MISSISSAUGA, Ont. -- The era of Ontario as Canada's economic engine sputtered and lurched to an ignominious end Monday while Newfoundland and Labrador, for too long the unwitting butt of an ongoing national joke, stepped into the economic spotlight to celebrate its status as the country's newest "have" province.

As Finance Minister Jim Flaherty officially moved Canada's largest province to the have-not side of the national ledger, Newfoundland Premier Danny Williams took time to declare the economic "Newfie joke" officially over.

The new found status of both provinces was made clear following a meeting between Federal Finance Minister Jim Flaherty and his provincial counterparts in which Ottawa redrafted the rules of equalization and tied future funding for the have-nots to the country's economic growth.

Ontario's fall is worrying and the state of the economy suggests the province will collect the payments for "some time," said Flaherty, whose Whitby-Oshawa riding, which plays host to a General Motors plant, has been hard hit by slumping auto sales.

"Of course it worries me... I don't rejoice at this," Flaherty said after emerging from the half-day meeting at a hotel at Toronto's airport.

"Regrettably, I expect that Ontario will be in the equalization program for some time to come. The manufacturing sector, the auto sector are weak. American consumer demand is weak."

Equalization payments are meant to ensure that have-not provinces are able to provide comparable services at taxation levels comparable to those in wealthy provinces.

Ontario, which qualified for equalization in the late 1970s but never collected, will receive $347 million next year.

Newfoundland and Labrador, for its part, said Monday it had officially become a "have-province" -- a year earlier than expected and for the first time in the province's history.

"I don't think the `Newfie joke' is there anymore," said Williams. "I think we're now an example to our fellow Canadians about how it can be done and how to work your way through hardship."

While Newfoundland and Labrador's fortunes are based on offshore oil revenues, Ontario has been hard hit by job losses in the manufacturing and auto sectors.

Alberta's top politician said his province is poised to assume Ontario's former title.

"We are the engine of the Canadian economy," said Premier Ed Stelmach, who will soon head to Europe to promote the oilsands.

Alberta, Saskatchewan and British Columbia are the other provinces that won't receive equalization.

Ontario Finance Minister Dwight Duncan disagreed with Flaherty's timeline, questioning just how long Ontario would qualify given the new arrangement.

"It looks to us, at first glance, like we won't qualify for very long based on the constraints they put on it," he said.

Duncan also said the provincial finance ministers were only given details of the new plan shortly before the end of the meeting, which didn't give them enough time to fully digest what the changes meant for each province.

"Every bit (of funding) helps," said Duncan, less than two weeks after announcing Ontario, once the country's economic powerhouse, will post a $500-million deficit this year.

Among the changes discussed Monday, Flaherty is promising a six per cent increase in health and three per cent increase in social transfers for all provinces.

Equalization will continue to grow year after year, Flaherty said, but that it cannot be sustained at the current 15 per cent growth each year. It will now be tied to real economic growth -- a concept which Flaherty said Canadians will understand.

"This is a benefit for Ontario," he said, adding that under the old rules Ontario would have received $100 million less.

"The system changes now, because Ontario now, for the first time in the history of our country, is going to be a recipient, so the calculations are different."

Under the new equalization plan, Quebec will get $8.35 billion, Manitoba $2.1 billion and P.E.I. $340 million in transfer payments. Nova Scotia will receive equalization payments of $1.57 billion and New Brunswick $1.69 billion.

Quebec Finance Minister Monique Jerome-Forget expressed concern for Ontario, saying in French that "if Ontario suffers, Quebec suffers because they are a big export and business partner."

Jerome-Forget said she didn't have enough information to gage how Quebec will be affected by the changes, but said she was "sympathetic" to the argument that 15 per cent a year growth wasn't sustainable.

"The story now is, how did he reach those numbers and what does it mean in the future?" she said.

For Saskatchewan, which is booming despite the country's economic woes, the main issues of interest were labour market and labour availability.

"We're investing heavily in infrastructure, so the discussions on expediting federal-provincial relationships on building Canada are important," said Rod Gantefoer, Saskatchewan's minister of finance.

"From Saskatchewan's point of view, we're glad to be on the other side of the equalization formula.

"It was a prideful day for us and we're going to continue to make sure that our economy grows so that we can stay as contributors to the program."

Monday's meeting was meant to lay the groundwork for a First Ministers' meeting on the economy with Prime Minister Stephen Harper in Ottawa next Monday. That meeting will prepare Canada for an economic summit of the 20 leading economies in Washington on Nov. 15.

The finance ministers have agreed to reconvene for another meeting by mid-December.