Ontario shortchanged by equalization payment rules – by Martin Regg Cohn (Toronto Star – April 7, 2013)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Ontario is deeply in debt, but outdated equalization payment rules see the province sending big money to our fellow Canadians, Martin Regg Cohn writes.

Ontario is deeply in debt — roughly $265 billion — and has a massive annual deficit, now about $12 billion. It is slashing government services and freezing public-sector wages. Oh, and we are still giving away big money — $11 billion at last count — to our fellow Canadians.

That’s the tally released this month by the Mowat Centre, a local think tank bankrolled largely by the Ontario government to get the province’s message out — in hopes of keeping our cash from leaking out.

You can do the math: If we didn’t send so much money to other provinces, we wouldn’t be so deeply in debt. Meanwhile, other provinces are balancing their books on our backs, or use our funds to provide services at a higher level than we can afford to offer here — from low-fee child care to high-end health care.

It’s an argument made persuasively, and perennially, by the Mowat Centre (which, unsurprisingly, is headed by a former senior Ontario civil servant). Queen’s Park dreamed up the Mowat think tank in 2008, when it was at wit’s end about being outwitted by other provinces. But Ontario’s thoughtful research and remonstrations never get much traction — here at home or across the country.

If Ontarians don’t care about their own impoverishment, why should the rest of Canada care? Why are we so willing to continue shortchanging ourselves while enriching neighbouring provinces?

The architecture of fiscal federalism is too opaque and abstract for the average Ontarian to comprehend, or suddenly care about after decades of indifference. In other regions, clamouring for a fair share from Ottawa is a reflex.

Equalization is the Canadian way — the way we’ve always done things. The original idea was to level the fiscal playing field so that all provincial governments had enough cash to deliver the same core services to all Canadians.

But times change. Now, perversely, equalization equals inequity.

It is an economic anachronism. No longer is Ontario the sugar daddy of Confederation, nor are the regions our poor cousins. Newfoundland is oil rich, the prairies are resource resurgent, and Quebec is less grateful than ever about being bought off with billions of dollars.

For the rest of this column, click here: http://www.thestar.com/news/canada/2013/04/06/ontario_shortchanged_by_equalization_payment_rules_cohn.html


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