The funding follows a scathing report by the federal auditor general into the state of the country's search-and-rescue system.
The new project will standardize radio communication for 25 search-and-rescue teams in the province.
It will also bring all four Atlantic provinces in line for radio capabilities while ensuring the systems can interact.
MacKay also offered qualified support for a provincial inquiry into search and rescue, saying Ottawa is prepared to work with its partners.
Premier Kathy Dunderdale has fended off repeated calls for a public inquiry, saying the time for study is over and it's time for Ottawa to act on improvements.