PBO says Ottawa is shortchanging Ontario

Harper government insists Ontario receives its fair share

OTTAWA — The Parliamentary Budget Officer says changes to federal equalization payments makes Ontario the big loser among provinces, while Quebec, Nova Scotia and New Brunswick gain double-digit increases.

The report finds total equalization payments transfers from Ottawa to the provinces and territories rose about 3.5 per cent this fiscal year.

But the distribution is wildly different from province to province, with Ontario seeing a 37.3 per cent decline, or about $1.2 billion.

Meanwhile, Quebec will see transfers under the program increase 17.5 per cent, Nova Scotia, 11.5 per cent, and New Brunswick by 10.2 per cent.

The report notes that the federal government this year chose to stop a program ensuring no province receives less in a given fiscal year in combined transfers than it received in previous years.

The PBO says Ontario would have been the only province to qualify in 2014-15, hence has missed out on $640 million in revenues.

The Ontario Liberal government has been vocal in complaining that Ottawa is shortchanging the province, but the federal government has said it has been fair in calculating transfers.

During the election campaign that delivered Premier Kathleen Wynne a majority government last week, the provincial Liberals accused Ottawa of slashing Ontario’s latest share of equalization payments by $641 million.

The Harper government has long insisted Ontario was receiving its fair share, based on the performance of the province’s economy.

Finance Minister Joe Oliver, who happened to be taking part in a video teleconference Wednesday with his provincial counterparts, said he does not believe there’s a fiscal imbalance.

The issue did not come up during the brief meeting, which was Oliver’s first with the provincial finance ministers since he was named to the post in March. Disparities between provincial and federal numbers are often “exaggerated,” he said.

“We just recently came to an agreement on those numbers; we’re not cutting back,” he added, noting that transfers had increased by 55 per cent to $65 billion since the federal Conservatives came to power in 2006.

Oliver described the meeting as cordial, even hinting that he was making peace with Ontario’s Liberal government. While he may disagree with them on key economic issues, the voters have spoken, he said.

He did say, however, that he disagrees with Ontario’s budget, which raises taxes and the province’s already substantial $12.5-billion deficit, as well as a plan to create an add-on to the Canada Pension Plan.

“The new government ran on their budget, they were elected, they are entitled in a democracy to implement their platform,” he said.

“We have a certain policy and maybe this isn’t the time to emphasize differences.”

Oliver related the same sentiment on the issue of CPP enhancement, saying if Ontario wants to go it alone Ottawa won’t try to stop them, although he said he expressed reservations about what he estimated would be a $3.5-billion price tag.

Ontario and P.E.I. have lead a provincial push to enhance the Canada Pension Plan, but the federal government has said the economy is too weak to saddle employees and employers with higher premiums.

In an email response, Ontario Finance Minister Charles Sousa said he plans to go ahead with the plan that was endorsed by the voters on June 12.

“We hope that they come to the table on a transit strategy, investment in the Ring of Fire (mineral extraction project in northern Ontario) and retirement income security,” he said.

Harper government ministers have been critical of Ontario’s Liberal government in the past — particularly during the latest campaign.

Oliver went so far as to say deficits and debt levels in Ontario and Quebec — Canada’s two most populous provinces — were holding back Canada’s economic growth.

He made clear, however, that his government intends to go in a different direction by lowering taxes, likely starting next year after it tables the first surplus budget in almost a decade.

“After we balance the budget the No. 1 priority will be further tax relief,” he said. “(Canadians) understand that taxes stifle prosperity, hurt businesses and kill jobs.”

The federal Conservatives are expected to introduce some form of income splitting for families with young children next year, fulfilling a 2011 campaign pledge to bring in the $2.5-billion tax relief measure once the deficit was eliminated.




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PBO says Ottawa is shortchanging Ontario

  1. Maybe they should make it a priority to pay back some of the $150 billion in debt they added to the pile, rather than immediately putting Ottawa back into a structural deficit by lowering taxes. If they want to reduce taxes, they should continue to cut spending.

    • Andrew,

      Any time a conservative governments cuts spending…the usual suspects come out of the woodwork to protest.

      the deficit is gone…..and debt can now be re-paid, albeit it will be slower if they go ahead with income splitting.

      • Really Richard? What’s the difference? It’s money owed by you and me and those next generations that conservatives are always swearing they don’t want to burden.

        Harper’s 2015 campaign slogan “No deficit, more debt.”

        BTW The deficit is not gone.

  2. As Wynne pointed out….Ottawa is doing deliberate damage to Ontario, and it has to stop.

    Killing the goose that laid the golden egg is sheer stupidity.

    Thank goodness the voters replied so forcefully.

    • And lets hope they(Ontarians)vote as forceful in the next federal election against the cons.

    • EmilyOne wrote:
      “As Wynne pointed out….Ottawa is doing deliberate damage to Ontario, and it has to stop.”

      Are you serious, Emily?

      The deliberate damage to Ontario began under McGinty, and will continue under Wynne. give you head a shake.

      • This is Harper’s own PBO guy!

        What have you got to say about him?

        Kathleen was right as usual.

      • McGinty’s is an Irish Pub in Edmonton and Kathleen’s neither an Albertan nor much of a drinker.

      • Yer brother James is that ashamed to show his face on here again, eh ‘Richard’?

        Ontario prefers Wynne and the Libs. Get over it.

  3. Harper beares grudges from childhood

    The truth of the story behind the making of our great leader, our genius in office, our strategic master, is nothing but the story of a megalomaniac with a malignant narcissism, unable to get over his childhood to the point it becomes part of the greater pack of lies his administration is building itself upon, a grudge-bearing nerd who in his attempt to cover up any reminder of his own nerdish leanings goes a little too far in trying to categorize his opponents as such.

    What we have here is an immature and conscienceless man who is using this country as an experiment for a university paper (and ensuing attention) he can’t get over, and for the ongoing attention he discovered after writing that paper which led to meeting the people who secured his success in politics, allowing him to simultaneously indulge his megalomania while holding fast to his grudges and punishing those who treated him badly in his erased history. This is a story about a radical Christian who denies his beliefs in order to win over what he shows with disdain is the moderate majority, who has bought into a story of a political parousia that includes Canada as the landing strip for Jesus’ triumphant return to Earth.

    http://www.metaball.ca/2008/ball_Mar-08/0308_01.html

    • Your link is not working Nadine.

  4. “The fiscal projections indicate that over the next five years the IMF staff project federal deficits of $144-billion; PBO is projecting $139-billion; and Finance Canada is projecting $107-billion. Like PBO, the IMF is projecting deficits each year over the next five years. Like the PBO, the IMF is saying there is a structural federal deficit in Canada – meaning that even when Canada gets back to its estimated potential economic output level, there will be a deficit,” he wrote in a lengthy email.

    “These projections and analysis are at odds with Minister Flaherty’s position which states there is a plan in place to achieve balance and there is no structural deficit,” he said, adding that parliamentarians need to debate the government’s plan in “the context of fiscal unsustainability.”

    http://www.theglobeandmail.com/news/politics/ottawa-notebook/budget-watchdog-returns-fire-while-tories-fatten-war-chest/article1891275/

    dg sdfvsdfve

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