Flaherty fires back at Ontario Liberals' criticism over fed aid
Federal Finance Minister James Flaherty speaks to the media in Edmonton Nov. 12, 2013. (Perry Mah/Edmonton Sun)
Federal Finance Minister Jim Flaherty has shot back at criticism from the Kathleen Wynne government that Ottawa’s financial transfers to Ontario are dropping.
The only federal support that has decreased this year for Ontario is equalization payments, a reflection that its fiscal position has improved against that of other provinces, he said.
Equalization is a national program where taxes are redistributed from wealthier provinces, such as Alberta, to ensure Canadians get comparable public services no matter where they live in the country.
“Unlike the Wynne government, whose only solution is to complain, the Harper government has stepped up and supported Ontario,” Flaherty said in a statement. “Instead of focusing on increasing equalization payments for the province, our government wants to work with the Wynne government to strengthen Ontario’s economy so that it doesn’t have to rely on being an equalization-receiving province in the first place.”
Ontario Finance Minister Charles Sousa, who will be in Ottawa Monday for the start of consultations for his spring budget, accused the Harper government of balancing its books on the backs of Ontarians.
The federal government provides the province funding in the form of equalization payments and other financial transfers for things like health care.
The province argues when all payments are added together, it will come up $640-million short in 2014-15, compared to the current fiscal year, meaning there will be less cash for badly needed public services.
Sousa called it a “fiscal bombshell.”
Flaherty said it was “absurd” for the Wynne government to suggest the federal government was cutting federal transfers.
“In an attempt to blame the federal government for their own fiscal troubles, the Wynne government is trying to argue that an $8.3-billion increase in federal transfers is somehow a decrease. It is not,” Flaherty said. “The only thing that has changed for Ontario recently is the equalization entitlement. To claim this is politically motivated shows their lack of understanding of how equalization works.”
Ontario is expected to be the only province in Canada to receive less this year in overall federal transfers, including equalization, and also has the largest deficit of any single province in the country.
Sousa has already hinted that his government will not cut what it sees as critical public spending — even if that means Ontario struggles to meet deficit-reduction targets.