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Ottawa – for the first time in a decade Ontario will not get an Equalization transfer from Ottawa, promoting the government's finance minister to join calls for the federal government to review how the program is set.
Canada's financial ministers are in Ottawa for the second of their two yearly meetings that began with a working dinner at an Ottawa Hotel Sunday Night.
Just before the dinner, the Federal Finance Minister Bill Morneau released publicly the amount of cash from Ottawa to transfer to the provinces and territories in 2019-20, including nearly $ 20 billion in equilibrium.
There is almost $ 880 million of the current year, but this amount will be divided between only five provinces – Quebec, Manitoba, Nova Scotia, Prince Edward Island and New Brunswick. For the first time since the launch of 2008 on the Ontario non-provincial list, Ontario is not among them.
Quebec on the other hand is getting more than $ 13 billion of this program, an increase of nearly 1.4 billion.
The economic growth of Technically Ontario is good enough in 2016-17 to push it out of having-not status, when a financial profits are significantly lower than the average and contains them for equalization. But because of the way the program works, Ontario has received $ 963 million in 2018-19.
We are certainly calling on the feeds for reviewing their federal transfer payments because we want to make sure that Ontario businesses and families are getting our beautiful parts
The government was well aware that it would not be qualifying this year for equalization, but Ontario Finance Minister Viktor Fédeli said it's next proof of what the equalization program needs to overhaul. He said Ontario would have contributed $ 8 billion in equality, and will not get anything from it. Overall Ontario will give Atlanta $ 12.9 billion more in taxes than it will receive from federal spending, he said.
"So we're certainly calling on the references for reviewing their federal transfer payments because we want to make sure that Ontario businesses and families get our beautiful share," said Fedely.
Alberta, Saskatchewan and Newfoundland have also called changes to the formula.
Morneau said that the formula was available earlier this year for a five-year period after extensive discussions from his Department but he knew the formula would be raised at the table.
"Ontario's moving out of that program is a reflection of sustained positive economic results in Ontario and I expect that is overall positive but it will almost certainly be a discussion," Morneau said.
Morneau relates that the program is just one of the ways in which Ottawa assisted provinces with their finances, pointing to a stabilization program that was universally and nephonald helped by a simple patch in the past year.
Ontario's moving out of this program is a reflection of sustained positive economic results in Ontario and I expect that is overall positive but it will almost certainly be a discussion
He also suggested that Ottawa's decision to spend $ 4.5 billion to buy the threshold mountain with a view to ensuring its expansion is another assistance program for the province, to try to help Alberta get challenges getting his oil to market. He did not mention the fact that the expansion was on hold of further environmental impediments and indigenous consultations after the federal court of Appeal rejected the original federal approval.
Quebec Financial Minister Eric Gierard said Quebec's 22 percent of Canada's population, but accounts for 19 percent of its economy, and that something newly elected government wants to change. Girard said the Coalition Avenir Quebec wants to see Quebec's need for equalization go down as it works to improve its economic standing, but said that will take some time.
Fedele also said, while carbon taxation was not on the agenda he would make sure it was discussed. Ontario and Saskatchewan are both challenging in Ottawa's plan to impose a carbon tax on their provinces next year.
Fedeli and Saskatchewan finance minister Donna Harpauer wrote Morneau last week asking him to do a thorough economic impact analysis of what the carbon tax will do, especially when it comes to the same time as businesses are going to pay more for Canada pension design containers. The long-planned CPP expansion kicks in next month, with contributions from employees and employers rising over the next five years so the program can increase profit payments.
Morneau has said that businessmen will see a fixed insurance premium at the same time, and said that Ottawa has returned revenues from the carbon tax to people, it should not be an economic impact.
With files from Andy Blackford
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