Financial problems for Ontario?

[Lonestar]

Link

Ontario to receive equalization payments

Finance Minister Jim Flaherty said Ontario will receive equalization payments for the first time in its history next year, and that the amount will be “more” than Premier Dalton McGuinty's government is anticipating.

“Ontario will be very happy with the figure I give them,” Mr. Flaherty told reporters on his way into a meeting with his provincial and territorial counterparts Monday. “It will be more than they expect.”

The 51-year-old equalization program will be the focal point of the gathering, which is scheduled to end around noon at a hotel near Toronto's Pearson airport. Mr. Flaherty revealed last week that he will take steps to rein in payments, which the minister says are growing at an unsustainable pace of about 15 per cent a year.

Mr. Flaherty, who is facing the first federal budget deficit in more than a decade, declined to provide details of how he will restrain the growth of the equalization program, which seeks to redistribute Canada's wealth to poorer regions from the richer ones.

The program paid $13.6-billion in the current fiscal year to all provinces except Ontario, British Columbia, Saskatchewan and Alberta.

One of the reasons Mr. Flaherty is seeking to rework the program is to account for Ontario's tumble into the group of provinces that will receive payments. The economy of Canada's largest province is being battered by the global financial crisis and a recession in the United States, events that have destroyed demand for Ontario's factory exports.

Ontario Finance Minister Dwight Duncan kept up his government's feud with the federal government, suggesting he thinks Mr. Flaherty's goal is keep the province from receiving equalization payments – despite the federal minister's repeated assertions to the contrary.

“I don't have the sense they get it in terms of Ontario,” Mr. Duncan told reporters.

Mr. Duncan said Mr. Flaherty still hadn't told him any details about the changes in store for the equalization program.

“If you want to have a serious dialogue, you might put a piece of paper in our hands beforehand,” Mr. Duncan said. “We'll receive the proposal. We won't be able to respond today.”

Mr. Duncan risks becoming isolated at the meeting, as many of his colleagues were taking a more collegial tone ahead of their latest meeting. Like Mr. Duncan, finance ministers from Nova Scotia, Prince Edward Island, New Brunswick and Manitoba said in interviews Friday that they were waiting to hear what Mr. Flaherty has in mind for the equalization program.

But while apprehensive about the possibility of lower equalization payments, all four ministers expressed sympathy for Mr. Flaherty's predicament and said they would enter today's meeting with an open mind.

“I can sympathize with what the minister is going through; everyone is going to have to do a little bit of belt tightening,” New Brunswick Finance Minister Victor Boudreau said. “So long as everyone is treated fairly, I'll be okay with that.”

Mr. Flaherty told reporters last week that he wasn't planning to “review” the equalization program, which was overhauled in 2007 after an extensive study by a panel led by Al O'Brien, a former Alberta deputy finance minister.

“We want to make sure that's not a program that gets bent out shape because that's a program that just got put back in shape,” Manitoba Finance Minister Greg Selinger said. “But there's been nothing put on the table, so we have to keep an open mind and find a way to co-operate together.”

PEI Finance Minister Wesley Sheridan acknowledged that Mr. Flaherty's concern over equalization is rooted in the possibility that Ontario might end up drawing from the program. “Once that happens, the cost of equalization grows dramatically,” Mr. Sheridan said.

Nova Scotia Finance Minister Michael Baker said he was unsure about Mr. Flaherty's assertion that the equalization program is growing at an unsustainable rate, since his province is due to receive decreased payments.

“This is a constitutionally mandated program,” Mr. Baker said. “I certainly appreciate the difficult times his budget is in, but it is important to remember that the equalization is just that, a constitutionally mandated program.”

A poster on another board said that the NCF Funding comes exclusively from the Western Provinces...is oil money riding to the rescue?

[open_sketchbook]

Oil money coming to the rescue because so much of Ontario's money goes to Quebec, really.

[Darth Wong]

Ontario has a manufacturing economy, so our economy is obviously suffering right now. This was not unexpected, and it's more than overdue for Ottawa to finally recognize that. Let's see what they actually do.

[Ekiqa]

Ontario has a manufacturing economy, so our economy is obviously suffering right now. This was not unexpected, and it's more than overdue for Ottawa to finally recognize that. Let's see what they actually do.

I'm surprised they're actually giving us the money.

Ontario first qualified for equalization payments back in '82, but they changed the system, and every other time we've qualified, they've changed it again.

[Phantasee]

Ontario has a manufacturing economy, so our economy is obviously suffering right now. This was not unexpected, and it's more than overdue for Ottawa to finally recognize that. Let's see what they actually do.

I'm surprised they're actually giving us the money.

Ontario first qualified for equalization payments back in '82, but they changed the system, and every other time we've qualified, they've changed it again.

I don't think you've been this fucked before. Usually the oil prices crashed and Canada didn't have anything coming from Alberta. IIRC we didn't give much, mostly received for a number of years. Now that we have some extra dough to share, Ontario has a chance to actually get something.