Some provinces, like oil-rich Alberta, might not like what a new federally commissioned report on equalization recommends for the future of the program.

The panel of economists recommends including half of provincial non-renewable resources revenues in the formula, to help boost the $10.9 billion program by $887 million annually.

Alberta and Saskatchewan want to keep oil and gas revenues out of the formula for calculating payments to have-not provinces. They say the money is not sustainable.

Alberta Premier Ralph Klein has gone as far as to threaten to pull out of the federal government's equalization program if energy income is included. Saskatchewan Premier Lorne Calvert has made similar threats.

However, New Brunswick and Quebec want the resources revenues included.

"The provinces are meeting in Edmonton this week to thrash this out among themselves, and they're going to have some real hair-pulling," CTV's chief political correspondent Craig Oliver said.

Last week, Prime Minister Stephen Harper said it was his party's "preference" to follow through on a campaign promise to exclude resource revenue.

It's unclear how this report -- commissioned by the previous Liberal government -- will affect that position.

Ontario is ready to back demands not to include oil and gas revenues, and complains that more money shouldn't be added to a program that is already generous enough.

Ontario Premier Dalton McGuinty is on a cross-country tour to push his position that enhancing equalization is not the way to fix the fiscal imbalance.

He says the imbalance between Ottawa and the provinces should be corrected through increases to other federal transfers that pay out on a per-capita basis.

Currently, the federal government calculates the fiscal capacity of each province, then establishes a standard by averaging the capacity of five provinces: Quebec, Ontario, Manitoba, Saskatchewan and British Columbia.

Ontario, Alberta and Saskatchewan, the so-called "have" provinces -- are above the standard. But all other provinces fall below and receive equalization payments from federal coffers to ensure similar services nationwide.

In their investigations, panel chair Al O'Brien said almost everyone said the program "should be fixed not abandoned."

"Equalization reflects a distinctly Canadian commitment to fairness," O'Brien told a news conference Monday.

"It means that whether you live in Newfoundland and Labrador or British Columbia, you should have reasonably similar opportunities to get a good education, to access health care, social services and justice systems.

"And people in one part of the country shouldn't pay substantially higher taxes to support those services compared with their fellow Canadians in other parts of the country."

He also noted that a surprising amount of people knew little about the federal government's equalization program.

There were a total of two reports released today: Achieving a National Purpose: Putting Equalization Back on Track and Achieving a National Purpose: Improving Territorial Formula Financing and Strengthening the Territories.

Other recommendations:

• A cap should be implemented so that no province ends up with a fiscal capacity higher than that of the lowest non-receiving province.
• Equalization should be the main vehicle for equalizing fiscal capacity among provinces.
• The existing intergovernmental process should be retained and made more open and transparent rather than establishing a permanent independent commission.