[ryan29]

EQUALIZATION

Ontario at risk of mild recession, TD report says
KAREN HOWLETT

March 21, 2008

TORONTO -- Ontario's weakening economic fortunes are leading to new calls to reform federal transfer programs used to divvy up riches among the provinces.

Canada's most populous province will rank at the bottom of the heap this year, with its economy growing just 0.5 per cent, says Toronto-Dominion Bank in a particularly gloomy report that for the first time raises the spectre of Ontario slipping into a mild recession.

Central Canada's anemic growth comes as some western provinces are faring much better. The growing regional divide has economists questioning the wisdom of transfer programs that require Ontario to contribute a disproportionate share of its wealth to prop up other provinces.

"We cannot continue to fund other parts of Canada to a level beyond the quality of services we have in Ontario," Len Crispino, president of the Ontario Chamber of Commerce, said yesterday in an interview. "We need to rebalance this imbalance."


The TD report says the "lethal combination" of a high Canadian dollar and weak demand in the United States for goods manufactured in Ontario is hurting the province's ability to raise revenue. Ontario at one time enjoyed one of the highest standards of living in Canada. But that is no longer the case. Just four years ago, the average income of each Ontarian was $400 above the national average. By last year, income had fallen to just $84 above the national average and it threatens to keep falling.

Dale Orr of Global Insight Inc. was among the first economists to say Ontario is in jeopardy of becoming a "have-not" province in Confederation, which would make it eligible to receive payments under the national equalization program for the first time.

Those provinces whose fiscal capacity falls below the national average over a three-year period receive equalization. Those above the average do not. The topic became political this week when federal Finance Minister Jim Flaherty weighed in, saying that Ontario is on track to become a have-not province within two to three years.

Progressive Conservative MPP Tim Hudak echoed that opinion yesterday.

"Please tell me that the lasting legacy of the Dalton McGuinty government is not going to be taking Ontario to 'have-not' status," he said during Question Period in the legislature.

"I see my honourable friend's lips moving, but I hear the federal Minister of Finance's voice," Mr. McGuinty quipped.

The Premier said the Tories are wrong to suggest Ontario will become a have-not province. But he reiterated that Ontario picks up more than its fair share of the tab for helping other provinces. Each taxpayer in the province will send $2,040 more to Ottawa this year than he or she will receive back, Mr. McGuinty said in Question Period. "What we don't have is fairness from the federal government," he said.

TD Bank chief economist Don Drummond said it is highly unlikely the Harper government will push for further changes to federal transfer programs, given its bitter feud with Mr. McGuinty over the economy. Last year, the federal government adopted a new formula to calculate equalization based on the revenue-generating capacity of 10 provinces, rather than the previous five-province standard.

"They seem to be bent on making Ontario's situation worse at the moment," Mr. Drummond said.

Sharing the wealth

The national equalization program is designed to give money to Canada's poorer provinces so they can provide social services comparable to the richer ones. This year, the federal government will distribute $13-billion in equalization payments to every province except Ontario, Alberta and British Columbia.

Equalization, one of several programs Ottawa uses to distribute funding to the provinces, was introduced in 1951. The government adopted a new formula last year to calculate equalization based on the revenue-generating capacity of 10 provinces, rather than the previous five-province standard.

Equalization payments will climb to $13.6-billion in fiscal 2009, from $13-billion in this fiscal year, a 50-per-cent increase over the past five years. Ontario residents fund 40 per cent of the program through their income-tax payments to Ottawa.

- Karen Howlett

http://www.theglobeandmail.com//servlet ... /National/

[ryan29]

so it looks like dalton mcguinty and his liberals are leading the province to economic disaster.

is it time to declare mcguinty as bob rae 2 ? .

say this sequel to the ndp's disaterous years is sure going to be wonderful, i can't wait until we become a have not province and turn into welfare bums .

[sandorski]

ryan29 ryan29:

so it looks like dalton mcguinty and his liberals are leading the province to economic disaster.

is it time to declare mcguinty as bob rae 2 ? .

say this sequel to the ndp's disaterous years is sure going to be wonderful, i can't wait until we become a have not province and turn into welfare bums .

You can't blame Ontario's current situation on poor Leadership. These are factors way out of that Provincial Governments control. The best they can do is to weather the storm.

[ryan29]

sandorski sandorski:

ryan29 ryan29:

so it looks like dalton mcguinty and his liberals are leading the province to economic disaster.

is it time to declare mcguinty as bob rae 2 ? .

say this sequel to the ndp's disaterous years is sure going to be wonderful, i can't wait until we become a have not province and turn into welfare bums .

You can't blame Ontario's current situation on poor Leadership. These are factors way out of that Provincial Governments control. The best they can do is to weather the storm.

i can't balme it on poor leadership ? why not , mcguinty has had almost 5 years to run this province yet each year it gets worse and the economy gets worse . he is doing a horrible job as premier , the media here is just too liberal for anyone to realise.

he is allowing the province to slip to the brink of going into have not status . that shows how disaserous it will become.

he is a sequel to the bob rae years except this time with popular media support for his agenda .

[sandorski]

ryan29 ryan29:

sandorski sandorski:

ryan29 ryan29:

so it looks like dalton mcguinty and his liberals are leading the province to economic disaster.

is it time to declare mcguinty as bob rae 2 ? .

say this sequel to the ndp's disaterous years is sure going to be wonderful, i can't wait until we become a have not province and turn into welfare bums .

You can't blame Ontario's current situation on poor Leadership. These are factors way out of that Provincial Governments control. The best they can do is to weather the storm.

i can't balme it on poor leadership ? why not , mcguinty has had almost 5years to run this province yet each year it gets worse and the economy gets worse . he is doing a horrible job as premier , the media here is just too liberal for anyone to realise.

he is allowing the province to slip to the brink of going into have not status . that shows how disaserous it will become.

he is a sequel to the bob rae years except this time with popular media support for his agenda .

it has nothing to do with him. Take off your Partisan blinders and see what's going on.

[kenmore]

well if Harper and flawherty are kept in power b] the liberals Ontario will be in trouble... they both have a hard on for Ontario

[mtbr]

If the lieberals get in lol lol the whole country is screwed because they have a hard-on for the west which is driving the Canadian economy

[ryan29]

sandorski sandorski:

ryan29 ryan29:

sandorski sandorski:

ryan29 ryan29:

so it looks like dalton mcguinty and his liberals are leading the province to economic disaster.

is it time to declare mcguinty as bob rae 2 ? .

say this sequel to the ndp's disaterous years is sure going to be wonderful, i can't wait until we become a have not province and turn into welfare bums .

You can't blame Ontario's current situation on poor Leadership. These are factors way out of that Provincial Governments control. The best they can do is to weather the storm.

i can't balme it on poor leadership ? why not , mcguinty has had almost 5 years to run this province yet each year it gets worse and the economy gets worse . he is doing a horrible job as premier , the media here is just too liberal for anyone to realise.

he is allowing the province to slip to the brink of going into have not status . that shows how disaserous it will become.

he is a sequel to the bob rae years except this time with popular media support for his agenda .

it has nothing to do with him. Take off your Partisan blinders and see what's going on.

it has nothing to do with him ? no that is not true he is the premier and has to except a certain amount of responsibilty for what takes place here. he cannot blame everyone else for these problems . and the province was fine before he and his gang of fools took over.

[sandorski]

ryan29 ryan29:

sandorski sandorski:

ryan29 ryan29:

sandorski sandorski:

ryan29 ryan29:

so it looks like dalton mcguinty and his liberals are leading the province to economic disaster.

is it time to declare mcguinty as bob rae 2 ? .

say this sequel to the ndp's disaterous years is sure going to be wonderful, i can't wait until we become a have not province and turn into welfare bums .

You can't blame Ontario's current situation on poor Leadership. These are factors way out of that Provincial Governments control. The best they can do is to weather the storm.

i can't balme it on poor leadership ? why not , mcguinty has had almost 5 years to run this province yet each year it gets worse and the economy gets worse . he is doing a horrible job as premier , the media here is just too liberal for anyone to realise.

he is allowing the province to slip to the brink of going into have not status . that shows how disaserous it will become.

he is a sequel to the bob rae years except this time with popular media support for his agenda .

it has nothing to do with him. Take off your Partisan blinders and see what's going on.

it has nothing to do with him ? no that is not true he is the premier and has to except a certain amount of responsibilty for what takes place here. he cannot blame everyone else for these problems . and the province was fine before he and his gang of fools took over.

High $, US Recession, both beyond his control. I also recall an inherited Deficit from Harris, although in Harris's defence he in turn had inherited a Deficit too.

[dino_bobba_renno]

I don't think it would be fair to point the finger at any one given individual and lay blame. There have been a lot of factors that have contributed to this problem that are outside of Mcguinty's control. The US economy is one of the bigger ones.

However Mcguinty can be criticized for the fact that he hasn't reacted well to these outside forces. He seems to be staying the course with the plans he had when he first entered into government with which is hardly realistic considering the changes that have taken place since then.

The people of Ontario themselves don't seem to keen on making the required changes either. Mcguinty is still taking criticism for the fact he didn't eliminate the health tax which he promised to do when he entered office. While it was an unpopular move it was necessary at the time and still is today to keep it in place.

Mcguinty seems bitterly opposed to cutting corporate taxes and serves but the reality is that to maintain these at their current levels may spell economic trouble for not just Ontario but all of Canada.

As for the Fed's, they should working with Mcguinty not openly scorning him.

[stokes]

The three western most provinces are booming and we have an almost critical manpower shortage in skilled trades and we need good people who can fill these vacancies. I think all levels of government should enourage relocation to areas where there are well-paying jobs instead of having those who have been laid off sucking from the public tit for months complaining the Gov't isnt doing enough for them!!

If I was stuck in Ontario and couldnt find work I would leave go west and quit whining.

Besides with a larger population we could get the political power to match our economic power and everyone would be happier!

[ryan29]

stokes stokes:

The three western most provinces are booming and we have an almost critical manpower shortage in skilled trades and we need good people who can fill these vacancies. I think all levels of government should enourage relocation to areas where there are well-paying jobs instead of having those who have been laid off sucking from the public tit for months complaining the Gov't isnt doing enough for them!!

If I was stuck in Ontario and couldnt find work I would leave go west and quit whining.

Besides with a larger population we could get the political power to match our economic power and everyone would be happier!

yes those are some good points , there is definity alot of laid off people in some of these towns in this province who would be better off if they just moved some where else. only thing is somecases is they really can't just up and leave as they have homes ( which they would have to sell for much less than what a home in say calgary would cost ) , children who go to school here and other commitments .

[dino_bobba_renno]

I read an article the other day about how Windsor's mayor wants to have a shuttle going back and forth to Alberta to help employ workers who have been layed off there reciently. Not a bad idea.

[web]http://cnews.canoe.ca/CNEWS/Canada/2008/03/18/5042781-cp.html[/web]

[stokes]

Ryan

I understand about commitments, we all have them and I also understand about how things are not equal in this country but for me personally I would rather go somewhere to find a well paying job than stay and be on welfare/EI. I would do it for the betterment of the family not to make them suffer.

As Dinno says what is to stop someone from flying back and forth. most of the big jobs see a lot of workers living in Camps where yo cant bring your family anyway so why not at least take a chance...that is all I am saying...Take a Chance and try something Different..who knows you may like it!

[sandorski]

dino_bobba_renno dino_bobba_renno:

I don't think it would be fair to point the finger at any one given individual and lay blame. There have been a lot of factors that have contributed to this problem that are outside of Mcguinty's control. The US economy is one of the bigger ones.

However Mcguinty can be criticized for the fact that he hasn't reacted well to these outside forces. He seems to be staying the course with the plans he had when he first entered into government with which is hardly realistic considering the changes that have taken place since then.

The people of Ontario themselves don't seem to keen on making the required changes either. Mcguinty is still taking criticism for the fact he didn't eliminate the health tax which he promised to do when he entered office. While it was an unpopular move it was necessary at the time and still is today to keep it in place.

Mcguinty seems bitterly opposed to cutting corporate taxes and serves but the reality is that to maintain these at their current levels may spell economic trouble for not just Ontario but all of Canada.

As for the Fed's, they should working with Mcguinty not openly scorning him.

Seems like a fair criticism.