Nova Scotia's Premier Rodney MacDonald wants all the province's MPs to vote against the federal budget that alters his province's deal on offshore resources.

In addition, the Conservative would like the Senate to hold up passage of the 2007 budget.

MacDonald said Sunday that a letter from federal Finance Minister Jim Flaherty published in a Nova Scotia newspaper prompted his move.

Flaherty said in the letter that the government is not making any side deals on the Atlantic Accord just to win a few votes.

"It became clear that he was determined to undermine these efforts and undermine our good faith discussions. Mr. Flaherty has turned his back on Nova Scotians, and our quiet talks are about to get a whole lot louder," MacDonald said.

Nova Scotia has 11 MPs, two of whom are Conservatives.

Last week, Bill Casey, a four-term Conservative MP from Nova Scotia, got kicked out of the Conservative caucus after voting against a procedural motion related to the budget. He now sits as an independent Progressive Conservative.

He said the government is not honouring a signed contract.

"You hear the Finance Minister and other ministers say the Atlantic Accord is exactly the way as it was when it was written, but it isn't," Casey told CTV's Question Period.

"And I just refer you to the budget that says section 220 of the Atlantic Accord Implementation Act is replaced by the following, and there's just paragraph after paragraph ... And yet every day the Minister of Finance stands up and says the accord is not touched."

The 2005 Atlantic Accord, a deal signed by the then-Liberal government between the governments of Nova Scotia and Newfoundland and Labrador, protects those two provinces from having their offshore oil and gas royalties clawed back under the federal equalization plan.

However, to accept an enriched equalization deal, they have to abandon the accord.

"Nova Scotia has opted into the new equalization formula for this year and gained an extra $95 million in federal transfers. That's $95 million more to fund the priorities that matter to the residents of Nova Scotia, such as health care, education and infrastructure like roads, harbours and public transit," Flaherty said in his letter.

Casey has said that the new formula could cost his province up to $1 billion over the accord's 15-year term.

Conservative fortunes in the Atlantic region are eroding. while the party had 39 per cent support in a Corporate Research Associates poll in February, that dropped to 30 per cent in May. That poll was taken before Casey got turfed.

"Look, you have no idea how important this issue is to Atlantic Canada. It was our special deal and it is a special deal," Casey said.

Saskatchewan's anger

Saskatchewan's provincial NDP government has also been locked in a dispute over resource revenue and equalization with Ottawa.

"People in Saskatchewan are wondering where are the 12 Conservative MPs that we elected to speak on behalf of our province," Premier Lorne Calvert told Question Period.

He was also suspicious of the talks between the feds and Nova Scotia. "It is becoming like 'Alice in Wonderland'. It gets curiouser and curiouser," Calvert said.

"On Friday, Finance Minister Flaherty sends out a letter to the editors of Saskatchewan saying there are no negotiations, there will be no side deals. I read in the press yesterday that the Premier of Nova Scotia is, in fact, negotiating, by his own words, he's negotiating a deal for Nova Scotia."

Calvert and Danny Williams, the N.L. premier, have tried to maintain a united front against the feds.

Asked if he was worried the feds were trying a divide-and-conquer strategy, Calvert said, "It may be a strategy that they are using."

Nova Scotia is trying to regain what it had before the federal budget and equalization changes in March, he said.

Saskatchewan is affected because while provinces can remove oil and gas revenue from the equalization formula, a cap could then be placed on the amount of money paid out.

Calvert has said the move has cost his province hundreds of millions of dollars.

While Saskatchewan is currently enjoying an energy-driven boom, the province has usually been a 'have-not province, entitling it to equalization money to ensure that it can offer comparable services at comparable rates of taxation to other provinces.

The federal government made a promise, Calvert said. "When you make a promise, you better keep your promise. No, we don't need side deals, we just need the prime minister and the Conservative government to keep their promise."

The final vote on the budget is expected to be one of the last major acts of this session of Parliament, although it could go as late as June 22.

With a report from CTV's David Akin and files from The Canadian Press