A northern economic development fund is going to be in the next federal budget.

Premier and Finance Minister Dennis Fentie told reporters Friday of a promise made last week during a meeting in Ottawa.

Fentie and his fellow provincial and territorial finance ministers met in the nation's capital with federal Finance Minister Ralph Goodale.

Goodale promised Fentie a new economic development fund for the North would be a line item in the next federal budget.

The Yukon and the other two territories have been pushing the federal government for a number of years to establish a fund to help create jobs in the North.

While every other region in Canada except southern Ontario has some kind of economic development fund, the North has been left by Ottawa to fend for itself for a number of years.

When Prime Minister Paul Martin came to power in December, he named Yukon MP Larry Bagnell as the principal secretary to the minister of Indian and Northern Affairs with special responsibility for northern economic development.

Goodale was asked by the Star last month if he would at least consider putting a northern economic development fund in the new budget. He refused to answer the question.

This is the first commitment from Goodale, or any federal finance minister in the past few years, to put such a fund in the budget.

However, it is not known how much will actually be in the budget once Goodale tables it.

The Globe and Mail reported today that the budget will be tabled in late March, likely March 23.

Previous finance ministers, including Martin, have ignored the North's pleas for a fund similar to programs in regions like Atlantic Canada.

'We're cautiously optimistic and encouraged by what has been brought forward by the federal government,' Fentie said Friday.

Fentie said Goodale also promised to improve the formula financing program. Formula financing provides the territories with the largest transfer payments from Ottawa each year.

Another promise from the federal government, according to the premier, was a commitment to extend the extra health care money the territories were given last year.

In early 2003, after the three premiers refused to sign an agreement for new health care funding, Ottawa agreed to negotiate extra money for the territories.

The territories argued at the time that the funding they receive for health care based on population is not good for the North with a small number of people spread over a vast amount of land.

Ottawa agreed to give each premier an extra $20 million over three years.

'It's a commitment to extend that fund beyond the three year-term.

However, the premier did not know if the $6.67 million per year currently being received will be extended or if it will be a different total. The actual figures will be hashed out at a later date.

The premier also said Goodale promised to change part of how the territory's funding is calculated by Ottawa.

The alteration won't make a big difference right away but Fentie said it could mean more money for the Yukon from the federal government in the future.

Fentie's positive take on the meeting with Goodale contrasts with the opinions of the provincial finance ministers who were not pleased with the meeting and rejected Ottawa's offer to increase the equalization payments.

Fentie was to meet today and tomorrow with his fellow premiers in the first meeting of the new council of the federation. The council is the new structure that has been set up for meetings with the territorial and provincial premiers.