Newfoundland and Labrador is not going to pursue a legal challenge against Ottawa regarding the federal equalization program.
The province’s former Liberal government filed the suit in 2024, claiming the program unfairly penalizes Newfoundland and Labrador. However, the new PC government has abandoned the suit.
One financial watchdog is pleased to see the province drop the case.
Newfoundland and Labrador has long felt that it should be receiving more from Ottawa, however, the Canadian Taxpayers Federation intervened, arguing that the Canadian Constitution was never designed to let provincial governments sue the federal government for bigger handouts.
It says equalization costs taxpayers billions of dollars every year.
Currently, Ottawa send about $25-billion to Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, PEI and Newfoundland/Labrador. This province will receive $180-million this year.
The federation says the decision to walk away from the legal fight was the right call.
