CHARLOTTETOWN — Federal Finance Minister Jim Flaherty says an attack ad launched by Newfoundland Premier Danny Williams is factually wrong and the premier should correct it.

Flaherty said there is no cap on oil and gas revenues East Coast provinces can receive as a result of the Atlantic Accord, despite what Williams is claiming, and he said no promises were broken.

Print ads paid for by Newfoundland began appearing Wednesday across the country accusing Prime Minister Stephen Harper of breaking a pledge to exclude non-renewable resource revenue from the equalization formula -- a move that would give larger payments to Newfoundland and Nova Scotia.

Williams says that promise was broken in last week's federal budget, which reworked the formula to include 50 per cent of non-renewable resource revenues in the calculation.

"The Atlantic Accord is the same today as it was a month ago,'' Flaherty said Thursday in Charlottetown.

"Newfoundland and Labrador can continue with their Atlantic Accord. We've offered them something additional, a different equalization program that in fact is better and will put more money in the pockets of that government if they choose to take it, but they don't have to take it.''

"But for him (Williams) to say there's some kind of broken promise or some kind of change is just wrong and he should correct that,'' said the minister.

On Wednesday in the House of Commons, Harper called the ads confrontation for the sake of confrontation.

The Nova Scotia government says it was forced to opt into the new equalization formula when it tabled its budget last week.

But Flaherty said Nova Scotia can opt out of the new formula.

"What we did, is agree they could come into the new equalization formula, which helped them balance their budget last Friday, and if upon reflection over the next year they decide they'd rather go back to the Atlantic Accord they can do that as well. It gives more breathing space to the government of Nova Scotia,'' he said.

Flaherty's comments came as he toured a cabinet making facility in Charlottetown with Prince Edward Island Premier Pat Binns.

The Island's Conservative premier has been openly supportive of the new equalization formula, saying it provides predictable funding for his province.

"We know what we have for this year, what we're going to have for next year. We can plan, we can budget, and we can do things,'' said Binns.

When Flaherty released his federal budget he declared the issue of fiscal imbalance with the provinces solved, thanks to his budget.

Despite the growing opposition from a number of provinces, Flaherty said he doesn't regret making the statement.

"Most of the provinces are supportive of what we've done, and all of the territories are, representing at least 75 per cent of the population of Canada, so I think we've done pretty well,'' Flaherty said.

"I didn't think we'd do much better than that because the provinces themselves can't agree, so you know there are going to be some dissenting voices...some more vigorous than others.''