Newfoundland and Labrador drops lawsuit challenging federal equalization program

Newfoundland and Labrador Premier Tony Wakeham talks during a news conference at the Confederation Building in St. John’s on Tuesday, May 19, 2026. THE CANADIAN PRESS/Paul Daly

ST. JOHN’S — The Newfoundland and Labrador government has dropped a lawsuit challenging 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 Progressive Conservative government confirmed that it had abandoned the suit.

A statement from Premier Tony Wakeham’s office says he wants to build a collaborative and constructive relationship with the federal government.

Wakeham has applauded Liberal Prime Minister Mark Carney several times since taking office last fall, including for Ottawa’s support for Newfoundland and Labrador’s oil industry.

His move to scrap the lawsuit was celebrated by the Canadian Taxpayers Federation, which said the public would have been on the hook for any beefed up payments to Newfoundland and Labrador.

This report by The Canadian Press was first published May 29, 2026.