CORNER BROOK, N.L. — Canada's premiers appeared no closer to achieving consensus on the delicate issue of equalization as they gathered Tuesday in western Newfoundland for Day 1 of their annual meeting.

Despite assurances from some premiers they were willing to compromise, B.C. Premier Gordon Campbell dashed hopes for a quick deal by dismissing the idea of enhancing the federal funding program, as the so-called have-not provinces are demanding.

Instead, Campbell floated the idea of introducing a new federal tax cut as the best way to raise living standards across the country.

"I have very few taxpayers telling me that the primary objective that they've got is an equalization program,'' Campbell said before the premiers met to discuss closing the socio-economic gap between aboriginals and other Canadians.

"They wouldn't mind their paycheques growing. They wouldn't mind seeing that their quality of life could be improved by them making their own decisions.''

The $11-billion equalization program is used to redistribute federal funds to ensure Canada's poorer provinces -- only Alberta and Ontario are excluded -- can provide their citizens with a basic level of federal services at comparable tax levels. Saskatchewan and British Columbia teeter in and out of the program.

A recent report from an expert panel recommended that equalization payments should be based on revenues raised in all 10 provinces -- not just five -- including windfalls from non-renewable resources like oil, natural gas and mining. The proposed change would boost equalization payments to $15.1 billion a year.

But politicians in Ontario and Alberta have said they are opposed to such a move, and Campbell said Tuesday that any increase in equalization funding would unfairly target taxpayers.

"We've compromised relative to agreeing to a 10-province formula, but we have some concerns over the inclusion of resource revenues,'' Alberta Premier Ralph Klein said.

Quebec Premier Jean Charest, a proponent of boosting equalization payments, said the premiers had previously agreed that the equalization formula had to be changed.

"Now if other colleagues feel differently today, well, it will be for them I think to explain why they've changed their minds,'' Charest said.

Ontario Premier Dalton McGuinty, who toured Atlantic Canada last week in a bid to explain his opposition to enriching equalization, seemed to edge closer to compromise Tuesday.

"One of the benefits of physically removing yourself from your own province ... was you cannot help but gain a better understanding of their pressures, their issues, their commitment to improving quality of life and prosperity for their people,'' he said.

There is speculation McGuinty is prepared to concede to enriching equalization, but it remains unclear what he will ask for in return.

McGuinty had been pushing the other provinces to ask Ottawa to increase federal transfer payments on a per-capita basis.

The Ontario premier has said such a move would provide the fairest way to deal with the so-called fiscal imbalance.

The premiers maintain the federal government has more money than it needs to carry out its constitutional responsibilities while the provinces struggle to pay the escalating costs of their obligations to deliver health care and other social programs.

Charest has noted that Ontario, the province with the largest population, would be the biggest beneficiary of increased per capita transfers.

As a result, the shrinking have-not provinces on the East Coast are less enamoured with per-capita increases.

Federal Finance Minister Jim Flaherty has promised to deliver a plan by this fall that would revamp equalization -- with or without an agreement among the provinces.

Meantime, Nova Scotia Premier Rodney MacDonald said Tuesday he supports calculations based on a 10-province standard.

He added that the common goal of all premiers should be to ensure they have the means to provide citizens with the services they need.

"I'm hopeful that we can have some common ground ... I don't expect a final solution coming from the meetings,'' said MacDonald. "But if we can find common ground on a number of issues, that will be key.

"The last thing I want to see is the federal government making the final decision (on equalization) without proper input from the provinces.''