Offshore bargaining not over, MacDonald insists

Premier Rodney MacDonald is once again trying to come up with a way to rescue the offshore accord after lobbying against his federal Conservative cousins for effectivelygutting the deal.

The Tory premier failed to convince Conservative members of Parliament including two from Nova Scotia to vote against their own government's budget bill Tuesday.

The budget includes new equalization formulas that MacDonald says denies his province benefits under a 2005 offshore oil and gas revenue deal, whichallows Nova Scotia to keep its offshore riches without a federal clawback of equalization payments. Newfoundland and Labrador has a similar deal.

But MacDonald said he is happy he met with Prime Minister Stephen Harper and personally gave him a counter-proposal.

"There does seem to me to be some willingness to take a look further at this issue and hopefully to see the spirit of the accord kept in order," the premier said.

MacDonald said he will work with Nova Scotia's two MPs in the Conservative caucus, Peter MacKay and Gerald Keddy. The province had a third Conservative MP, Bill Casey, until he was tossed from the caucus last week for voting against the federal budget.

The premieris refusing to give details about his counter-offer, even though he has said he wanted the original accord and nothing less.

"I won't be discussing the aspects of our proposal that's put forward,"MacDonald said. "They're taking a look at it. They're running the numbers and we'll have to see where it goes from there."

Nova Scotia NDP Leader Darrell Dexter is calling on the premier to reveal the details.

"He said first that this was going to be quiet negotiations with the federal Conservatives. He then said that he was going to try to make as much noise as possible and get the MPs to vote against it, and now he's saying that there's some kind of an alternative plan but we don't know the details of it," Dexter said.

"I think he owes the people of Nova Scotia an explanation."

Sending outmixed messages

Just last week, MacDonald called Casey before a budget vote to tell him that negotiations were progressing and he should remain in the Conservative caucus.Less than a week later,the premier was calling on all MPs to reject the federal budget in Tuesday's final vote, which would mean expulsion from the caucus.

Liberal Leader Stephen MacNeil said Nova Scotians want the offshore deal they were promised two years ago, so by continuing to negotiate with the federal government, the premier is sending the message that Nova Scotia will accept changes.

But the federal Conservatives are suggesting that they won't be making any changes.

Finance Minister Jim Flaherty said Nova Scotia will not be able to pocket new richer equalization payments and keep all of its offshore wealth.

Meanwhile, Atlantic MPs in the Conservative caucus say they have received assurances that there will be no net loss to Nova Scotia, and Newfoundland and Labrador because of changes in equalization.

Now that the budget has passed in the House of Commons, it will move on to the Senate.

A Liberal senator says the Liberal-dominatedUpper Chamberwill almost certainly challenge the government's budget over its handling of the Atlantic accords issue.