Ottawa defends amount of transfer payments to Ontario

Ottawa says it has been more than generous to Ontario despite a University of Toronto think tank report that says the province is being shortchanged $11 billion in transfer payments.

Dan Miles, a spokesman for federal Finance Minister Jim Flaherty, said that the $20 billion the federal government transfers to Ontario is an all-time high.

“This represents a whopping nearly 80 per cent increase from under the old Liberal federal government, including almost $3.2 billion through Equalization, $12 billion through the Canada Health Transfer, and $4.7 billion through the Canada Social Transfer,” Miles said in a statement to the Star Monday.

“The record high support for Ontario clearly shows the transfer system has been reformed to treat all provinces — especially Ontario — more equitably than ever before.”

But the Mowat Centre’s 14-page report, first reported by the Star, says the “have-not” province is being asked to carry a financial burden that is “out of line.”

The report calls for changes to the federal equalization program, which is designed to take money from wealthier provinces and redistribute it to their poorer provincial cousins so that programs are roughly the same across the country.

Miles says changes have already been made to the program.

“Shortly after forming government, we addressed two of Ontario’s long-standing requests regarding federal support in 2007 by moving to equal per capita support for provincial transfers and including a fiscal capacity cap in equalization,” he stated.

In fact, Miles said, former premier Dalton McGuinty “applauded our approach as the right approach for Ontario and all of Canada.”

Intergovernmental Affairs Minister Laurel Broten said Ontario, which is wrestling with an $11.9-billion deficit, is sending more money to Ottawa than it is getting in funding and services.

“This latest report form the Mowat Centre provides further evidence why we have said as a government that we need to modernize our fiscal arrangement . . . between the federal government and the provinces,” Broten told the Star.

Broten said this will be a topic of conservation at this year’s Council of the Federation, a gathering of premiers being held this summer at Niagara-on-the-Lake, Ont., July 24-26.

“We need to take a look at as a country on how are we dividing up the resources that taxpayers provide to both the federal government and the provinces,” she said.

Original Article
Source: thestar.com
Author: Richard J. Brennan