VANCOUVER — A meeting of Canada's finance ministers ended Friday without any apparent movement on the contentious issue of equalization, leaving the provincial ministers still waiting for clarity from Ottawa on the federal program.

Federal Finance Minister Jim Flaherty said he has not come to a conclusion about equalization, but the Tories intend to move forward in their next budget.

"We intend to move forward in Budget 2007 with a principled approach to equalization and deal with the fiscal transfers," Flaherty said after the two-day meeting ended.

The minister said he heard the concerns raised by the provinces.

"There are some fundamental differences of opinion among the provinces that I did not expect to see resolved, nor were they resolved," he said.

"But they were aired in a very, as I say, collegial and agreeable way and where there is disagreement it was expressed in a principled way."

The provinces are split on the funding formula for equalization and whether some of the have-not provinces' newfound resource wealth should be counted.

Flaherty and the 13 provincial and territorial finance ministers gathered in Vancouver in the hope of finding an agreement on reforming the $12-billion equalization program.

Equalization reform was part of the Conservative government's election promise to fix the so-called fiscal imbalance between Ottawa and the provinces.

The other key aspect is to boost per capita transfer payments to all provinces for health, post-secondary education and other social services.

Flaherty has promised to deliver his remedy for the fiscal imbalance in his next budget, which could trigger a spring election.

A report by former Alberta deputy finance minister Al O'Brien proposed hiking equalization payments to poorer provinces by almost $900 million a year and basing payments on the average fiscal capacity of all 10 provinces, including 50 per cent of their renewable and non-renewable resource revenues. Currently, only five provinces are included in the formula.

Flaherty said he "remains committed to a principle-based long-term predictable funding formula for equalization" and that the O'Brien report was a "principled-based" approach.

However, several provinces have raised concerns about the report, including Saskatchewan, which has argued that if oil revenues are factored in, its equalization payments will drop significantly.

Likewise, British Columbia is concerned about suggestions that property values be made part of the formula.

The finance ministers are scheduled to meet again in Quebec City in June.

Ontario Finance Minister Greg Sorbara said he raised his concerns of his province's hard-hit manufacturing sector and what he called the fiscal machinery that he says needs to be fixed.

"I think there was some receptiveness there on behalf of the federal minister and I think my colleagues had a much better understanding of the circumstances," Sorbara said after the meeting.

"The reality is these meetings do not result in communiques about decisions that have been made."

However, Saskatchewan Finance Minister Andrew Thomson was disappointed by the meeting and that Flaherty made no announcement on a new equalization agreement.

"I'm not reassured at all by what I heard," Thomson said.

"We're told that something will be coming in the budget, I guess we'll wait and see about that."

The Finance Department also confirmed that income trusts that revert to corporate status will be able to do so without triggering capital gains taxes or other tax consequences.

A Finance Department statement late Friday also clarified that trusts will be allowed to at least double in market capitalization during the next four years without forfeiting their tax-free status.

A trust's market capitalization will be limited to growth of 40 per cent in 2007 and 20 per cent each year after that until 2011, when trust distributions become taxable at corporate rates.