Some provincial finance ministers meeting with their federal counterpart in southern Ontario say they sense Stephen Harper's government is veering away from its pledge to share Canada's wealth more fairly.
Federal Finance Minister Jim Flaherty says his provincial counterparts can raise taxes if they're short on funds. (Adrian Wyld/Canadian Press) "We wanted to know how much money they were prepared to commit to the equalization or fiscal imbalance agreements, and essentially we've come away no better informed," Saskatchewan's finance minister, Andrew Thompson, said after the talks this week in Niagara-on-the-Lake.
During the campaign before the January parliamentary election, the Conservatives won rave reviews by promising to fix the so-called fiscal imbalance, the disparity between what Ottawa collects in taxes and what it returns in equalization payments to the provinces so they can provide similar levels of services, no matter how much money they have in their coffers.
But Thompson said that, at the latest meetings, he sensed a "weakening resolve" on the part of Harper's government to strike a deal giving the provincial governments more money from the country's healthy surplus.
Provinces could raise taxes, Flaherty suggests
Federal Finance Minister Jim Flaherty seemed to underline that analysis by saying that eight out of 10 provincial governments are now running balanced budgets.
If they think they need more money, Flaherty added, they can raise provincial tax rates.
"It's not the responsibility of the federal government to tax Canadians in order to fund provincial programs that provinces choose to conduct," he told reporters on Tuesday afternoon.
"That's their jurisdiction."
Provincial governments are unlikely to embrace the idea of raising their own taxes because that could create a backlash among voters.
Currently only Ontario, Alberta and Saskatchewan do not receive equalization payments. The premiers all agree that Ottawa collects too much money from taxes and that the provinces don't get enough back to pay for programs.
Suggestion irks Quebec
Quebec Premier Jean Charest was not at the meeting but said he was underwhelmed by Flaherty's suggestion.
'When Mr. Harper said, "I'm going to fix the fiscal imbalance,' he never said, 'I'm going to fix it by asking the provinces to increase taxes."'
-Quebec Premier Jean Charest"When Mr. Harper said, 'I'm going to fix the fiscal imbalance,' he never said, 'I'm going to fix it by asking the provinces to increase taxes,'" Charest said.
"And when he said, 'I'm going to reduce the GST,' he never said, 'I want the provincial governments to come in and take up the extra percent[age point].'"
Ontario's burden 'too severe,' Sorbara says
With all federal-provincial transfers up for discussion, Ontario Finance Minister Greg Sorbara restated his province's unwillingness to pay more than it already does to help have-not provinces.
"I think the fact that eight out of 10 provinces are in a surplus situation points to the fact that the burden that Ontario carries in financing public programs around the country is just too severe," he said.
Despite statements like this, Flaherty characterized this week's talks as "amiable."
Negotiations are expected to go on in private in the months ahead.
http://www.cbc.ca/story/canada/national/2006/06/28/finance-ministers-meet.html
Federal Finance Minister Jim Flaherty says his provincial counterparts can raise taxes if they're short on funds. (Adrian Wyld/Canadian Press) "We wanted to know how much money they were prepared to commit to the equalization or fiscal imbalance agreements, and essentially we've come away no better informed," Saskatchewan's finance minister, Andrew Thompson, said after the talks this week in Niagara-on-the-Lake.
During the campaign before the January parliamentary election, the Conservatives won rave reviews by promising to fix the so-called fiscal imbalance, the disparity between what Ottawa collects in taxes and what it returns in equalization payments to the provinces so they can provide similar levels of services, no matter how much money they have in their coffers.
But Thompson said that, at the latest meetings, he sensed a "weakening resolve" on the part of Harper's government to strike a deal giving the provincial governments more money from the country's healthy surplus.
Provinces could raise taxes, Flaherty suggests
Federal Finance Minister Jim Flaherty seemed to underline that analysis by saying that eight out of 10 provincial governments are now running balanced budgets.
If they think they need more money, Flaherty added, they can raise provincial tax rates.
"It's not the responsibility of the federal government to tax Canadians in order to fund provincial programs that provinces choose to conduct," he told reporters on Tuesday afternoon.
"That's their jurisdiction."
Provincial governments are unlikely to embrace the idea of raising their own taxes because that could create a backlash among voters.
Currently only Ontario, Alberta and Saskatchewan do not receive equalization payments. The premiers all agree that Ottawa collects too much money from taxes and that the provinces don't get enough back to pay for programs.
Suggestion irks Quebec
Quebec Premier Jean Charest was not at the meeting but said he was underwhelmed by Flaherty's suggestion.
'When Mr. Harper said, "I'm going to fix the fiscal imbalance,' he never said, 'I'm going to fix it by asking the provinces to increase taxes."'
-Quebec Premier Jean Charest"When Mr. Harper said, 'I'm going to fix the fiscal imbalance,' he never said, 'I'm going to fix it by asking the provinces to increase taxes,'" Charest said.
"And when he said, 'I'm going to reduce the GST,' he never said, 'I want the provincial governments to come in and take up the extra percent[age point].'"
Ontario's burden 'too severe,' Sorbara says
With all federal-provincial transfers up for discussion, Ontario Finance Minister Greg Sorbara restated his province's unwillingness to pay more than it already does to help have-not provinces.
"I think the fact that eight out of 10 provinces are in a surplus situation points to the fact that the burden that Ontario carries in financing public programs around the country is just too severe," he said.
Despite statements like this, Flaherty characterized this week's talks as "amiable."
Negotiations are expected to go on in private in the months ahead.
http://www.cbc.ca/story/canada/national/2006/06/28/finance-ministers-meet.html