For the first time in a decade Ontario will not receive an equalization transfer from Ottawa, according to Finance Minister Vic Fedeli, who said the province contributed CDN $8 billion into equalization and urged the federal government to review the equalization program.
Canada’s provincial finance ministers are currently meeting in Ottawa for the second of the bi-annual meetings, where federal Finance Minister Bill Morneau released the money Ottawa will transfer to the provinces and territories in 2019 – 2020, including nearly CAD $20 billion in equalization transfer payments.
These equalization payments are up CAD $880 million from the current year, split among five “have-not” provinces: Quebec, Manitoba, Nova Scotia, Prince Edward Island, and New Brunswick. Since the 2008 recession, Ontario was on the “have-not province” list. Quebec will be getting more than CAD $13 billion, an increase of nearly CAD $1.4 billion.
Ontario’s government was aware it would not be qualifying this year for equalization and Minister Fedeli said it’s further proof of why the equalization program needs an overhaul, when Ontario will contribute CAD $8 billion into equalization and give Ottawa CAD $12.9 billion more in taxes than it will receive from federal spending, he said. Other “have provinces” Alberta, Saskatchewan, and Newfoundland have also called for changes to the formula. Minister Morneau said the formula was renewed earlier this year for a five-year period after extensive discussions from his department but he knows the formula will be raised at the table.