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Ontario calls for new approach to federal funding for provinces
Friday, October 21, 2005
HAMILTON, ON, Oct. 21 /CNW/ - Ontario Minister of Intergovernmental Affairs Dr. Marie Bountrogianni called today on the federal government to further narrow the $23 billion gap and said it was time for a new approach to the way Ottawa transfers funds to the provinces.
"Ontarians are proud Canadians who are committed to doing their part to make Canada strong and prosperous. But the $23 billion gap is compromising Ontario's ability to invest in the programs that make our province and our country strong," said Bountrogianni at an event hosted by the Hamilton Chamber of Commerce.
The $23 billion gap is the difference between what Ontarians give to the federal government in taxes and what they get back in federal programs and services. This fall, Minister Bountrogianni will meet business and community leaders across the province to discuss the gap and the problems it poses for Ontario.
"The gap is too big, and it's not fair," said Bountrogianni. "The gap should be narrowed to ensure Ontario can continue improving the things Ontarians need most - postsecondary education, training programs for our workforce and infrastructure investments to help our communities flourish."
Bountrogianni welcomed the Ontario Chamber of Commerce's recent report, Fairness in Confederation, which identified how an unfair allocation of federal funding is harming Ontario.
"The report shows that the fiscal arrangements between the federal government and the provinces need to be fixed," said Bountrogianni. "It's time for significant reform."
To learn more about the $23 billion gap visit www.strongontario.ca.
Disponible en français
www.mia.gov.on.ca
Backgrounder
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$23 BILLION GAP
The $23 billion gap is the estimated difference in the amount the federal government received from Ontarians in 2004-05 compared with the amount returned to them in programs and services. That gap has grown so much over the last 10 years - from $2 billion to $23 billion - that it now compromises our ability to invest in the things Ontarians need most, including postsecondary education, training programs for our workforce, language and settlement services for new immigrants, and infrastructure investments to help our communities flourish.
Ontario is trying to reduce the gap, not eliminate it. On February 21, 2005, all three parties of the Ontario Legislature unanimously voted in support of Premier McGuinty's efforts to narrow the $23 billion gap.
Ontarians support the principle of the federal Equalization program, whereby the federal government transfers resources so Equalization-receiving provinces can "provide reasonably comparable public services at reasonably comparable levels of taxation," as provided by the Constitution. However, Ontario believes that federal programs outside of the Equalization program should treat all Canadians fairly.
Part of the $23 billion gap is explained by the federal government's inequitable treatment of Ontarians in key programs such as:
Health and Social Transfers Ontario currently receives $608 per
person to support health care,
postsecondary education and other
social programs, versus $687 per person
in Equalization receiving provinces.
Infrastructure Ontario receives less than its equitable
share of federal infrastructure spending.
For example, the Canada Strategic
Infrastructure Fund (CSIF) spends $92 per
person in Ontario, compared with $146 per
person in the rest of Canada.
Employment Insurance In 2004, regular Employment Insurance (EI)
amounted to $5,030 per unemployed person
in Ontario, versus $8,340 per unemployed
person in the rest of Canada
May 7 Agreement
On May 7, 2005, Premier McGuinty negotiated a five-year agreement with the Prime Minister for $5.75 billion in new federal investment for Ontario's priority areas, including immigration, labour market training, postsecondary education, infrastructure, affordable housing and climate change.
Ontario believes this agreement is a step in the right direction, although much more needs to be done to ensure Ontario can continue investing in our people and driving Canada's economy.
Endorsements
Many respected economists, analysts, and stakeholders have supported Ontario's $23 billion campaign. Here is what some of them have said:
"The bottom line is that Ottawa runs a huge operating surplus in Ontario,
with today's gap, at $23 billion, ten times what it was a decade ago. Its
sheer magnitude weighs on an already burdened economy, taxing the Ontario
government's ability to invest in a strong, vibrant provincial (and hence
national) economy."
- Warren Lovely, Senior Economist from CIBC World Markets
"Ontario's communities are proud that Ontario helps less prosperous
regions of Canada, but we believe that Ontario must be treated fairly by
the federal government."
- Roger Anderson, President of Association of Municipalities of
Ontario
The existence of and need to address the gap has been confirmed by:
- All three parties in the Ontario Legislature
- Three separate reports by TD Bank, the Bank of Nova Scotia and CIBC
- Ontario Chamber of Commerce in their "Fairness in Confederation"
report
KPMG also assessed and verified Ontario's methodology and results in calculating the estimates for Ontario's fair share on selected federal program areas including Canada Health Transfer, Canada Social Transfer, infrastructure programs, immigration settlement funding and labour market training.
Further information:
Nicole Curling Richard Frank
Office of the Honourable Ministry of Intergovernmental Affairs
Dr. Marie Bountrogianni (416) 325-9079
(416) 212-7234
Disponible en francais
For further information: Nicole Curling, Office of the Honourable Dr. Marie Bountrogianni, (416) 212-7234; Jennifer Lang, Communications Branch, (416) 212-4965; Richard Frank, Ministry of Intergovernmental Affairs, (416) 325-9079
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