources and we're only a half-million people here producing it.''
Williams is upset that the spring federal budget only allows Newfoundland to tap into a more generous equalization program if it gives up the accord, which protects the province's offshore revenues from equalization clawbacks until at least 2012.
Williams appeared upbeat on his way into the meeting in a downtown hotel.
"It's Christmas -- everybody should be in a good mood,'' said the premier, adding his prepared to bury the hatchet with Harper.
"But I won't bury the principle.''
The two politicians haven't sat down together since October 2006 at the provincial Conservative convention.
Last fall's meeting was also aimed at easing the rift between the Tory leaders, but it only served to inflame the tensions, with Williams immediately vowing to campaign against Harper in a future federal election.
In the year since, Harper and Williams have traded barbs in a bitter public feud that centres on Newfoundland's share of revenues derived from its offshore oil industry.
Each has taken out competing newspaper advertisements attacking the other's position and credibility, and Williams has disdainfully referred to Harper simply as "Steve.'' After last month's provincial election, Williams said his landslide victory was "a vote of confidence'' to continue his fight.
Harper has repeatedly denied breaking any promise, emphasizing that Newfoundland has the right to stick with the Atlantic Accord. But Williams said the accord was never at issue, and he shouldn't have to give it up to gain improvements under a new equalization formula.
The equalization changes also upset Nova Scotia and Saskatchewan, but neither province has been as deep a thorn in Harper's side as Newfoundland.
Nova Scotia Premier Rodney MacDonald ended his fight last month after reaching an agreement with Harper that guarantees the province won't lose any money under the new equalization scheme.
Saskatchewan launched a lawsuit to challenge the equalization changes, though the fate of the legal challenge is unclear after Lorne Calvert's NDP lost power earlier this month.
Newly minted Premier Brad Wall has promised a smoother relationship with Ottawa and suggested the province could back away from the lawsuit if experts feel it can't be won.
