Flaherty missive misleading [equalization]

Posted on December 30, 2013 in Governance Policy Context

TheStar.com – Opinion/Readers’ Letters
Dec 30 2013.

Re: Transfers to Ontario at all-time high, Letter Dec. 26

The letter from Finance Minister Jim Flaherty is most misleading. He boasts about the increase in federal transfers to the provinces for health care since 2006 when the Conservative government came to power, but he fails to mention that this is simply the result of the funding formula agreed under the National Health Care Accord of 2004 agreed between the previous Liberal government and the provinces.

The accord agreement expires next year and the Harper government has shown no interest in extending it or even meeting with the provinces to discuss it. Their interest appears to be in cutbacks.

This sort of misleading letter is particularly disturbing when coming from a minister of a government that continues bit by bit to withdraw from any responsibilities at a federal level for the protection or maintenance of our public health care system.

Derek Chadwick, Toronto

< http://www.thestar.com/opinion/letters_to_the_editors/2013/12/30/flaherty_missive_misleading.html >


Re: Ontario gets the short end, Editorial Dec. 19

Ontario gets the short end, Editorial Dec. 19

Recent editorials in the Star on the subject of federal transfers to Ontario were unfortunately heavy on rhetoric and light on facts.

Federal transfers to Ontario for health care and social programs are at an all-time record high under the Harper government. What’s more, since coming to office in 2006, federal transfers to Ontario for health care alone have increased by almost 60 per cent from under the previous federal Liberal government (transfers for social programs have increased by more than 50 per cent).

These facts were conspicuously absent from recent commentary and from recent musings by the Wynne government. Rather, they all decided to instead focus on the decline in the province’s equalization entitlement.

To be clear: equalization is a program for provinces whose economies are performing below  average. Since 2009, Ontario — as determined by a standard, legislated formula  — has qualified for equalization.

Additionally, under this formula, as a province’s economy improves, the amount of equalization it is entitled to logically declines. This is what happened in Ontario for 2014-15. Indeed, economic indicators in the province (notably the province’s share of the corporate tax base) have improved relative to the other equalization-receiving provinces. This is exactly how the program is supposed to work and Ontario receiving less equalization is a positive signal for the gradual recovery of the Ontario economy.

During the worst of the recent global recession a special, temporary provision helped protect provinces from any decline in total transfers (equalization, along with social and health transfers). This program was always known to be temporary and was tied to the recession. As 2014-15 is the first year in which data from the recent recession is no longer reflected in the calculation of major transfer amounts, the program naturally ended.

The Harper government has clearly stepped up to the plate to dramatically increase transfers for Ontario. Instead of focusing on increasing equalization payments for the province, our government wants to work with the Wynne government to strengthen the Ontario economy and ensure the province does not need equalization.

Jim Flaherty, Minister of Finance, Ottawa

< http://www.thestar.com/opinion/letters_to_the_editors/2013/12/26/transfers_to_ontario_at_alltime_high.html >

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