Using equalization to fix so-called fiscal gap unfair to Ontario: McGuinty
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TORONTO (CP) - Equalization is forcing federal taxpayers in Ontario to help finance lower taxes and higher health and education spending in other provinces, where they don't get to enjoy the benefits, Premier Dalton McGuinty charged Wednesday.
McGuinty was responding to a recent report prepared for the premiers that recommends increasing equalization payments received by Canada's so-called have-not provinces as a way of fixing the fiscal imbalance.
That, however, would only worsen the injustice as far as Ontario is concerned, he said.
"We are now subsidizing lower levels of taxation in some equalization-receiving provinces than we have here in the province of Ontario," McGuinty said before a cabinet meeting.
"If we in the so-called have province have the lowest levels of funding for our colleges and universities, the second-lowest levels of funding for our hospitals, we have the lowest overall per capita program spending, and we're being asked to send more money elsewhere, that strikes me as patently unfair."
Alberta and Ontario are the only two have provinces that do not receive equalization payments, which are part of a system designed to more evenly distribute Canada's wealth among all of its residents.
Ontario calculates that its transfers to have-not provinces would increase by 28 per cent under the plan recommended by the other premiers, climbing to $6.3 billion from $4.9 billion. McGuinty said he intends to fight the plan.
"I have yet to see any evidence that would indicate that it's time for us right now to enrich equalization," he said. "That might happen in the future."
McGuinty said the gap between Ontario and the have-not provinces appears to be narrowing, which should mean they need less money under equalization, not more.
"The have-nots are in fact becoming wealthier, which is a good thing for all Canadians," McGuinty said.
"There really shouldn't be a reason for us to now put more into equalization if the gap is closing. It would make an argument, I would think, for moving in the other direction."
Deficit-plagued Ontario wants the federal government, which has been posting annual surpluses in the billions of dollars, to provide more money to the provinces for health and social transfers instead of using the equalization plan to address the fiscal imbalance.
The province calculates that federal taxes paid by Ontario residents account for 43 per cent of Ottawa's equalization payments, even though the province has only 39 per cent of the country's population and receives only 32 per cent of federal program spending.
Senior Ontario government officials said the province would get an additional $1.1 billion a year if it received the same per capita funding for health and social spending as do other provinces.
McGuinty also complained about a 3.5 per cent annual increase in equalization payments, which he described two years ago as a "reasonable accommodation," but now says was imposed against his will by Prime Minister Paul Martin.
Ontario's opposition parties pounced on his apparent about-face on the equalization agreement reached two years ago.
"It's rather galling," said New Democrat critic Gilles Bisson. "There he was singing the praises of the deal he signed. . . now he's trying to deny it."
Conservative finance critic Tim Hudak accused McGuinty of weak leadership.
"Dalton McGuinty's picking fights with the federal government and all the other provinces, and has isolated himself in the equalization discussions," said Hudak.
©The Canadian Press, 2006
http://start.shaw.ca/start/enCA/News/NationalNewsArticle.htm?&src=n051029A.xml
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TORONTO (CP) - Equalization is forcing federal taxpayers in Ontario to help finance lower taxes and higher health and education spending in other provinces, where they don't get to enjoy the benefits, Premier Dalton McGuinty charged Wednesday.
McGuinty was responding to a recent report prepared for the premiers that recommends increasing equalization payments received by Canada's so-called have-not provinces as a way of fixing the fiscal imbalance.
That, however, would only worsen the injustice as far as Ontario is concerned, he said.
"We are now subsidizing lower levels of taxation in some equalization-receiving provinces than we have here in the province of Ontario," McGuinty said before a cabinet meeting.
"If we in the so-called have province have the lowest levels of funding for our colleges and universities, the second-lowest levels of funding for our hospitals, we have the lowest overall per capita program spending, and we're being asked to send more money elsewhere, that strikes me as patently unfair."
Alberta and Ontario are the only two have provinces that do not receive equalization payments, which are part of a system designed to more evenly distribute Canada's wealth among all of its residents.
Ontario calculates that its transfers to have-not provinces would increase by 28 per cent under the plan recommended by the other premiers, climbing to $6.3 billion from $4.9 billion. McGuinty said he intends to fight the plan.
"I have yet to see any evidence that would indicate that it's time for us right now to enrich equalization," he said. "That might happen in the future."
McGuinty said the gap between Ontario and the have-not provinces appears to be narrowing, which should mean they need less money under equalization, not more.
"The have-nots are in fact becoming wealthier, which is a good thing for all Canadians," McGuinty said.
"There really shouldn't be a reason for us to now put more into equalization if the gap is closing. It would make an argument, I would think, for moving in the other direction."
Deficit-plagued Ontario wants the federal government, which has been posting annual surpluses in the billions of dollars, to provide more money to the provinces for health and social transfers instead of using the equalization plan to address the fiscal imbalance.
The province calculates that federal taxes paid by Ontario residents account for 43 per cent of Ottawa's equalization payments, even though the province has only 39 per cent of the country's population and receives only 32 per cent of federal program spending.
Senior Ontario government officials said the province would get an additional $1.1 billion a year if it received the same per capita funding for health and social spending as do other provinces.
McGuinty also complained about a 3.5 per cent annual increase in equalization payments, which he described two years ago as a "reasonable accommodation," but now says was imposed against his will by Prime Minister Paul Martin.
Ontario's opposition parties pounced on his apparent about-face on the equalization agreement reached two years ago.
"It's rather galling," said New Democrat critic Gilles Bisson. "There he was singing the praises of the deal he signed. . . now he's trying to deny it."
Conservative finance critic Tim Hudak accused McGuinty of weak leadership.
"Dalton McGuinty's picking fights with the federal government and all the other provinces, and has isolated himself in the equalization discussions," said Hudak.
©The Canadian Press, 2006
http://start.shaw.ca/start/enCA/News/NationalNewsArticle.htm?&src=n051029A.xml