MONTREAL — Quebec says it's making progress in getting compensation from the federal government for agreeing to merge the federal GST with the provincial sales tax.

Quebec is seeking $2 billion in compensation for agreeing to a harmonized sales tax in 1992.

A spokeswoman for the province's finance minister says negotiations have progressed and a draft agreement has been sent to the federal government.

A spokesman for Finance Minister Jim Flaherty says discussions are ongoing but some points still remain unresolved and there's a fair bit more work to do.

Bloc Quebecois Leader Gilles Duceppe has repeatedly said he will vote against this week's federal budget if it doesn't include compensation.

The Conservative government needs the support of at least one opposition party to avoid an election.

Duceppe argues Quebec harmonized its sales tax nearly 20 years ago but has not seen any compensation from the federal government, unlike Ontario and British Columbia which recently implemented the measure.