Finance Minister Joe Oliver is compiling a perfect record when it comes to dealing with Ontario and its government. In his three and a half months on the job, he has missed no opportunity to berate and insult the province.
The latest salvo came late last week in the form of an article by the minister in the Financial Post. He dismissed arguments by Ontario’s Liberal government that the province is receiving less than its fair share of federal money as “both false and sad.”
As usual, Oliver didn’t bother to engage with the actual facts of the situation. It’s a tedious and hideously complex subject – but the bottom line is that Ontario is being handed the dirty end of the stick when it comes to fiscal transfers from Ottawa.
It’s not just an abstract concern. The rigged system costs Ontario a lot of money – about $11 billion a year by one authoritative estimate – and that has a serious impact on ordinary people. It means leaner services and much more pressure on the province to cut back even further or raise taxes to do away with its $12.5-billion deficit.
Oliver did throw out some numbers in his Financial Post article. Transfer payments to all provinces will be a record $65 billion this year, up 56 per cent since the Conservatives were elected eight years ago. And, he wrote, federal funding to Ontario “has increased to a record $19.2 billion, up 76 per cent since we took office in 2006.”
Declared Oliver: “The numbers speak for themselves.” In fact, they don’t.
As Matthew Mendelsohn, director of the respected Mowat Centre, points out, a big part of the rise in federal transfers is due to the extension of the Canada Health Accord, which provided for annual 6-per-cent increases in health transfers. Essentially, Oliver is taking credit on behalf of the Harper government for the fact that it extended a deal worked out by the previous Liberal government of Paul Martin.
It’s the Mowat Centre which calculated last year that the whole gamut of federal transfers – everything from the way Employment Insurance is structured to where money for infrastructure upgrades is spent – leaves Ontario short by some $11 billion a year.
But the main point of contention between Ontario and Ottawa is the equalization system, designed to ensure comparable services between richer and poorer parts of Canada. Ontario became eligible for payments in 2009, during the financial crisis, when the province’s manufacturing economy was hit hard.
Oliver writes that the equalization system “operates on a mathematical formula,” as if it was a force akin to gravity beyond the reach of human or political manipulation. In fact, it has been tweaked many times, often to the detriment of Ontario. The latest confirmation of that came in June from the Parliamentary Budget Officer, who issued a report saying Ontario is being shortchanged to the tune of $1.2 billion.
Oliver mocks Ontario for slipping into “have-not” status, and implies that it’s a result of fiscal profligacy by the McGuinty and Wynne governments, or just a refusal to try hard enough. Forget the enormous structural challenges facing the province; forget the fact that Ontario isn’t fortunate enough to benefit from the oil-and-gas commodity boom. Here’s Oliver’s solution to what ails us: “The best approach forward for
Ontario is to resume its role as an economic engine of Canada.”
Thanks much, minister. Don’t know why we didn’t think of that before.
As MP for Eglinton-Lawrence and a veteran of Bay Street, Oliver is ideally situated to think about the serious challenges facing Ontario. That makes his dismissive attitude and failure to address the real issues all the more disappointing – and looking all the more like simple political posturing by the Harper government.
Finance Minister Joe Oliver should stop blaming Ontario