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Newfoundland and Labrador is cancelling a lawsuit put forward by the previous Liberal government that aimed to push Ottawa to change its equalization payment formula.
The Office of Premier Tony Wakeham shared the news in an emailed statement to CBC News on Monday, but the news was shared by the Canadian Taxpayers Federation on Friday.
The lawsuit was filed in 2024. That May, then-justice minister John Hogan and the-finance minister Siobhan Coady argued the federal government was cutting Newfoundland and Labrador out of potentially billions of dollars when the current equalization formula was extended to 2029.
In the House of Assembly on Monday, Wakeham said while he believes the equalization system is flawed, his government won’t be moving forward with the lawsuit.
“There is nothing equal about the equalization program. We all recognize that, but this has been ongoing for a number of years. The former Liberal government decided to go to court, we’ve turned around and had our legal opinions review the file. They recommended that we not proceed,” Wakeham said.
The emailed statement from Wakeham’s office said moving away from the lawsuit is part of efforts to foster a “collaborative and constructive relationship with the federal government.”
Hogan — who is now leader of the Opposition in Newfoundland and Labrador — said at the time going to court was a last option, and he preferred an out-of-court settlement.
When he challenged Wakeham as to why he was giving up on the lawsuit in the House of Assembly, Wakeham said his government remains committed to getting the province the money it deserves.
Hogan accused the Progressive Conservatives of a lack of transparency, saying no details of the announcement were shared publicly by government.
Equalization is a federal program that provides recipient provinces with money to allow for services across Canada to remain at a fair level.
Newfoundland and Labrador hadn’t received equalization payments since 2008, before payments resumed in 2024.
The province received $218 million in 2024, according to the Federal Department of Finance. It will receive $113 million in 2025-26, and $182 million in 2026-27.
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