Majority of provinces crying wolf when it comes to finances, Flaherty says
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at 18:19 on March 9, 2006, EST.
By TARA BRAUTIGAM
WHITBY, Ont. (CP) - The majority of the provinces are in better financial shape than they let on when they complain about the amount of money they get from the federal government, federal Finance Minister Jim Flaherty said Thursday.
"There is somewhat of a myth (across) Canada that many provinces are in deficit, which of course is not so," Flaherty said after delivering his first speech as finance minister to the Whitby Chamber of Commerce in his riding east of Toronto.
Only Ontario and Prince Edward Island are currently operating in the red, Flaherty said.
"The majority of governments in Canada - the federal government, the territories and eight of the 10 provinces - have either balanced their budgets or (are) in surplus, and that's good to know as we enter into a discussion . . .to address this complex issue of fiscal imbalance."
In his speech, Flaherty offered few hints about the federal budget expected next month, save one: it will shave a percentage point off the GST, a key campaign promise that's expected to rob federal coffers of at least $4.5 billion a year. Some analysts have suggested the cost could be as much as $5.2 billion.
"This tax initiative is one of the prime minister's five main priorities and I can assure you that it will be front and centre when Parliament resumes this spring."
Flaherty also made it clear that while he'll be meeting separately in the coming weeks with his provincial counterparts - he's scheduled to talk Friday with Ontario Finance Minister Dwight Duncan - the fiscal imbalance won't be a priority for his first budget.
"This is not going to be a simple exercise," Flaherty said.
"The issue did not emerge overnight and will not be resolved overnight. However, the goal will be a comprehensive arrangement that will permanently address the fiscal imbalance."
Quebec and Ontario have been at the forefront of calls to re-examine the fiscal relationship with Ottawa on the grounds they provide significantly more tax revenue to the federal government than they get back in transfer payments and federal services.
"We can't do everything at once; we simply don't have the resources," Flaherty said. Provincial wish lists are simply too expensive and unsustainable, he added.
Financial analysts have voiced concerns that Ottawa will be unable to balance its books while paying for a long list of spending commitments the Conservatives made during the federal election campaign.
Flaherty, a former Ontario finance minister, said he will be watching closely when Canada's largest province tables its own budget in two weeks.
"We have to remember always of course that wealtprovinces in a progressive tax system will pay more in taxes than they get back," he said.
"That's true for all the better off and wealtprovinces in Canada."
Last month, Premier Dalton McGuinty reminded Prime Minister Stephen Harper that Ontario represents 40 per cent of the country's electorate and deserves the loudest voice in the debate over Canada's financial structure.
McGuinty is pushing for a royal commission into the fiscal imbalance, but other premiers have so far remained cool to the idea.
http://start.shaw.ca/start/enCA/News/NationalNewsArticle.htm?src=n030935A.xml
--------------------------------------------------------------------------------
at 18:19 on March 9, 2006, EST.
By TARA BRAUTIGAM
WHITBY, Ont. (CP) - The majority of the provinces are in better financial shape than they let on when they complain about the amount of money they get from the federal government, federal Finance Minister Jim Flaherty said Thursday.
"There is somewhat of a myth (across) Canada that many provinces are in deficit, which of course is not so," Flaherty said after delivering his first speech as finance minister to the Whitby Chamber of Commerce in his riding east of Toronto.
Only Ontario and Prince Edward Island are currently operating in the red, Flaherty said.
"The majority of governments in Canada - the federal government, the territories and eight of the 10 provinces - have either balanced their budgets or (are) in surplus, and that's good to know as we enter into a discussion . . .to address this complex issue of fiscal imbalance."
In his speech, Flaherty offered few hints about the federal budget expected next month, save one: it will shave a percentage point off the GST, a key campaign promise that's expected to rob federal coffers of at least $4.5 billion a year. Some analysts have suggested the cost could be as much as $5.2 billion.
"This tax initiative is one of the prime minister's five main priorities and I can assure you that it will be front and centre when Parliament resumes this spring."
Flaherty also made it clear that while he'll be meeting separately in the coming weeks with his provincial counterparts - he's scheduled to talk Friday with Ontario Finance Minister Dwight Duncan - the fiscal imbalance won't be a priority for his first budget.
"This is not going to be a simple exercise," Flaherty said.
"The issue did not emerge overnight and will not be resolved overnight. However, the goal will be a comprehensive arrangement that will permanently address the fiscal imbalance."
Quebec and Ontario have been at the forefront of calls to re-examine the fiscal relationship with Ottawa on the grounds they provide significantly more tax revenue to the federal government than they get back in transfer payments and federal services.
"We can't do everything at once; we simply don't have the resources," Flaherty said. Provincial wish lists are simply too expensive and unsustainable, he added.
Financial analysts have voiced concerns that Ottawa will be unable to balance its books while paying for a long list of spending commitments the Conservatives made during the federal election campaign.
Flaherty, a former Ontario finance minister, said he will be watching closely when Canada's largest province tables its own budget in two weeks.
"We have to remember always of course that wealtprovinces in a progressive tax system will pay more in taxes than they get back," he said.
"That's true for all the better off and wealtprovinces in Canada."
Last month, Premier Dalton McGuinty reminded Prime Minister Stephen Harper that Ontario represents 40 per cent of the country's electorate and deserves the loudest voice in the debate over Canada's financial structure.
McGuinty is pushing for a royal commission into the fiscal imbalance, but other premiers have so far remained cool to the idea.
http://start.shaw.ca/start/enCA/News/NationalNewsArticle.htm?src=n030935A.xml