The Manitoba government's refusal to sign a health funding agreement with the federal government could sink federal funding earmarked for a multi-million dollar high tech project in Manitoba.

The proposed Factory of the Future facility is being spearheaded by the National Research Council and would work closely with the private sector on the digitization of industrial processes. The previous federal Conservative government committed $60 million for a facility in Winnipeg, a commitment the Liberal government maintained in its first budget.

It appears, however, federal funding for that project may be jeopardy based on Manitoba's refusal to sign a health deal with Ottawa.

"What has been really disappointing in all of this is the federal government's attempt to threaten Manitoba by saying they were going to break previous agreements to support our aerospace industry, and they are threatening to take away a $60 million project. That threat is not something we take lightly."

Pallister says the Trudeau government's funding offer reduces the growth is health transfers by 50 per cent is not sustainable.

"We had a deal for many years that said the federal government would pay one-in-four dollars for health care. In Manitoba, that's down to 19 per cent and its going to get a lot lower in future years."
 
The premier argues threats should never be part of a negotiation, and as long as it remains on the table any progress on a health funding deal is going to be difficult to achieve.

"I think any common sense person would not expect me to give in to the federal government under a threat. When they take that threat off the table, we'll be able to move ahead with a better discussion and perhaps reach a resolution on this important issue, but we will never give into threats."

Pallister has indicated two main issues that he wants addressed by the federal government before signing a deal. Those issues include the disparity of health care between indigenous and non-indigenous Manitobans, and funding for diabetes.