The federal government announced the signing of a $2.2-billion tax harmonization deal with Quebec Friday, 20 years after the province agreed to merge its sales tax with the GST.
According to the terms of the deal, the province will receive $733 million when the agreement is expected to take effect in January 2013, and $1.467 billion a year later.
Prime Minister Stephen Harper travelled to Quebec City to announce the deal with Quebec Premier Jean Charest, who called the agreement "very important" for the province.
"It is important economically and also for job creation," Charest said.
Harper pointed to the deal's completion as proof that federalism is strong in Quebec.
"Quebec wanted a harmonization agreement, we worked together to make it happen, and it is now in place," Harper said.
"This is a fine example of federalism working as it should."
The Conservatives put an agreement high on their priority list during the spring election campaign.
Quebec had been seeking compensation after agreeing to fold the GST into its provincial sales tax 20 years ago. Friday's announcement brought to an end years of bitterness on the part of sovereigntists, who long complained of a lack of a deal.
Both British Columbia and Ontario received federal funds in exchange for bringing in the HST. Ontario received about $4.3 billion from the federal government after implementing the HST in 2010.
However, B.C. must now return about $1.6 billion in federal funding after residents there repealed the tax in a referendum last August.
