Source: The Canadian Press

Ottawa and Quebec signed a tax-harmonization deal on Friday that will give the province more than $2 billion.

Prime Minister Stephen Harper and Premier Jean Charest made the announcement at a joint news conference in Quebec City.

Charest hailed the deal as “very important” for Quebec.

“It is important economically and also for job creation,” he said.

Harper said the deal is similar in most ways to those signed with other provinces.

The prime minister lauded the agreement as further evidence that federalism works well.

“Quebec wanted a harmonization agreement, we worked together to make it happen, and it is now in place,” Harper said.

“This is a fine example of federalism working as it should.”

The province had been seeking $2.2 billion in compensation for agreeing to combine the GST with its provincial sales tax nearly 20 years ago.

The Tories promised during the federal election campaign last spring to settle the matter by mid-September.

But the deadline was later extended until the end of the month to work out technical details.

One potential sticking point was whether Quebec could be compensated for harmonizing its provincial sales tax with the federal GST, while still collecting the tax itself.

The failure to reach a deal was a political lightning rod for Quebec sovereigntists over the years, with the Parti Quebecois and the Bloc Quebecois constantly berating their federalist foes.

Ontario and British Columbia received federal transfer payments for implementing the HST.

British Columbia has to return the $1.6 billion in transition funding after voters killed the province’s HST in an August referendum.

Ontario received $4.3 billion from Ottawa after moving to the HST in 2010.